Risk Factors Update Summary

• Increased reliance on management judgment for model updates may impact business operations significantly.
• Increased regulatory scrutiny on RESPA, TILA, and TCPA compliance could lead to financial penalties.
• Expansion internationally and into new business lines introduces inherent risks and uncertainties.
• The company experienced a significant decline in Funded Loan Volume from approximately 10,400 team members to 820.
• Increased interest rates led to a sizable reduction in the refinance market, impacting revenues.
• Increased reliance on third-party software, hardware, and services may lead to decreased functionality until equivalent technology is developed. This change might result in delays in product development and increased operating costs.
• Increased risk in renewing existing warehouse lines due to loan performance, access to secondary market, and reputational concerns by lenders.
• The company qualifies as an "emerging growth company" and "smaller reporting company," delaying new accounting standards adoption.
• Dependence on online marketing for website traffic may lead to increased costs and decreased traffic.
• Regulatory changes impacting search engines and social media platforms may reduce marketing effectiveness.
• Business significantly impacted by interest rates; changes may materially affect financial performance and cash flows.
• The lack of independent underwriter review increases investment risk due to potential undisclosed facts.
• Failure to comply with foreclosure regulations may increase operating costs and regulatory actions.
• Higher interest rates negatively impact purchase mortgage loan business, reducing demand for loans.
• Acquisitions in the United Kingdom pose challenges in operations and compliance with regulations.
• Challenges to the Mortgage Electronic Registration System could delay foreclosure processes and increase costs.
• Uncertainty in borrowing money due to elevated interest rates impacting ability to fund loan production.
• Revenue is derived almost entirely from mortgage loan production. Failure to predict demand could significantly impact profitability.
• Challenges in refinancing debt and obtaining additional funds may be affected by various factors, potentially leading to increased costs and decreased loan production. This change highlights the financial risks associated with debt refinancing and borrowing.
• Risks related to privacy, use, and security of customer information are significant and could lead to financial liabilities.
• The company incurred net losses of $301.1 million in 2021, $888.8 million in 2022, and $536.4 million in 2023.
• Risks associated with open source software licenses could lead to limitations on software use, increased costs, and potential litigation. This change highlights potential legal and financial risks related to open source software.
• The exclusive forum provision in the Amended and Restated Charter may discourage lawsuits against directors.
• Intellectual property protection challenges may result in misappropriation, infringement, or loss of proprietary rights, impacting competitiveness and brand reputation. This change emphasizes the importance of protecting intellectual property rights.
• Exposure to interest rate risk with variable rates on finance and warehouse lines impacting debt service obligations.
• Non-compliance with Nasdaq's Bid Price Rule may lead to delisting, requiring redemption of Convertible Note, impacting liquidity and trading restrictions. This change underscores the potential consequences of non-compliance with listing requirements.
• Potential delisting from Nasdaq due to non-compliance with minimum bid price requirement.
• Material weaknesses in internal controls over financial reporting could result in misstatements.
• Reliance on warehouse lines for funding loans and operations, coupled with potential delays or failures in mortgage loan sales, could adversely affect liquidity and repayment capabilities. This change emphasizes the importance of stable funding sources for loan operations.
• Increased focus on developing new products and refining existing ones to remain competitive.
• Competition in the mortgage market intensifies, affecting pricing, loan programs, and customer service levels.
• Litigation involving CEO could divert resources and negatively impact business operations and reputation.
• Fannie Mae required the company to post $5.0 million in a designated money market fund due to a decline in profitability.
• Failure to comply with underwriting guidelines could lead to penalties, impacting business adversely.
• Changes in interest rates affect revenue from sale of MSRs, with values sensitive to rate changes.
• Technological advancements are crucial; failure to adapt could decrease demand for product offerings.
• Regulatory focus on fair lending practices could lead to fines or penalties for discriminatory practices.
• Debt obligations could impact cash flow, limit funding for operations, and increase vulnerability to economic conditions. This change highlights the potential financial impact of debt obligations on the company's operations.
• Reliance on third-party technology and service providers poses risks of service disruptions and security breaches.
• Increased regulatory oversight and complexity in compliance with U.S. federal, state, and local laws.
• Dependence on technology for loan processing; failure to meet processing times could adversely affect business.
• CEO's involvement in side letter with SB Northstar could divert attention and negatively impact personal financial situation.
• Multiple class common stock structure may limit influence of Class A shareholders on corporate matters.
• Evolving data protection and privacy laws requiring ongoing compliance, monitoring, and audits.
• Laws and regulations governing internet sales and marketing may impact business operations and growth.
• Potential adverse effects from failure to comply with telecommunications, data protection, and consumer protection laws.
• Increased costs and regulatory requirements as a public company may impact financial compliance and governance.
• Failure to obtain approval from New York state regulators could negatively impact business operations.