Risk Factors Update Summary

• Increased regulatory scrutiny and potential enforcement actions related to RESPA, TILA, and TCPA compliance. This could result in significant financial penalties and operational disruptions.
• Increased risk in renewing warehouse lines due to loan performance, access to secondary market, and reputational concerns.
• Increased focus on technology enhancements and product lines to remain competitive and improve customer experience.
• Qualifying as an "emerging growth company" and "smaller reporting company" impacts reporting exemptions.
• Increased interest rates led to a reduction in refinance market, impacting revenues significantly.
• Risks related to technology disruptions, failures, and cyberattacks could impact operations and reputation.
• 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 and increased costs.
• Increased reliance on management judgment for model adjustments may impact financial results significantly.
• The company may not maintain profitability achieved in 2020 and early 2021, with net losses of $301.1 million in 2021 and $888.8 million in 2022.
• Delaying adoption of new accounting standards until no longer an "emerging growth company."
• Failure to drive website traffic through marketing could lead to decreased traffic and increased costs.
• Higher interest rates negatively impact purchase mortgage loan business, reducing demand and increasing costs.
• Uncertainty in borrowing money due to elevated interest rates impacting financial markets.
• Revenue is derived almost entirely from mortgage loan production. Failure to predict demand could significantly impact financials.
• Non-compliance with minimum bid price requirement may lead to delisting from Nasdaq, limiting trading and increasing redemption risk for Convertible Note.
• The workforce was reduced by approximately 92% over a 24-month period, from 10,400 team members to 820.
• Acquisition of Birmingham Bank in the UK introduces compliance challenges and regulatory risks.
• Risks associated with open source software licenses could lead to limitations on software use, increased costs, and potential litigation. This change could significantly impact operations and financial condition.
• Significant legal and reputational risks related to privacy, use, and security of customer information.
• Failure to comply with underwriting guidelines could lead to penalties, loan repurchases, and reputational damage.
• Competition intensifies in mortgage and real estate markets, affecting pricing, loan programs, and customer service.
• Lack of independent underwriter review increases investment risk for shareholders.
• Regulatory focus on fair lending practices and potential penalties for discriminatory practices could lead to reputational damage and financial penalties.
• Adoption of SOFR as an index for variable-rate indebtedness could result in higher interest rates.
• Challenges to the Mortgage Electronic Registration System could delay foreclosure processes and increase costs.
• Expansion into new products and markets requires significant resources and may not be profitable.
• Material weaknesses in internal controls over financial reporting may result in misstatements.
• Compliance risks due to evolving laws and regulations, potential fines, and regulatory actions.
• Fannie Mae required the company to post $5.0 million in a designated money market fund due to a decline in profitability and net worth.
• Intellectual property risks include challenges to ownership, misappropriation, and infringement claims, potentially resulting in costly litigation. This change could impact the company's competitive position and financial health.
• Reliance on technology for loan processing and customer experience, failure to meet expectations could harm business.
• Evolving internet regulations may impact business operations and compliance costs, affecting online services and marketing strategies.
• Regulatory changes impacting search engines and social media platforms could reduce marketing effectiveness.
• Concentration of loans in specific states poses a risk if economic conditions worsen in those areas.
• Multiple class structure concentrating voting control with pre-merger stockholders may limit influence of Class A Common Stock holders.
• Litigation involving the CEO could divert resources and negatively affect business operations.
• Provisions in the Amended and Restated Charter and Bylaws could discourage changes in control or management, potentially depressing stock price.
• CEO's involvement in side letter with SB Northstar may divert attention and negatively impact personal finances.
• Business vulnerability to interest rate fluctuations may result in substantial volatility in financial performance.
• Increased costs and regulatory requirements as a public company may lead to higher compliance costs and operational complexities.