Risk Factors Update Summary

• Net losses decreased from $153.9 million to $107.3 million in 2022, and accumulated deficit increased from $612 million to $719 million.
• Full-time employee headcount grew significantly from 230 to 1,678 between May 2016 and December 2022.
• Added details on intellectual property risks, including potential confusion from third parties using similar marks.
• Revenue mix shifted with Enterprise segment revenue increasing from 36% to 58% in 2023.
• Revenue outside North America decreased from 61% to 50% in 2022.
• Increased effective tax rate due to new taxes, such as the 1% excise tax on stock repurchases.
• Expansion of instructor relationships from more than 70,000 to 75,000 by 2023.
• Strategic partnership with McLaren Racing to boost brand awareness among fans.
• Loss of "emerging growth company" status requires additional management attention and compliance efforts.
• Increased focus on generative AI to enhance instructor capabilities and learning experiences.
• Potential impact on gross margins due to 29% of sales denominated in foreign currencies.
• Share repurchase program authorized for up to $100 million may affect stock price and cash reserves.
• Exclusive forum provisions may limit stockholders' ability to bring lawsuits against the company.