Risk Factors Update Summary

• The company's net losses increased significantly from $22.2 million in 2021 to $51.8 million in 2023.
• A small number of stockholders now have substantial control over the Company, potentially impacting decisions.
• Efforts to hack or circumvent security measures could impact information systems. Security events may not be immediately understood.
• Increased reliance on cloud-based services and remote access to information systems increases exposure to potential cybersecurity incidents.
• The accumulated deficit rose from $285.8 million as of December 31, 2023.
• Debt financing may involve restrictive covenants, making it difficult to obtain additional capital for operations.
• Theft of data could adversely impact sales, reputation, and result in legal and regulatory consequences.
• The Tax Receivable Agreement could result in excess payments due, potentially impacting financial obligations.
• The company experienced significant leadership changes, appointing new CFO in March 2023 and CEO in September 2023.
• Failure to comply with data protection laws, such as GDPR and CPRA, could lead to penalties.
• The company may incur additional costs due to workforce reduction and restructuring efforts.
• Compromises in the security of information systems could lead to operational interruptions and litigation.
• Cybersecurity incidents could result in negative publicity, affecting brand reputation and financial condition.
• The company's revenue growth is dependent on retaining existing members and adding new members.
• The company faces challenges in managing its lease expenses due to fixed monthly payments.
• Open-source licenses may expose proprietary software, allowing competitors to replicate offerings.
• The company may face difficulties in adapting its technology platform to meet member expectations.
• Changes in tax laws could increase tax liabilities, impacting financial results and profitability.