DOMA HOLDINGS, INC. – 10-Q – Management's Discussion and Analysis of Financial Condition and Results of Operations

The following discussion and analysis of the financial condition and results of
operations of Doma should be read together with the unaudited condensed
consolidated financial statements as of June 30, 2022 and 2021 and for the three
and six months ended June 30, 2022 and 2021, together with the related notes
thereto, contained in this Quarterly Report on Form 10-Q ("Quarterly Report"),
as well as the audited consolidated financial statements as of December 31, 2021
and 2020 and for the years ended December 31, 2021, 2020 and 2019, together with
related notes thereto, contained in our annual report on Form 10-K for the year
ended December 31, 2021 (the "Annual Report"). This discussion may contain
forward-looking statements based upon current expectations that involve risks
and uncertainties and should be read in conjunction with the disclosures and
information contained in "Cautionary Note Regarding Forward-Looking Statements"
in the Annual Report. Our actual results may differ materially from those
projected in these forward-looking statements as a result of various factors,
including those set forth under Part I, Item 1A "Risk Factors" or in other parts
of the Annual Report. Certain amounts may not foot due to rounding. All
forward-looking statements in this Quarterly Report are based on information
available to us as of the date hereof, and we assume no obligation to update any
such forward-looking statements to reflect future events or circumstances,
except as required by law.

Unless the context otherwise requires, references to "company," "Company,"
"Doma," "we," "us," "our" and similar terms refer to Doma Holdings, Inc. (f/k/a
Capitol Investment Corp. V) and its consolidated subsidiaries. References to
"Capitol" refer to our predecessor company prior to the consummation of the
Business Combination. References to "Old Doma" refer to Old Doma prior to the
Business Combination and to States Title Holding, Inc. ("States Title"), the
wholly owned subsidiary of Doma, upon the consummation of the Business
Combination.

Overview

Doma was founded in 2016 to focus top-tier data scientists, product managers,
and engineers on building game-changing technology to completely reimagine the
residential real estate closing process. We founded Doma to create a home
ownership process for today's consumers who expect instant, digital experiences.
Our approach to the title and escrow process is driven by our innovative full
stack platform, Doma Intelligence. The Doma Intelligence platform is the result
of significant investment in research and development over more than five years
across a team of more than 100 data scientists and engineers. It creates a
revolutionary new end-to-end real estate closing platform that seeks to
eliminate all of the latent, manual tasks involved in underwriting title
insurance, performing core escrow functions, generating closing documentation
and getting documents signed and recorded. The platform harnesses the power of
data analytics, machine learning and natural language processing, which will
enable us to deliver a more affordable and faster closing transaction with a
seamless customer experience at every point in the process. Doma's machine
intelligence algorithms are being trained and optimized on 30 years of
historical anonymized closing transaction data allowing us to make underwriting
decisions in less than a minute and significantly reduce the time, effort and
cost of facilitating the entire closing process.

Our Business Model

Today, we primarily originate, underwrite, and provide title, escrow and
settlement services for the two most prevalent transaction types in the
residential real estate market: purchase and refinance transactions. We operate
and report our business through two complementary reporting segments,
Distribution and Underwriting. See "-Basis of Presentation" below.

Our Distribution segment reflects the sale of our products and services, other
than underwriting and insurance services reflected in our Underwriting segment,
that we provide through our captive title agents and agencies ("Direct Agents").
We market our products and services through two channels to appeal to our
referral partners and ultimately reach our customers, the individuals purchasing
a new home or refinancing their existing mortgage:

•Doma Enterprise - we target partnerships with national lenders and mortgage
originators that maintain centralized lending operations. Once a partnership has
been established, we integrate our Doma Intelligence platform with the partner's
loan production systems, to enable frictionless order origination and
fulfillment. Substantially all Doma Enterprise orders are underwritten by Doma.

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•Local Markets ("Local") - we target partnerships with realtors, attorneys and
non-centralized loan originators via a 111-branch footprint across ten states as
of June 30, 2022. For the quarter ended June 30, 2022, approximately 90% of our
lender and owner policies from our Local channel were underwritten by Doma,
while the remaining share was underwritten by third-party underwriters.

Our Underwriting segment reflects the sale of our underwriting and insurance
services. These services are integrated with our Direct Agents channel and other
non-captive title and escrow agents in the market ("Third-Party Agents") through
our captive title insurance carrier. For customers sourced through the
Third-Party Agents channel, we retain a portion of the title premium
(approximately 16% - 18%) in exchange for underwriting risk to our balance
sheet. The Third-Party Agents channel includes the title underwriting and
insurance services we provide to Lennar, a related party, for its home builder
transactions.

The financial results of our Direct Agents channel impact both our Distribution
and Underwriting reporting segments, whereas the results from the Third-Party
Agents channel impact only the Underwriting reporting segment.

Our expenses generally consist of direct fulfillment expenses related to closing
a transaction and insuring the risk, customer acquisition costs related to
acquiring new business, and other operating expenses as described below:

•Direct fulfillment expenses - comprised of direct labor and direct non-labor
expenses. Direct labor expenses refer to payroll costs associated with employees
who directly contribute to the opening and closing of an order. Some examples of
direct labor expenses include title and escrow services, closing services, and
customer service. Direct non-labor expenses refer to non-payroll expenses that
are closely linked with order volume, such as provision for claims, title
examination expense, office supplies, and premium and other related taxes.

•Customer acquisition costs - this category is comprised of sales payroll, sales
commissions, customer success payroll, sales-related travel and entertainment,
and an allocated portion of corporate marketing

•Other operating expenses - all other expenses that do not directly contribute
to the fulfillment or acquisition of an order or policy are considered other
operating expenses. This category is predominately comprised of research and
development costs, corporate support expenses, occupancy, and other general and
administrative expenses

We expect to continue to invest in our Doma Intelligence platform as well as
organic and inorganic growth opportunities in order to remain competitive with
existing large-scale industry incumbents who are well financed and have
significant resources to defend their existing market positions. Over time, we
plan to use our cash flows to invest in customer acquisition, research and
development, and new product offerings, to further improve revenue growth and
accelerate the elimination of the friction and expense of closing a residential
real estate transaction.

Basis of Presentation

We report results for our two operating segments:

•Distribution - our Distribution segment reflects our Direct Agents operations
of acquiring customer orders and providing title and escrow services for real
estate closing transactions. We acquire customers through our Local and Doma
Enterprise customer referral channels.

•Underwriting - our Underwriting segment reflects the results of our title
insurance underwriting business, including policies referred through our Direct
Agents and Third-Party Agents channels. The referring agents retain
approximately 82% - 84% of the policy premiums in exchange for their services.
The retention rate varies by state and agent.

Costs are allocated to the segments to arrive at adjusted gross profit, our
segment measure of profit and loss. Our accounting policies for segments are the
same as those applied to our consolidated financial statements, as described
below under "-Key Components of Revenues and Expenses." Inter-segment revenues
and expenses are eliminated in consolidation. See Note 7 in our condensed
consolidated financial statements for a summary of our

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segment results and a reconciliation between segment adjusted gross profit and
our consolidated loss before income taxes.

Significant Events and Transactions

The Business Combination

On the Closing Date, Capitol consummated the Business Combination with Old Doma,
pursuant to the Agreement. In connection with the closing of the Business
Combination, Old Doma changed its name to States Title Holding, Inc., Capitol
changed its name to Doma Holdings, Inc. ("Doma") and Old Doma became a wholly
owned subsidiary of Doma. Doma continues the existing business operations of Old
Doma as a publicly traded company. Refer to Note 3 to the condensed consolidated
financial statements for additional details on the Business Combination.

As a result of the Business Combination, we became the operating successor to an
SEC-registered and New York Stock Exchange-listed shell company. Becoming a
public company has required us to hire additional personnel and implement
procedures and processes to address public company regulatory requirements and
practices. Also, we have incurred additional annual expenses as a public company
for, among other things, directors' and officers' liability insurance, director
fees, and additional internal and external accounting, legal, and administrative
resources.

Impact of COVID-19 and Related Macroeconomic Trends

COVID-19 has resulted in significant macroeconomic impacts, market disruptions,
and volatility in the real estate market. The on-going macroeconomic trends
impacting the residential real estate market include a shortage in the supply of
homes for sale, increasing home prices, rising mortgage interest rates,
inflation, disrupted labor markets and geopolitical uncertainties associated
with the war in Ukraine.

We operate in the real estate industry and our business volumes are directly
impacted by market trends for mortgage refinancing transactions, existing real
estate purchase transactions, and new real estate purchase transactions,
particularly in the residential segment of the market. Our success depends on a
high volume of residential and, to a lesser extent, commercial real estate
transactions, throughout the markets in which we operate. Responses to the
COVID-19 pandemic initially led to a material decline in purchase transactions.
Subsequent U.S. federal stimulus measures in 2021, including interest rate
reductions by the Federal Reserve, and local regulatory initiatives, such as
permitting remote notarization, led to a quick recovery for the real estate
industry and resulted in an increase in mortgage refinancing and purchase
volumes, which we believe benefited our business model.

Through the first half of 2022, to combat inflation, the Federal Reserve has
raised the benchmark interest rate by a total of 150 basis points, including a
75 basis point raise in June of 2022 which was the largest single increase since
1994. The Federal Reserve again raised the benchmark interest rate in July of
2022 by an additional 75 basis points. Average interest rates for a 30-year
fixed rate mortgage rose to 5.5% as of June 2022 as compared to 3.0% for the
corresponding period of 2021. As interest rates rise, the outlook on refinance
transactions continues to decline.

Demand for mortgages tends to correlate closely with changes in interest rates,
meaning that our order trends are likely to be impacted by future changes in
interest rates. However, we believe that our current, low market share and
disruptive approach to title insurance, escrow, and closing services will enable
us to gain market share, which in turn should mitigate the risk to our revenue
growth trends relative to industry incumbents.

We continue to monitor economic and regulatory developments closely as we
navigate the volatility and uncertainty created by the pandemic and the
subsequent macroeconomic activity.

Workforce Reduction

In the second quarter of 2022, the Company executed a workforce reduction (the
"Reduction") to improve cost efficiency and align with strategic investments in
the Doma Intelligence platform. The Reduction included the elimination of
approximately 15% of the Company's then current workforce. The Company has
incurred $3.8 million in charges in connection with the Reduction, including
cash expenditures for employee benefits, severance

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payments, payroll taxes and related facilitation costs offset by forfeitures of
bonus. In addition, the Company received a benefit from forfeitures of
stock-based compensation of $0.5 million. The Company is substantially complete
with this reduction as of June 30, 2022.

New York Stock Exchange Notice on Continued Listing Standards

On August 1, 2022, we received notice from the New York Stock Exchange (the
"NYSE") that we were no longer in compliance with the NYSE continued listing
standards, set forth in Section 802.01C of the NYSE's Listed Company Manual
("Section 802.01C") because the average closing price of the Company's common
stock was less than $1.00 per share over a consecutive 30 trading-day period.
Pursuant to Section 802.01C, the Company has a period of six months following
the receipt of the notice to regain compliance with the minimum share price
requirement. The Company may regain compliance at any time during the six-month
cure period if on the last trading day of any calendar month during the cure
period the common stock has a closing share price of at least $1.00 and an
average closing share price of at least $1.00 over the 30 trading-day period
ending on the last trading day of that month. If the Company is unable to regain
compliance with the $1.00 share price rule within this period, the NYSE will
initiate procedures to suspend and delist the common stock. Section 802.01C also
provides for an exception to the six-month cure period if the action required to
cure the price condition requires stockholder approval, as would be the case to
effectuate a reverse stock split, in which case the action needs to be approved
by no later than the Company's next annual stockholder's meeting, and the price
condition will be deemed cured if the price of the common stock promptly exceeds
$1.00 per share and the price remains above that level for at least the
following 30 trading days.

The Company intends to cure the deficiency within a period permissible under
Section 802.01C. However, there can be no assurances that the Company will meet
continued listing standards within the specified cure period. We are diligently
working to evidence compliance with the minimum price requirement for continued
listing on the NYSE. The notification has no immediate effect on the listing of
our common stock on the NYSE. We intend to monitor the closing price of our
common stock and consider our available options in the event the closing price
of our common stock remains below $1.00 per share.

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Key Operating and Financial Indicators

We regularly review several key operating and financial indicators to evaluate
our performance and trends and inform management's budgets, financial
projections and strategic decisions.

The following table presents our key operating and financial indicators, as well
as the relevant generally accepted accounting principles ("GAAP") measures, for
the periods indicated:
                                          Three Months Ended June 30,                  Six Months Ended June 30,
                                           2022                  2021                  2022                  2021
                                                 (in thousands, except for open and closed order numbers)
Key operating data:
Opened orders                               25,231               41,491                 60,423               82,575
Closed orders                               18,799               31,436                 46,146               64,086
GAAP financial data:
Revenue (1)                          $     123,744           $  129,986          $     235,951           $  257,782
Gross profit (2)                     $       7,143           $   26,514          $      14,277           $   52,930
Net loss                             $     (58,652)          $  (23,299)         $    (108,678)          $  (35,057)
Non-GAAP financial data (3):
Retained premiums and fees           $      49,106           $   64,805          $     100,711           $  122,263
Adjusted gross profit                $      10,890           $   29,535          $      21,260           $   58,657
Ratio of adjusted gross profit to
retained premiums and fees                      22   %               46  %                  21   %               48  %
Adjusted EBITDA                      $     (43,390)          $  (11,903)         $     (88,295)          $  (15,182)


_________________
(1)Revenue is comprised of (i) net premiums written, (ii) escrow, other
title-related fees and other, and (iii) investment, dividend and other income.
Net loss is made up of the components of revenue and expenses. For more
information about measures appearing in our consolidated income statements,
refer to "-Key Components of Revenue and Expenses-Revenue" below.
(2)Gross profit, calculated in accordance with GAAP, is calculated as total
revenue, minus premiums retained by Third-Party Agents, direct labor expense
(including mainly personnel expense for certain employees involved in the direct
fulfillment of policies) and direct non-labor expense (including mainly title
examination expense, provision for claims, and depreciation and amortization).
In our consolidated income statements, depreciation and amortization is recorded
under the "other operating expenses" caption.
(3)Retained premiums and fees, adjusted gross profit and adjusted EBITDA are
non-GAAP financial measures. Refer to "-Non-GAAP Financial Measures" below for
additional information and reconciliations of these measures to the most closely
comparable GAAP financial measures.

Opened and closed orders

Opened orders represent the number of orders placed for title insurance and/or
escrow services (which includes the disbursement of funds, signing of documents
and recording of the transaction with the county office) through our Direct
Agents, typically in connection with a home purchase or mortgage refinancing
transaction. An order may be opened upon an indication of interest in a specific
property from a customer and may be cancelled by the customer before or after
the signing of a purchase or loan agreement. Closed orders represent the number
of opened orders for title insurance and/or escrow services that were
successfully fulfilled in each period with the issuance of a title insurance
policy and/or provision of escrow services. Opened and closed orders do not
include orders or referrals for title insurance from our Third-Party Agents. A
closed order for a home purchase transaction typically results in the issuance
of two title insurance policies, whereas a refinance transaction typically
results in the issuance of one title insurance policy.

We review opened orders as a leading indicator of our Direct Agents revenue
pipeline and closed orders as a direct indicator of Direct Agents revenue for
the concurrent period, and believe these measures are useful to investors for
the same reasons. We believe that the relationship between opened and closed
orders will remain relatively consistent over time, and that opened order growth
is generally a reliable indicator of future financial performance. However,
degradation in the ratio of opened orders to closed orders may be a leading
indicator of adverse macroeconomic or real estate market trends.

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Retained premiums and fees

Retained premiums and fees, a non-GAAP financial measure, is defined as total
revenue under GAAP minus premiums retained by Third-Party Agents. See "-Non-GAAP
Financial Measures" below for a reconciliation of our retained premiums and fees
to gross profit, the most closely comparable GAAP measure, and additional
information about the limitations of our non-GAAP measures.

Our business strategy is focused on leveraging our Doma Intelligence platform to
provide an overall improved customer and referral partner experience and to
drive time and expense efficiencies principally in our Direct Agents channel. In
our Third-Party Agents channel in contrast, we provide our underwriting
expertise and balance sheet to insure the risk on policies referred by such
Third-Party Agents and, for that service, we typically receive approximately 16%
- 18% of the premium for the policy we underwrite. As such, we use retained
premiums and fees, which is net of the impact of premiums retained by
Third-Party Agents, as an important measure of the earning power of our business
and our future growth trends, and believe it is useful to investors for the same
reasons.

Adjusted gross profit

Adjusted gross profit, a non-GAAP financial measure, is defined as gross profit
(loss) under GAAP, adjusted to exclude the impact of depreciation and
amortization. See "-Non-GAAP Financial Measures" below for a reconciliation of
our adjusted gross profit to gross profit, the most closely comparable GAAP
measure and additional information about the limitations of our non-GAAP
measures.

Management views adjusted gross profit as an important indicator of our
underlying profitability and efficiency. As we generate more business that is
serviced through our Doma Intelligence platform, we expect to reduce fulfillment
costs as our direct labor expense per order continues to decline, and we expect
the adjusted gross profit per transaction to grow faster than retained premiums
and fees per transaction over the long term.

Ratio of adjusted gross profit to retained premiums and fees

The ratio of adjusted gross profit to retained premiums and fees, a non-GAAP
measure, expressed as a percentage, is calculated by dividing adjusted gross
profit by retained premiums and fees. Both the numerator and denominator are net
of the impact of premiums retained by Third-Party Agents because that is a cost
related to our Underwriting segment over which we have limited control, as
Third-Party Agents customarily retain approximately 82% - 84% of the premiums
related to a title insurance policy referral pursuant to the terms of long-term
contracts.

We view the ratio of adjusted gross profit to retained premiums and fees as an
important indicator of our operating efficiency and the impact of our
machine-learning capabilities, and believe it is useful to investors for the
same reasons.

We expect improvement to our ratio of adjusted gross profit to retained premiums
and fees over the long term, reflecting the continued reduction in our average
fulfillment costs per order.

Adjusted EBITDA

Adjusted EBITDA, a non-GAAP financial measure, is defined as net income (loss)
before interest, income taxes and depreciation and amortization, and further
adjusted to exclude the impact of stock-based compensation, severance costs, and
the change in fair value of Warrant and Sponsor Covered Shares liabilities. See
"-Non-GAAP Financial Measures" below for a reconciliation of our adjusted EBITDA
to net loss, the most closely comparable GAAP measure and additional information
about the limitations of our non-GAAP measures.

We review adjusted EBITDA as an important measure of our recurring and
underlying financial performance, and believe it is useful to investors for the
same reason.

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Key Components of Revenues and Expenses

Revenues

Net premiums written

We generate net premiums by underwriting title insurance policies and recognize
premiums in full upon the closing of the underlying transaction. For some of our
Third-Party Agents, we also accrue premium revenue for title insurance policies
we estimate to have been issued in the current period but reported to us by the
Third-Party Agent in a subsequent period. See "-Critical Accounting Policies and
Estimates- Accrued net premiums written from Third-Party Agent referrals" below
for further explanation of this accrual. For the three and six months ended
June 30, 2022 and 2021, the average time lag between the issuing of these
policies by our Third-Party Agents and the reporting of these policies or
premiums to us has been approximately three months. Net premiums written is
inclusive of the portion of premiums retained by Third-Party Agents, which is
recorded as an expense, as described below.

To reduce the risk associated with our underwritten insurance policies, we
utilize reinsurance programs to limit our maximum loss exposure. Under our
reinsurance treaties, we cede the premiums on the underlying policies in
exchange for a ceding commission from the reinsurer and our net premiums written
exclude such ceded premiums.

Our principal reinsurance quota share agreement covers instantly underwritten
policies from refinance and home equity line of credit transactions under which
we historically ceded 100% of the written premium of each covered policy from
January 1, 2021 through February 23, 2021. Pursuant to a renewed agreement,
which became effective on February 24, 2021, we cede only 25% of the written
premium on such instantly underwritten policies up to a total reinsurance
coverage limit of $80.0 million in premiums reinsured, after which we retain
100% of the written premium on instantly underwritten policies. This reduction
in ceding percentage has resulted in higher net premiums written per transaction
when compared to prior period results. Refer to Note 2 to the condensed
consolidated financial statements above for additional details on our
reinsurance treaties.

Escrow, other title-related fees and other

Escrow fees and other title-related fees are charged for managing the closing of
real estate transactions, including the processing of funds on behalf of the
transaction participants, gathering and recording the required closing
documents, providing notary services, and other real estate or title-related
activities. Other fees relate to various ancillary services we provide,
including fees for rendering a cashier's check, document preparation fees,
homeowner's association letter fees, inspection fees, lien letter fees and wire
fees. We also recognize ceding commissions received in connection with
reinsurance treaties, to the extent the amount of such ceding commissions
exceeds reinsurance-related costs.

This revenue item is most directly associated with our Distribution segment. For
segment-level reporting, agent premiums retained by our Distribution segment are
recorded as revenue under the "escrow, other title-related fees and other"
caption of our segment income statements, while our Underwriting segment records
a corresponding expense for insurance policies issued by us. The impact of these
internal transactions is eliminated upon consolidation.

Investment, dividends and other income

Investment, dividends and other income are mainly generated from our investment
portfolio. We primarily invest in fixed income securities, mainly composed of
corporate debt obligations, certificates of deposit, U.S. Treasuries and
mortgage loans.

Expenses

Premiums retained by Third-Party Agents

When customers are referred to us and we underwrite a policy, the referring
Third-Party Agent retains a significant portion of the premium, which typically
amounts to approximately 82% - 84% of the premium. The

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portion of premiums retained by Third-Party Agents is recorded as an expense.
These referral expenses relate exclusively to our Underwriting segment. As we
continue to grow our Direct Agents channel relative to our Third-Party Agents
channel, we expect that premiums retained by Third-Party Agents will decline as
a percentage of revenue over time.

For segment-level reporting, premiums retained by our Direct Agents (which are
recorded as Distribution segment revenue) are recorded as part of "premiums
retained by agents" expense for our Underwriting segment. The impact of these
internal transactions is eliminated upon consolidation.

Title examination expense

Title examination expense is incurred in connection with the search and
examination of public information prior to the issuance of title insurance
policies.

Provision for claims

Provision for claims expense is comprised of three components: IBNR losses,
known claims loss and loss adjustment expenses and escrow-related losses.

IBNR is a loss reserve that primarily reflects the sum of expected losses for
unreported claims. The expense is calculated by applying a rate (the loss
provision rate) to total title insurance premiums. The loss provision rate is
determined throughout the year based in part upon an assessment performed by an
independent actuarial firm utilizing generally accepted actuarial methods. The
assessment also takes account of industry trends, the regulatory environment and
geographic considerations and is updated during the year based on developments.
This loss provision rate is set to provide for losses on current year policies.
Due to our long claim exposure, our provision for claims periodically includes
amounts of adverse or positive claims development on policies issued in prior
years, when claims on such policies are higher or lower than initially expected.

Based on the risk profile of premium vintages over time and based upon the
projections of an independent actuarial firm, we build or release reserves
related to our older policies. Our IBNR may increase as a proportion of our
revenue as we continue to increase the proportion of our business serviced
through our Doma Intelligence platform, though we believe it will decrease over
the long term as our predictive machine intelligence technology produces
improved results.

Known claims loss and loss adjustment expense reserves is an expense that
reflects the best estimate of the remaining cost to resolve a claim, based on
the information available at the time. In practice, most claims do not settle
for the initial known claims provision; rather, as new information is developed
during the course of claims administration, the initial estimates are revised,
sometimes downward and sometimes upward. This additional development is provided
for in the actuarial projection of IBNR, but it is not allocable to specific
claims. Actual costs that are incurred in the claims administration are booked
to loss adjustment expense, which is primarily comprised of legal expenses
associated with investigating and settling a claim.

Escrow-related losses are primarily attributable to clerical errors that arise
during the escrow process and caused by the settlement agent. As the proportion
of our orders processed through our Doma Intelligence platform continues to
increase, we expect escrow-related losses to decline over time.

Personnel costs

Personnel costs include base salaries, employee benefits, bonuses paid to
employees, payroll taxes and severance. This expense is primarily driven by the
average number of employees and our hiring activities in a given period.

In our presentation and reconciliation of segment results and our calculation of
gross profit, we classify personnel costs as either direct or indirect expenses,
reflecting the activities performed by each employee. Direct personnel costs
relate to employees whose job function is directly related to our fulfillment
activities, including underwriters, closing agents, escrow agents, funding
agents, and title and curative agents, and are included in the calculation of
our segment adjusted gross profit. Indirect personnel costs relate to employees
whose roles do not

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directly support our transaction fulfillment activities, including sales agents,
training specialists and customer success agents, segment management, research
and development and other information technology personnel, and corporate
support staff.

Other operating expenses

Other operating expenses are comprised of occupancy, maintenance and utilities,
product taxes (for example, state taxes on premiums written), professional fees
(including legal, audit and other third-party consulting costs), software
licenses and sales tools, travel and entertainment costs, and depreciation and
amortization, among other costs.

Change in fair value of Warrant and Sponsor Covered Shares liabilities

Change in fair value of Warrant and Sponsor Covered Shares liabilities consists
of unrealized gains and losses as a result of recording our Warrants and Sponsor
Covered Shares to fair value at the end of each reporting period.

Income tax expense

Although we are in a consolidated net loss position and report our federal
income taxes as a consolidated tax group, we incur state income taxes in certain
jurisdictions where we have profitable operations. Additionally, we incur
mandatory minimum state income taxes in certain jurisdictions. Also, we have
recognized deferred tax assets but have offset them with a full valuation
allowance, reflecting substantial uncertainty as to their recoverability in
future periods. Until we report at least three years of profitability, we may
not be able to realize the tax benefits of these deferred tax assets.

Results of Operations

We discuss our historical results of operations below, on a consolidated basis
and by segment. Past financial results are not indicative of future results.

Three and Six Months Ended June 30, 2022 Compared to the Three and Six Months
Ended June 30, 2021

The following table sets forth a summary of our consolidated results of
operations for the periods indicated, and the changes between periods.

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                                                                 Three Months Ended June 30,
                                           2022                2021              $ Change               % Change
                                                             (in thousands, except percentages)
Revenues:
Net premiums written                   $  108,926          $  109,271          $     (345)                        -  %
Escrow, other title-related fees and
other                                      14,366              20,065              (5,699)                      (28) %
Investment, dividend and other income         452                 650                (198)                      (30) %
Total revenues                         $  123,744          $  129,986          $   (6,242)                       (5) %

Expenses:

Premiums retained by Third-Party
Agents                                 $   74,638          $   65,181          $    9,457                        15  %
Title examination expense                   5,146               5,500                (354)                       (6) %
Provision for claims                        6,310               6,807                (497)                       (7) %
Personnel costs                            73,233              53,954              19,279                        36  %
Other operating expenses                   23,637              17,181               6,456                        38  %
Total operating expenses               $  182,964          $  148,623          $   34,341                        23  %

Loss from operations                      (59,220)            (18,637)            (40,583)                      218  %

Other (expense) income:
Change in fair value of Warrant and
Sponsor Covered Shares liabilities          5,193                   -               5,193                            *
Interest expense                           (4,489)             (4,451)                (38)                        1  %
Loss before income taxes                  (58,516)            (23,088)            (35,428)                      153  %

Income tax expense                           (136)               (211)                 75                       (36) %
Net loss                               $  (58,652)         $  (23,299)         $  (35,353)                      152  %

* = Not presented as prior period amount is zero

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                                                                  Six Months Ended June 30,
                                           2022                2021              $ Change               % Change
                                                             (in thousands, except percentages)
Revenues:
Net premiums written                   $  204,592          $  217,263          $  (12,671)                       (6) %
Escrow, other title-related fees and
other                                      30,479              38,640              (8,161)                      (21) %
Investment, dividend and other income         880               1,879                (999)                      (53) %
Total revenues                         $  235,951          $  257,782          $  (21,831)                       (8) %

Expenses:

Premiums retained by Third-Party
Agents                                 $  135,240          $  135,519          $     (279)                        -  %
Title examination expense                  11,127              10,353                 774                         7  %
Provision for claims                       10,921              10,055                 866                         9  %
Personnel costs                           151,026              97,419              53,607                        55  %
Other operating expenses                   46,391              31,347              15,044                        48  %
Total operating expenses               $  354,705          $  284,693          $   70,012                        25  %

Loss from operations                     (118,754)            (26,911)            (91,843)                      341  %

Other (expense) income:
Change in fair value of Warrant and
Sponsor Covered Shares liabilities         19,093                   -              19,093                            *
Interest expense                           (8,696)             (7,810)               (886)                       11  %
Loss before income taxes                 (108,357)            (34,721)            (73,636)                      212  %

Income tax expense                     $     (321)         $     (336)         $       15                        (4) %
Net loss                               $ (108,678)         $  (35,057)         $  (73,621)                      210  %

* = Not presented as prior period amount is zero

Revenue

Net premiums written. Net premiums written decreased by $0.3 million, or 0%, in
the three months ended June 30, 2022 compared to the same period in the prior
year, driven by a 38% decrease in premiums from our Direct Agents channel offset
by a 15% increase in premiums from our Third-Party Agents channel. Net premiums
written decreased by $12.7 million, or 6%, in the six months ended June 30, 2022
compared to the same period in the prior year, driven by a 24% decrease in
premiums from our Direct Agents channel and flat premium growth from our
Third-Party Agents channel.

For the three and six months ended June 30, 2022, Direct Agents premium decline
was driven by closed order decline of 40% and 28%, respectively. For the three
month period ended June 30, 2022, the increase in premiums from our Third-Party
Agents channel was driven by an overall increase in premiums associated with new
home buildings that closed during the period.

Escrow, other title-related fees and other. Escrow, other title-related fees and
other decreased $5.7 million, or 28%, in the three months ended June 30, 2022
compared to the same periods in the prior year, driven by the corresponding
closed order decline of 40%. The decline in closed order activity was partially
offset by higher average escrow fees per direct order of 20% during the same
period resulting from a higher mix of purchase orders. Escrow, other
title-related fees and other decreased $8.2 million, or 21%, in the six months
ended June 30, 2022 compared to the same periods in the prior year, driven by
the corresponding closed order decline of 28%. The

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decline in closed order activity was partially offset by higher average escrow
fees per order of 10% during the same period resulting from a higher mix of
purchase orders.

Investment, dividend and other income. Investment, dividend and other income
decreased $1.0 million or 53% in the six months ended June 30, 2022 compared to
the same period in the prior year, primarily due to one-time realized gains on
investments from portfolio rebalancing during the six months ended June 30,
2021.

Expenses

Premiums retained by Third-Party Agents. Premiums retained by Third-Party Agents
increased by $9.5 million, or 15%, in the three months ended June 30, 2022 and
remained flat for the six months ended June 30, 2022 compared to the same
periods in the prior year.  These movements were driven principally by premium
growth in our Third-Party Agents channel. There was no material change in the
average commissions paid to our Third-Party Agents.

Title examination expense. Title examination expense decreased by $0.4 million,
or 6%, in the three months ended June 30, 2022 compared to the same period in
the prior year, due to the corresponding declines in order volumes. Offsetting
these declines was an increase in geography-specific closing costs and fixed
expenses incurred to support fulfillment, including software license fees and
title plant maintenance expenses. In the six months ended June 30, 2022, title
examination expense increased $0.8 million, or 7%, compared to the same periods
in the prior year, due to the closing costs and fixed expenses previously
described.

Provision for claims. Provision for claims decreased by $0.5 million, or 7%, in
the three months ended June 30, 2022 compared to the same period in the prior
year primarily due to a reduction in the current period provision for claims
accrual percentage used within each respective period. The provision for claims
in total, expressed as a percentage of net premiums written, was 5.8% and 6.2%
for the three months ended June 30, 2022 and 2021, respectively.

Provision for claims increased by $0.9 million, or 9%, in the six months ended
June 30, 2022 compared to the same period in the prior year primarily due to a
decrease in reserve releases for claims incurred from prior year business. For
the six months ended June 30, 2022 reserve releases related to prior year
policies were $2.1 million compared to $4.5 million for the corresponding period
in the prior year. This was offset by a reduction in the provision for claims
related to the current year due to the corresponding decrease in premiums
written. The provision for claims, expressed as a percentage of net premiums
written, was 5.3% and 4.6% for the six months ended June 30, 2022 and 2021,
respectively. The reported loss emergence on policies issued in prior years was
lower than expected.

Personnel costs. Personnel costs increased by $19.3 million, or 36%, in the
three months ended June 30, 2022 and by $53.6 million, or 55%, in the six months
ended June 30, 2022 compared to the same periods in the prior year, due to
investments in direct labor and customer acquisition, investments in research
and development, the expansion of our corporate support functions to operate as
a public company, and an increase in operations and management staff supporting
the Direct Agents channel as the organization invests in driving growth of Doma
Intelligence-enabled purchase closings.

Other operating expenses. Other operating expenses increased by $6.5 million, or
38%, in the three months ended June 30, 2022 and by $15.0 million, or 48%, in
the six months ended June 30, 2022 compared to the same periods in the prior
year, driven by higher corporate support expenses to operate as a public company
such as improved operating systems and human resources services, higher expenses
to support revenue growth such as hardware and software purchases and travel and
entertainment spend, higher amortization expenses related to investments in the
development of our Doma Intelligence platform, higher insurance costs, higher
occupancy costs and a higher premium tax rate.

Change in fair value of Warrant and Sponsor Covered Shares liabilities. The
change in fair value of Warrant and Sponsor Covered Shares liabilities (as
defined in Note 2) increased by $5.2 million in the three months ended June 30,
2022 and by $19.1 million in the six months ended June 30, 2022 compared to the
same periods in the prior year due to the addition of these liabilities from the
Business Combination in the third quarter of 2021.

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Interest expense. Interest expense remained flat in the three months ended
June 30, 2022 as there was no material change in the debt structure between
those periods. Interest expense increased by $0.9 million, or 11%, in the six
months ended June 30, 2022 compared to the same period in the prior year, due to
a higher amount of debt outstanding, which is a result of the paid in kind
interest expense on the $150.0 million Senior Debt facility that was funded
during the first quarter of 2021.

Supplemental Segment Results Discussion - Three and Six Months Ended June 30,
2022 Compared to the Three and Six Months Ended June 30, 2021

The following table sets forth a summary of the results of operations for our
Distribution and Underwriting segments for the years indicated. See "-Basis of
Presentation" above.

                                                       Three Months Ended June 30, 2022                                                           

Three Months Ended June 30, 2021

                               Distribution           Underwriting           Eliminations           Consolidated           Distribution           Underwriting           Eliminations           Consolidated
                                                                                                              (in thousands)
Net premiums written         $           -          $     108,926          $           -          $     108,926          $           -          $    

109,381 $ (110) $ 109,271
Escrow, other title-related
fees and other (1)

                  30,013                    535                (16,182)                14,366                 46,288                    389                (26,612)                20,065
Investment, dividend and
other income                           (33)                   485                      -                    452                     37                    613                      -                    650
Total revenue                $      29,980          $     109,946         

$ (16,182) $ 123,744 $ 46,325 $ 110,383 $ (26,722) $ 129,986
Premiums retained by agents
(2)

                                      -                 90,820                (16,182)                74,638                      -                 91,903                (26,722)                65,181
Direct labor (3)                    21,091                  2,799                      -                 23,890                 18,986                  1,916                      -                 20,902
Other direct costs (4)               5,374                  2,642                      -                  8,016                  5,881                  1,680                      -                  7,561
Provision for claims                 1,257                  5,053                      -                  6,310                    (25)                 6,832                      -                  6,807
Adjusted gross profit (5)    $       2,258          $       8,632          $           -          $      10,890          $      21,483          $       8,052          $           -          $      29,535



                                                        Six Months Ended June 30, 2022                                                             

Six Months Ended June 30, 2021

                               Distribution           Underwriting           Eliminations           Consolidated           Distribution           Underwriting           Eliminations           Consolidated
                                                                                                              (in thousands)
Net premiums written         $           -          $     204,592          $           -          $     204,592          $           -          $     

218,143 $ (880) $ 217,263
Escrow, other title-related
fees and other (1)

                  64,293                  1,338                (35,152)                30,479                 83,933                  1,798                (47,091)                38,640
Investment, dividend and
other income                           (19)                   899                      -                    880                     83                  1,796                      -                  1,879
Total revenue                $      64,274          $     206,829         

$ (35,152) $ 235,951 $ 84,016 $ 221,737 $ (47,971) $ 257,782
Premiums retained by agents
(2)

                                      -                170,392                (35,152)               135,240                      -                183,490                (47,971)               135,519
Direct labor (3)                    46,644                  5,044                      -                 51,688                 35,093                  3,788                      -                 38,881
Other direct costs (4)              11,433                  5,409                      -                 16,842                 11,197                  3,473                      -                 14,670
Provision for claims                 1,856                  9,065                      -                 10,921                    534                  9,521                      -                 10,055
Adjusted gross profit (5)    $       4,341          $      16,919          $           -          $      21,260          $      37,192          $      21,465          $           -          $      58,657


_________________
(1)Includes fee income from closings, escrow, title exams, ceding commission
income, as well as premiums retained by Direct Agents.
(2)This expense represents a deduction from the net premiums written for the
amounts that are retained by Direct Agents and Third-Party Agents as
compensation for their efforts to generate premium income for our Underwriting
segment. The impact of premiums retained by our Direct Agents and the expense
for reinsurance or co-insurance procured on Direct Agent sourced premiums are
eliminated in consolidation.
(3)Includes all compensation costs, including salaries, bonuses, incentive
payments, and benefits, for personnel involved in the direct fulfillment of
title and/or escrow services. Direct labor excludes severance costs.
(4)Includes title examination expense, office supplies, and premium and other
taxes.
(5)See "-Non-GAAP Financial Measures-Adjusted gross profit" below for a
reconciliation of consolidated adjusted gross profit, which is a non-GAAP
measure, to our gross profit, the most closely comparable GAAP financial
measure.

Distribution segment revenue decreased by $16.3 million, or 35%, and $19.7
million, or 23%, for three and six months ended June 30, 2022, respectively,
compared to the same period in the prior year driven by the closed order

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decline discussed above. For the three and six months ended June 30, 2022,
higher average escrow revenue per order in both periods offset the decrease in
Distribution segment revenue from fewer closed orders.

Underwriting segment revenue decreased by $0.4 million, or 0%, and $14.9
million, or 7%, for the three and six months ended June 30, 2022, respectively,
as compared to the same period in the prior year, reflecting the reduction in
title policies underwritten from Direct Agents as a result of current market
conditions.

Distribution segment adjusted gross profit decreased by $19.2 million, or 89%,
and $32.9 million, or 88%, for the three and six months ended June 30, 2022,
respectively, compared to the same period in the prior year, driven by closed
order decline, a higher mix of Doma Enterprise closed orders, which carry a
lower price point as compared to the Local channel, and investments in
fulfillment infrastructure to support volume growth and migration of
transactions to the Doma Intelligence platform.

Underwriting segment adjusted gross profit increased by $0.6 million, or 7%,
during the three months ended June 30, 2022 compared to the same period in the
prior year, due to a reduction in the provision for claims in total, expressed
as a percentage of net premiums written, for the corresponding periods.
Underwriting segment adjusted gross profit decreased by $4.5 million, or 21%,
during the six months ended June 30, 2022 compared to the same period in the
prior year, reflecting market conditions, a higher mix of premiums from our
Third-Party Agent channel resulting in higher premiums retained by agents, a
higher premium tax rate, and an increase in provision for title claims expenses.

Supplemental Key Operating and Financial Indicators Results Discussion - Three
and Six Months Ended June 30, 2022 Compared to the Three and Six Months Ended
June 30, 2021

The following table presents our key operating and financial indicators,
including our non-GAAP financial measures, for the periods indicated, and the
changes between periods. This discussion should be read only as a supplement to
the discussion of our GAAP results above. See "-Non-GAAP Financial Measures"
below for important information about the non-GAAP financial measures presented
below and their reconciliation to the respective most closely comparable GAAP
measures.

                                                               Three Months Ended June 30,
                                         2022                 2021              $ Change               % Change
                                          (in thousands, except percentages and open and closed order numbers)
Opened orders                            25,231               41,491             (16,260)                      (39) %
Closed orders                            18,799               31,436             (12,637)                      (40) %

Retained premiums and fees          $    49,106           $   64,805          $  (15,699)                      (24) %
Adjusted gross profit                    10,890               29,535             (18,645)                      (63) %
Ratio of adjusted gross profit to
retained premiums and fees                   22   %               46  %            (24) p.p                    (52) %
Adjusted EBITDA                     $   (43,390)          $  (11,903)         $  (31,487)                      265  %



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                                                                Six Months Ended June 30,
                                         2022                 2021              $ Change               % Change
                                          (in thousands, except percentages and open and closed order numbers)
Opened orders                            60,423               82,575             (22,152)                      (27) %
Closed orders                            46,146               64,086             (17,940)                      (28) %

Retained premiums and fees          $   100,711           $  122,263          $  (21,552)                      (18) %
Adjusted gross profit                    21,260               58,657             (37,397)                      (64) %
Ratio of adjusted gross profit to
retained premiums and fees                   21   %               48  %            (27) p.p                    (56) %
Adjusted EBITDA                     $   (88,295)          $  (15,182)         $  (73,113)                      482  %



Opened and closed orders

For the three months ending June 30, 2022, we opened 25,231 orders and closed
18,799 orders, a decrease of 39% and 40%, respectively, over the same period in
the prior year. For the six months ending June 30, 2022, we opened 60,423 orders
and closed 46,146 orders, a decrease of 22,152 and 17,940, respectively, over
the same period in the prior year. The decline in both open and closed orders in
both periods is due to the rising interest rate environment and shrinking
population of refinance-eligible homeowners along with the reduction in home
inventories that limit overall home purchase transactions.

Closed orders decreased 19% in our Doma Enterprise channel and decreased by 51%
in our Local channel for the three months ended June 30, 2022 as compared to the
same period in the prior year due to the contracting refinance market and low
home inventories, and further exacerbated by a decline in closed order
pull-through rates as prospective transactors were impacted by rapidly rising
interest rates. Closed orders increased 11% in our Doma Enterprise channel for
the six months ended June 30, 2022 as compared to the same period in the prior
year, due to new customer acquisitions, increased wallet share with existing
customers, and an expanding geographical footprint. Closed orders decreased by
48% in our Local channel for the six months ended June 30, 2022 as compared to
the same period in the prior year due to the contracting refinance market and
low home inventories.

Retained premiums and fees

Retained premiums and fees decreased by $15.7 million, or 24%, and $21.6
million, or 18%, during the three and six months ended June 30, 2022,
respectively, compared to the same periods in the prior year, driven by closed
order reductions and title policy declines across the Direct Agent channel.
Offsetting this decline was growth from the Third-Party Agent channel as
retained premiums net of Third-Party Agent commission increased.

Adjusted gross profit

Adjusted gross profit decreased by $18.6 million, or 63%, and $37.4 million, or
64%, during the three and six months ended June 30, 2022, respectively, compared
to the same periods in the prior year, due to the corresponding declines in
retained premiums and fees in the same periods. Investments in fulfillment
infrastructure to support volume growth and migration of transactions to the
Doma Intelligence platform contributed to the decrease in adjusted gross profit.

Ratio of adjusted gross profit to retained premiums and fees

The ratio of adjusted gross profit to retained premiums and fees decreased 24
percentage points and 27 percentage points during the three and six months ended
June 30, 2022, respectively, compared to the same periods in the prior year. The
decreases are primarily due to higher direct labor expenses of $3.0 million, or
14%, and $12.8 million, or 33%, during the three and six months ended June 30,
2022, respectively, compared to the same periods in the prior year. The rise in
direct labor expenses are the result of hiring fulfillment labor in advance of
volume growth and the near-term inefficiencies associated with the migration of
transactions to the Doma Intelligence platform. Contributing to the decrease in
the ratio during the three and six months ended June 30, 2022 was a higher mix
of

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Doma Enterprise closed orders, which carry a lower price point as compared to
the Local channel, and an increase in the premium tax rate. The increase in the
provision for claims as a percentage of net written premium further decreased
the ratio of adjusted gross profit to retained premiums and fees during the six
month period ended June 30, 2022.

Adjusted EBITDA

Adjusted EBITDA decreased by $31.5 million to negative $43.4 million and by
$73.1 million to negative $88.3 million for the three and six months ended
June 30, 2022, respectively. The declines in adjusted EBITDA in each period were
due to a decrease in retained premium and fees and higher operating costs from
investments in corporate support functions to successfully operate as a public
company, research and development, and operations and management staff to
accelerate growth and transformation of our home purchase product offering on
the Doma Intelligence platform.

Non-GAAP Financial Measures

The non-GAAP financial measures described in this Quarterly Report should be
considered only as supplements to results prepared in accordance with GAAP and
should not be considered as substitutes for GAAP results. These measures,
retained premiums and fees, adjusted gross profit, and adjusted EBITDA, have not
been calculated in accordance with GAAP and are therefore not necessarily
indicative of our trends or profitability in accordance with GAAP. These
measures exclude or otherwise adjust for certain cost items that are required by
GAAP. Further, these measures may be defined and calculated differently than
similarly-titled measures reported by other companies, making it difficult to
compare our results with the results of other companies. We caution investors
against undue reliance on our non-GAAP financial measures as a substitute for
our results in accordance with GAAP.

Management uses these non-GAAP financial measures, in conjunction with GAAP
financial measures to: (i) monitor and evaluate the growth and performance of
our business operations; (ii) facilitate internal comparisons of the historical
operating performance of our business operations; (iii) facilitate external
comparisons of the results of our overall business to the historical operating
performance of other companies that may have different capital structures or
operating histories; (iv) review and assess the performance of our management
team and other employees; and (v) prepare budgets and evaluate strategic
planning decisions regarding future operating investments.

Retained premiums and fees

The following presents our retained premiums and fees and reconciles the measure
to our gross profit, the most closely comparable GAAP financial measure, for the
periods indicated:

                                            Three Months Ended June 30,                  Six Months Ended June 30,
                                             2022                  2021                  2022                  2021
                                                  (in thousands)                              (in thousands)
Revenue                                $      123,744          $  129,986          $      235,951          $  257,782
Minus:
Premiums retained by Third-Party
Agents                                         74,638              65,181                 135,240             135,519
Retained premiums and fees             $       49,106          $   64,805          $      100,711          $  122,263
Minus:
Direct labor                                   23,890              20,902                  51,688              38,881
Provision for claims                            6,310               6,807                  10,921              10,055
Depreciation and amortization                   3,747               3,021                   6,983               5,727
Other direct costs (1)                          8,016               7,561                  16,842              14,670
Gross Profit                           $        7,143          $   26,514          $       14,277          $   52,930


__________________

(1)Includes title examination expense, office supplies, and premium and other
taxes.

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Adjusted gross profit

The following table reconciles our adjusted gross profit to our gross profit,
the most closely comparable GAAP financial measure, for the periods indicated:

                                           Three Months Ended June 30,                 Six Months Ended June 30,
                                            2022                  2021                  2022                 2021
                                                 (in thousands)                              (in thousands)
Gross Profit                          $        7,143          $   26,514          $      14,277          $   52,930
Adjusted for:
Depreciation and amortization                  3,747               3,021                  6,983               5,727
Adjusted Gross Profit                 $       10,890          $   29,535          $      21,260          $   58,657


Adjusted EBITDA

The following table reconciles our adjusted EBITDA to our net loss, the most
closely comparable GAAP financial measure, for the periods indicated:

                                           Three Months Ended June 30,                    Six Months Ended June 30,
                                            2022                  2021                     2022                    2021
                                                 (in thousands)                                 (in thousands)

Net loss (GAAP)                       $      (58,652)         $  (23,299)         $     (108,678)              $  (35,057)
Adjusted for:
Depreciation and amortization                  3,747               3,021                   6,983                    5,727
Interest expense                               4,489               4,451                   8,696                    7,810
Income taxes                                     136                 211                     321                      336
EBITDA                                $      (50,280)         $  (15,616)         $      (92,678)              $  (21,184)
Adjusted for:
Stock-based compensation                       8,255               3,713                  19,648                    6,002
Severance costs                                3,828                   -                   3,828                        -
Change in fair value of Warrant and
Sponsor Covered Shares liabilities            (5,193)                  -                 (19,093)                       -
Adjusted EBITDA                       $      (43,390)         $  (11,903)         $      (88,295)              $  (15,182)

Liquidity and Capital Resources

We measure liquidity in terms of our ability to fund the cash requirements of
our business operations, including our working capital and capital expenditure
needs and other commitments. Our recurring working capital requirements relate
mainly to our cash operating costs. Our capital expenditure requirements consist
mainly of software development related to our Doma Intelligence platform.

We had $229.3 million in cash and cash equivalents and restricted cash as of
June 30, 2022. We believe our operating cash flows, together with our cash on
hand and the cash proceeds from the Business Combination and the related private
placement, will be sufficient to meet our working capital and capital
expenditure requirements for a period of at least 12 months from the date of
this Quarterly Report.

We may need additional cash due to changing business conditions or other
developments, including unanticipated regulatory developments and competitive
pressures. To the extent that our current resources are insufficient to satisfy
our cash requirements, we may need to seek additional equity or debt financing.

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Debt

Senior secured credit agreement

In December 2020, Old Doma entered into a loan and security agreement with
Hudson Structured Capital Management Ltd. ("HSCM"), providing for a $150.0
million senior secured term loan ("Senior Debt"), which was fully funded by the
lenders, which are affiliates of HSCM, at its principal face value on January
29, 2021 (the "Funding Date") and matures on the fifth anniversary of the
Funding Date. The Senior Debt bears interest at a rate of 11.25% per annum, of
which 5.0% is payable in cash in arrears and the remaining 6.25% accrues to the
outstanding principal balance on a PIK basis. Interest is payable or compounded,
as applicable, quarterly. Principal prepayments on the Senior Debt are
permitted, subject to a premium, which declines from 8% of principal today to 4%
in 2023 and to zero in 2024.

The Senior Debt is secured by a first-priority pledge and security interest in
substantially all of the assets of our wholly owned subsidiary States Title
(which represents substantially all of our assets), including the assets of any
of its existing and future domestic subsidiaries (in each case, subject to
customary exclusions, including the exclusion of regulated insurance company
subsidiaries). The Senior Debt is subject to customary affirmative and negative
covenants, including limits on the incurrence of debt and restrictions on
acquisitions, sales of assets, dividends and certain restricted payments. The
Senior Debt is also subject to two financial maintenance covenants, related to
liquidity and revenues. The liquidity covenant requires States Title to have at
least $20.0 million of liquidity, calculated as of the last day of each month,
as the sum of (i) our unrestricted cash and cash equivalents and (ii) the
aggregate unused and available portion of any working capital or other revolving
credit facility. The revenue covenant, which is tested as of the last day of
each fiscal year, requires that States Title's consolidated GAAP revenue for the
year to be greater than $130.0 million. The Senior Debt is subject to customary
events of default and cure rights. As of the date of this Quarterly Report,
States Title is in compliance with all Senior Debt covenants.

Upon funding, Old Doma issued penny warrants to affiliates of HSCM equal to
1.35% of Old Doma's fully diluted shares. The warrants were net exercised on the
Closing Date and such affiliates of HSCM received the right to receive
approximately 4.2 million shares of our common stock.

Other commitments and contingencies

Our commitments for leases, excluding any imputed interest, related to our
office space and equipment, amounted to $36.3 million as of June 30, 2022 of
which $4.8 million is payable in 2022. Refer to Note 17 to our condensed
consolidated financial statements for a summary of our future commitments. Our
headquarters lease expires in 2024. As of June 30, 2022, we did not have any
other material commitments for cash expenditures. We also administer escrow
deposits as a service to customers, a substantial portion of which are held at
third-party financial institutions. Such deposits are not reflected on our
balance sheet, but we could be contingently liable for them under certain
circumstances (for example, if we dispose of escrowed assets). Such contingent
liabilities have not materially impacted our results of operations or financial
condition to date and are not expected to do so in the near term.

Cash flows

The following table summarizes our cash flows for the periods indicated:

                                                  Six Months Ended June 30,
                                                     2022                

2021

                                                       (in thousands)
Net cash used in operating activities       $     (100,588)           $ 

(17,409)

Net cash used in investing activities              (54,116)             

(19,817)

Net cash provided by financing activities              174               85,453


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Operating activities

In the first six months of 2022, net cash used in operating activities was
$100.6 million driven by the net loss of $108.7 million, cash paid for accrued
expenses of $16.4 million and non-cash costs relating to the change in the fair
value of warrant and Sponsor Covered Shares liabilities of $19.1 million. This
was offset by changes in prepaid expenses, deposits and other assets of $5.4
million and the liability for loss and loss adjustments expenses of $4.7 million
and non-cash costs including depreciation and amortization of $7.0 million and
stock-based compensation expense of $20.0 million.

In the first six months of 2021, net cash used in operating activities was $17.4
million driven by the net loss of $35.1 million and cash paid for prepaid
expenses associated with the Business Combination of $11.6 million. This was
partially offset by increases of accrued expenses and other liabilities of $5.3
million and the liability for loss and loss adjustment expenses of $4.9 million
and non-cash costs including depreciation and amortization of $5.7 million and
stock-based compensation expense of $5.3 million.

Investing activities

Our capital expenditures have historically consisted mainly of costs incurred in
the development of the Doma Intelligence platform. Our other investing
activities generally consist of transactions in fixed maturity investment
securities to provide regular interest payments.

In the first six months of 2022, net cash used in investing activities was $54.1
million, and reflected $2.1 million and $49.6 million of purchases of
held-to-maturity and available-for-sale fixed maturity securities, respectively,
offset by $17.0 million of proceeds from the sale of held-to-maturity
investments. Cash paid for fixed assets was $20.6 million in the same period,
largely consisting of technology development costs related to the Doma
Intelligence platform.

In the first six months of 2021, net cash used in investing activities was $19.8
million, and reflected mainly $24.0 million of proceeds from the sale of
investments offset by $33.4 million of purchases of investments. Cash paid for
fixed assets was $10.9 million in the same period, largely consisting of
technology development costs related to Doma Intelligence.

Financing activities

Net cash provided by financing activities was immaterial in the first six months
of 2022.

Net cash provided by financing activities was $85.5 million in the first six
months of 2021, reflecting $150.0 million in proceeds from the Senior Debt,
offset by a $65.5 million payment on the Lennar seller financing note.

Critical Accounting Policies and Estimates

Our consolidated financial statements have been prepared in accordance with
GAAP. Preparation of the financial statements requires management to make
several judgments, estimates and assumptions relating to the reported amount of
revenue and expenses, assets and liabilities and the disclosure of contingent
assets and liabilities. We evaluate our significant estimates on an ongoing
basis, including, but not limited to, liability for loss and loss adjustment
expenses, goodwill, accrued net premiums written from Third-Party Agent
referrals, and the Sponsor Covered Shares liability. We consider an accounting
judgment, estimate or assumption to be critical when (1) the estimate or
assumption is complex in nature or requires a high degree of judgment and (2)
the use of different judgments, estimates and assumptions could have a material
impact on our consolidated financial statements. Our significant accounting
policies are described in Note 2 to our annual audited consolidated financial
statements. Our critical accounting estimates are described below.

Liability for loss and loss adjustment expenses

Our liability for loss and loss adjustment expenses include mainly reserves for
known claims as well as reserves for IBNR claims. Each known claim is reserved
based on our estimate of the costs required to settle the claim.

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IBNR is a loss reserve that primarily reflects the sum of expected losses for
unreported claims. The expense is calculated by applying a loss provision rate
to total title insurance premiums. With the assistance of a third-party
actuarial firm, we determine the loss provision rate for the policies written in
the current and prior years. This assessment considers factors such as
historical experience and other factors, including industry trends, claim loss
history, legal environment, geographic considerations and the types of title
insurance policies written (i.e., real estate purchase or refinancing
transactions). The loss provision rate is set to provide for losses on current
year policies, but due to development of prior years and our long claim
duration, it periodically includes amounts of estimated adverse or positive
development on prior years' policies. The provision rate on prior year policies
will continue to change as actual experience on those specific policy years
develop. As the Company's claims experience matures, we refine estimates on
prior policy years to put more consideration to the Company's actual claims
experience as compared to industry experience. Changes in the loss provision
rate for recent policy years are considered likely and could result in a
material adjustment to the IBNR reserves.

The estimates used require considerable judgment and are established as
management's best estimate of future outcomes, however, the amount of IBNR
reserves based on these estimates could ultimately prove to be inadequate to
cover actual future claims experience. We continually monitor for any events
and/or circumstances that arise during the year which may indicate that the
assumptions used to record the provision for claims estimate requires
reassessment.

Our total loss reserve as of June 30, 2022 amounted to $84.9 million, which we
believe, based on historical claims experience and actuarial analyses, is
adequate to cover claim losses resulting from pending and future claims for
policies issued through June 30, 2022.

A summary of the Company's loss reserves is as follows:

                           June 30, 2022             December 31, 2021
                                        ($ in thousands)
Known title claims    $       9,341     11  %    $          7,578      9  %
IBNR title claims            75,474     88  %              72,621     90  %
Total title claims    $      84,815     99  %    $         80,199     99  %
Non-title claims                121      1  %                  68      1  %
Total loss reserves   $      84,936    100  %    $         80,267    100  %

We continually review and adjust our reserve estimates to reflect loss
experience and any new information that becomes available.

Goodwill

We have significant goodwill on our balance sheet related to acquisitions, as
goodwill represents the excess of the acquisition price over the fair value of
net assets acquired and liabilities assumed in a business combination. Goodwill
is tested and reviewed annually for impairment on October 1 of each year, and
between annual tests if events or circumstances arise that would more likely
than not reduce the fair value of any one of our reporting units below its
respective carrying amount. In addition, an interim impairment test may be
completed upon a triggering event or when there is a reorganization of reporting
structure or disposal of all or a portion of a reporting unit. As of June 30,
2022, we had $111.5 million of goodwill, relating to the North American Title
Acquisition, of which $88.1 million and $23.4 million was allocated to our
Distribution and Underwriting reporting units, respectively.

In performing our annual goodwill impairment test, we first perform a
qualitative assessment, which requires that we consider significant estimates
and assumptions regarding macroeconomic conditions, industry and market
considerations, cost factors, overall financial performance, changes in
management or key personnel, changes in strategy, changes in customers, changes
in the composition or carrying amount of a reporting unit or other factors that
have the potential to impact fair value. If, after assessing the totality of
events and circumstances, we determine that it is more likely than not that the
fair values of our reporting units are greater than the carrying amounts, then
the quantitative goodwill impairment test is not performed, as goodwill is not
considered to be impaired. However, if we determine that the fair value of a
reporting unit is more likely than not to be less than its carrying value, then
a

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quantitative assessment is performed. For the quantitative assessment, the
determination of estimated fair value of our reporting units requires us to make
assumptions about future discounted cash flows, including profit margins,
long-term forecasts, discount rates and terminal growth rates and, if possible,
a comparable market transaction model. If, based upon the quantitative
assessment, the reporting unit fair value is less than the carrying amount, a
goodwill impairment is recorded equal to the difference between the carrying
amount of the reporting unit's goodwill and its fair value, not to exceed the
carrying value of goodwill allocated to that reporting unit, and a corresponding
impairment loss is recorded in the consolidated statements of operations.

We conduct our annual goodwill impairment test as of October 1. Based on the
last test performed, we determined, after performing a test of each reporting
unit, that the fair value of each reporting unit exceeded its respective
carrying value. Accordingly, there was no indication of impairment and the
quantitative goodwill impairment test was not performed. We did not identify any
events, changes in circumstances, or triggering events since the performance of
our annual goodwill impairment test that would require us to perform an interim
quantitative goodwill impairment test during the year.

Accrued net premiums written from Third-Party Agent referrals

We recognize revenues on title insurance policies issued by Third-Party Agents
when notice of issuance is received from Third-Party Agents, which is generally
when cash payment is received. In addition, we estimate and accrue for revenues
on policies sold but not reported by Third-Party Agents as of the relevant
balance sheet closing date. This accrual is based on historical transactional
volume data for title insurance policies that have closed and were not reported
before the relevant balance sheet closing, as well as trends in our operations
and in the title and housing industries. There could be variability in the
amount of this accrual from period to period and amounts subsequently reported
to us by Third-Party Agents may differ from the estimated accrual recorded in
the preceding period. If the amount of revenue subsequently reported to us by
Third Party Agents is higher or lower than our estimate, we record the
difference in revenue in the period in which it is reported. The time lag
between the closing of transactions by Third-Party Agents and the reporting of
policies, or premiums from policies issued by Third-Party Agents to us has been
approximately three months. In addition to the premium accrual, we also record
accruals for the corresponding direct expenses related to this revenue,
including premiums retained by Third-Party Agents, premium taxes, and provision
for claims.

Sponsor Covered Shares liability

The Sponsor Covered Shares, as described in Note 3, will become vested
contingent upon the price of our common stock exceeding certain thresholds or
upon some strategic events, which include events that are not indexed to our
common stock.

We obtained a third-party valuation of the Sponsor Covered Shares as of
December 31, 2021 and June 30, 2022 using the Monte Carlo simulation methodology
and based upon market inputs regarding stock price, dividend yield, expected
term, volatility and risk-free rate. The share price represents the trading
price as of each valuation date. The expected dividend yield is zero as we have
never declared or paid cash dividends and have no current plans to do so during
the expected term. The expected term represents the vesting period, which is 9.1
years. The expected volatility of 60.0% was estimated considering (i) the Doma
implied volatility calculated using longest term stock option (ii) the Doma
implied warrant volatility using the term of the Public and Private Warrants and
(iii) median leverage adjusted (asset) volatility calculated using a set of
Guideline Public Companies ("GPCs"). Volatility for the GPCs was calculated over
a lookback period of 9.1 years (or longest available data for GPCs whose trading
history was shorter than 9.1 years), commensurate with the contractual term of
the Sponsor Covered Shares. The risk-free rate utilizes the 10-year U.S.
Constant Maturity. Finally, the annual change in control probability is
estimated to be 2.0%.

As of June 30, 2022, the Sponsor Covered Shares liability amounted to $0.7
million.

New Accounting Pronouncements

For information about recently issued accounting pronouncements, refer to Note 2
to our condensed consolidated financial statements included elsewhere in this
filing.

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Emerging Growth Company Accounting Election

Section 102(b)(1) of the Jumpstart Our Business Startups Act of 2012 (the "JOBS
Act") exempts emerging growth companies from being required to comply with new
or revised financial accounting standards until private companies (that is,
those that have not had a Securities Act registration statement declared
effective or do not have a class of securities registered under the Exchange
Act) are required to comply with the new or revised financial accounting
standards. The JOBS Act provides that a company can elect to opt out of the
extended transition period and comply with the requirements that apply to
non-emerging growth companies but any such election to opt out is irrevocable.
The Company has elected not to opt out of such extended transition period which
means that when a standard is issued or revised and it has different application
dates for public or private companies, the Company, as an emerging growth
company, can adopt the new or revised standard at the time private companies
adopt the new or revised standard. This may make comparison of the Company's
condensed financial statements with another public company which is neither an
emerging growth company nor an emerging growth company which has opted out of
using the extended transition period difficult or impossible because of the
potential differences in accounting standards used.