33 unchanged sentences
Consumer traffic to our websites and the volume of quote requests generated by consumer traffic varies and can decline from to time.
−Removed: For example, quote requests decreased from 3,457,000 in the three months ended March 31, 2018 to 3,018,000 in the three months ended June 30, 2018, increased to 3,044,000 in the three months ended September 30, 2018, increased to 3,284,000 in the three months ended December 31, 2018, increased to 4,113,000 in the three months ended March 31, 2019, increased to 4,519,000 in the three months ended June 30, 2019, increased to 5,516,000 in the three months ended September 30, 2019 and increased to 5,863,000 in the three months ended December 31, 2019.
−Removed: Quote requests increased to 7,392,000 in the three months ended March 31, 2020, decreased to 6,777,000 in the three months ended June 30, 2020 and decreased to 6,291,000 in the three months ended September 30, 2020.
+Added: For example, quote requests increased to 4,113,000 in the three months ended March 31, 2019, increased to 4,519,000 in the three months ended June 30, 2019, increased to 5,516,000 in the three months ended September 30, 2019 and increased to 5,863,000 in the three months ended December 31, 2019.
+Added: Quote requests increased to 7,392,000 in the three months ended March 31, 2020, decreased to 6,777,000 in the three months ended June 30, 2020 decreased to 6,291,000 in the three months ended September 30, 2020 and increased to 6,553,000 in the three months ended December 31, 2020.
+Added: Quote requests increased to 7,720,000 in the three months ended March 31, 2021.
Additionally, even if we are successful in generating traffic to our websites, we may not be able to convert these visits into consumer quote requests.
17 unchanged sentences
We are also unsure what additional actions our carrier and agent customers, as well as our users, may take in response to coronavirus (COVID-19).
−Removed: For example, as carriers and agents shifted their workforces from offices to remote locations, we saw a decrease in demand while they relocated these operations.
In addition, we are unable to predict how user behavior will change in response to COVID-19.
−Removed: example, we believe that since shelter-in-place
−Removed: orders went into effect that consumers are performing less searches for insurance online.
+Added: example, we believe that immediately after shelter-in-place
+Added: orders went into effect consumers performed less searches for insurance online.
The degree to which COVID-19 impacts
15 unchanged sentences
If our current insurance provider customers reduce or end their advertising spending with us and we are unable to increase the spending of our other insurance provider customers or attract new insurance provider customers, our revenue and business and financial results would be materially adversely affected.
−Removed: In addition, insurance provider advertising spend remains concentrated in traditional offline media channels.
−Removed: Some of our current or potential insurance provider customers have little or no experience using the internet for advertising and marketing purposes and have allocated only limited portions of their advertising and marketing budgets to the internet.
−Removed: The adoption of online marketing may require a cultural shift among insurance providers as well as their acceptance of a new way of conducting business, exchanging information and evaluating new advertising and marketing technologies and services.
−Removed: This shift may not happen at all or at the rate we expect, in which case our business could suffer.
Furthermore, we cannot assure you that the market for online marketing services will continue to grow.
7 unchanged sentences
our ability to launch new vertical offerings that are effective and have a high degree of consumer and insurance provider engagement;
−Removed: our ability to maintain the compatibility of our mobile applications with operating systems, such as iOS and Android, and with popular mobile devices running such operating systems;
our ability to access a sufficient amount of data to enable us to provide relevant quotes to consumers.
If the use of our marketplace declines or does not continue to grow, our business and operating results would be harmed.
−Removed: We rely on the data provided to us by consumers and insurance providers to improve our product and service offerings, and if we are unable to maintain or grow such data we may be unable to provide consumers with a shopping experience that is relevant, efficient and effective, which could adversely affect our business.
−Removed: Our business relies on the data provided to us by consumers and insurance providers using our marketplace.
−Removed: The large amount of information we use in operating our marketplace is critical to the insurance shopping experience we provide for consumers.
−Removed: If we are unable to maintain or grow the data provided to us, the value that we provide to consumers and insurance providers using our marketplace may be limited.
−Removed: In addition, the quality, accuracy and timeliness of this information may suffer, which may lead to a negative shopping experience for consumers using our marketplace and could materially adversely affect our business and financial results.
A significant portion of our revenue in recent periods was derived from one customer, and our results of operations could be adversely affected and stockholder value harmed if we lose business from this customer.
−Removed: Sales to Progressive Casualty Insurance Company accounted for 21% of our revenue for the year ended December 31, 2019 and 23% of our revenue for the nine months ended September 30, 2020.
−Removed: In addition, sales to Government Employees Insurance Company accounted for just under 10% of revenue for the year ended December 31, 2019.
−Removed: These customers made purchases from us under short-term agreements and may decrease or cease doing business with us at any time with no notice.
−Removed: As a result, we have no assurances that these customers will continue to purchase from us at their historical levels or at all.
−Removed: If either or both of these customers were to reduce its level of purchases from us or discontinue its relationships with us, the loss could have a material adverse effect on our results of operations in both the short and long term.
−Removed: If our emails are not delivered and accepted or are routed by email providers less favorably than other emails, or if our sites are not accessible or treated disadvantageously by internet service providers, our business may be substantially harmed.
−Removed: If email providers or internet service providers, or ISPs, implement new or more restrictive email or content delivery or accessibility policies, including with respect to net neutrality, it may become more difficult to deliver emails to consumers or for consumers to access our websites and services.
+Added: Sales to Progressive Casualty Insurance Company accounted for 22% of our revenue for the year ended December 31, 2020 and 20% of our revenue for the three months ended March 31, 2021.
+Added: This customer made purchases from us under short-term agreements and may decrease or cease doing business with us at any time with no notice.
+Added: As a result, we have no assurances that this customer will continue to purchase from us at its historical levels or at all.
+Added: If this customer were to reduce its level of purchases from us or discontinue its relationships with us, the loss could have a material adverse effect on our results of operations in both the short and long term.
+Added: If our emails are not delivered and accepted or are routed by email providers less favorably than other emails our business may be substantially harmed.
+Added: If email providers implement new or more restrictive email or content delivery or accessibility policies it may become more difficult to deliver emails to consumers or for consumers to access our websites and services.
For example, certain email providers, including Google, may categorize our emails as “promotional,” and these emails may be directed to an alternate, and less readily accessible, section of a consumer’s inbox.
1 unchanged sentence
In addition, if we are placed on “spam” lists or lists of entities that have been involved in sending unwanted, unsolicited emails, our operating results and financial condition could be substantially harmed.
−Removed: Further, if ISPs prioritize or provide superior access to our competitors’ content, our business and results of operations may be adversely affected.
−Removed: Insurance providers who use our marketplace can offer products and services outside of our marketplace or obtain similar services from our competitors.
−Removed: Because we do not have exclusive relationships with insurance providers, consumers may obtain quotes and purchase insurance policies from them without having to use our marketplace.
−Removed: Insurance providers can attract consumers directly through their own marketing campaigns or other traditional methods of distribution, such as referral arrangements, physical storefront operations or broker agreements.
−Removed: Insurance providers also may offer quotes to prospective customers online directly, through one or more online competitors of our business, or both.
−Removed: If our insurance provider customers determine to compete directly with us or choose to favor one or more of our competitors, they could cease providing us with quote information and terminate any direct interactions we have with their online workflows, customers relationship management systems and internal quoting platforms, which would reduce the breadth of the quoting information available to us and could put us at a competitive disadvantage against their direct marketing efforts or our competitors that retain such access.
−Removed: If consumers seek insurance policies directly from insurance providers or through our competitors, or if insurance providers cease providing us with access to their systems or information, the number of consumers searching for insurance on our marketplace may decline, and our business, financial condition and results of operations could be materially adversely affected.
A significant portion of our revenue is derived from insurance providers acquiring referrals on an auction basis.
10 unchanged sentences
Without an innovative marketplace and related product and service offerings, we may be unable to attract additional consumers or retain current consumers, which could adversely affect our ability to attract and retain insurance providers who want to participate in our marketplace, which could, in turn, harm our business and financial results.
−Removed: In addition, while we have historically concentrated our efforts on the automobile insurance market, we will need to penetrate additional vertical markets, such as home and renters, life, commercial and health insurance, in order to achieve our long-term growth goals.
+Added: In addition, while we have historically concentrated our efforts on the automobile insurance market, we will need to further penetrate additional vertical markets, such as home and renters, life, commercial and health insurance, in order to achieve our long-term growth goals.
Our success in the automobile insurance market depends on our deep understanding of this industry.
6 unchanged sentences
A substantial majority of the insurance purchased through our marketplace is automobile insurance and our financial prospects depend significantly on the larger automotive industry ecosystem.
−Removed: Revenue from automotive insurance providers accounted for 85% of our total revenue for the year ended December 31, 2019 and 83% of our revenue for the nine months ended September 30, 2020.
+Added: Revenue from automotive insurance providers accounted for 81% of our total revenue for the three months ended March 31, 2021 and 82% of our revenue for the year ended December 31, 2020.
If insurance carriers experience large or unexpected losses through the offering of insurance, these carriers may choose to decrease the amount of money they spend with us.
1 unchanged sentence
For example, trends in the automotive industry, such as from the effects of ride sharing applications, including Uber and Lyft, distracted driving and autonomous driving technologies, have the potential to adversely affect automobile purchases and to decrease the demand for auto insurance.
−Removed: In addition, consumer purchases of new and used automobiles generally decline during recessionary periods and other periods in which disposable income is adversely affected and may be affected by negative trends in the broader economy, including the COVID-19
−Removed: pandemic, the cost of energy and gasoline, the availability and cost of credit, reductions in business and consumer confidence, stock market volatility and increased unemployment.
−Removed: We are also dependent upon the economic success of the home and renters, life, commercial and health insurance industries.
−Removed: Declines in demand for these insurance product offerings could cause fewer consumers to use our product offerings to shop for such policies.
−Removed: Downturns in any of these markets, which could be caused by a downturn in the economy at large, including as a result of the COVID-19
−Removed: pandemic, could materially adversely affect our business.
We depend on third-party publishers, including strategic partners, for a significant portion of our visitors.
5 unchanged sentences
If a third-party publisher decides not to make its media channel or inventory available to us or decides to demand a higher cost for such inventory, we may not be able to find media inventory from other websites that satisfies our requirements in a timely and cost-effective manner.
−Removed: Consolidation of internet advertising networks and third-party publishers could eventually lead to a
−Removed: concentration of desirable inventory on websites or networks owned by a small number of individuals or entities, which could limit the supply or impact the pricing of inventory available to us.
+Added: Consolidation of internet advertising networks and third-party publishers could eventually lead to a concentration of desirable inventory on websites or networks owned by a small number of individuals or entities, which could limit the supply or impact the pricing of inventory available to us.
Additionally, third-party publishers may use advertising creatives that do not meet our compliance guidelines or that of our insurance provider customers, which could result in loss of revenue and reputational harm.
6 unchanged sentences
As a result, we are required to spend considerable money and other resources to create brand awareness and build our reputation.
−Removed: Should the need or competition for top-of-mind
−Removed: awareness and brand preference increase, we may not be able to build brand awareness, and our efforts at building, maintaining and enhancing our reputation could fail.
+Added: Should the need or competition for top-of-mind awareness
+Added: and brand preference increase, we may not be able to build brand awareness, and our efforts at building, maintaining and enhancing our reputation could fail.
Even if we are successful in our branding efforts, such efforts may not be cost-effective.
8 unchanged sentences
If our insurance provider customers do not perceive our metrics to be accurate, or if we discover material inaccuracies in our metrics, it could adversely affect our online marketing efforts and business.
−Removed: In addition, we plan to expand our marketing efforts in offline channels such as television and radio.
+Added: In addition, we plan to further expand our marketing efforts in offline channels such as television and radio.
We face significant competition in marketing on offline channels, including from competitors and insurance carriers who may have significantly greater resources and brand recognition than we do.
If we fail to expand our marketing efforts in offline channels or to market ourselves successfully on such channels, we may not experience increases in consumer traffic and increased referral and advertising revenue necessary to grow our business, which could have a material adverse effect on our results of operations and financial results.
−Removed: If we fail to manage future growth effectively, our business could be materially adversely affected.
−Removed: We have at times experienced rapid growth and anticipate further growth.
−Removed: This growth has placed significant demands on management and our operational infrastructure.
−Removed: As we continue to grow, we must effectively integrate, develop and motivate a large number of new employees, while maintaining the beneficial aspects of our company culture.
−Removed: If we do not manage the growth of our business and operations effectively, the quality of our services and efficiency of our operations could suffer and we may not be able to execute on our business plan, which could harm our brand, results of operations and overall business.
Failure to increase our revenue or reduce our sales and marketing expense as a percentage of revenue would adversely affect our financial condition and profitability.
13 unchanged sentences
To the extent that insurance providers view alternative marketing and media strategies to be superior to our marketplace, we may not be able to maintain or grow the number of insurance providers using, and advertising on, our marketplace, and our business and financial results may be harmed.
−Removed: We also expect that new competitors will enter the online insurance industry with competing marketplaces, products and services, which could have an adverse effect on our business and financial results.
Our competitors could significantly impede our ability to maintain or expand the number of consumers and insurance providers using our marketplace.
10 unchanged sentences
We have limited experience, and may not be successful, in acquiring consumers from offline sources.
−Removed: We recently began to acquire consumers through limited offline sources, including inbound calls from consumers.
+Added: We recently began to acquire consumers through limited offline sources, including television advertisements, direct mail and inbound calls from consumers.
We may not succeed in advertising and acquiring consumers to these channels and may incur substantial costs without corresponding benefit.
4 unchanged sentences
Additionally, any failure by us or third parties in our verified partner network on which we rely for quote requests to adhere to or successfully implement appropriate processes and procedures in response to existing regulations and changing regulatory requirements could result in legal and monetary liability, significant fines and penalties, or damage to our reputation in the marketplace, any of which could have a material adverse effect on our business, financial condition, and results of operations.
−Removed: Insurance providers on our marketplace may not provide competitive levels of service to consumers, which could materially adversely affect our brand and business and our ability to attract consumers.
−Removed: Our ability to provide consumers with a high-quality and compelling insurance shopping experience depends, in part, on consumers receiving competitive prices, convenience, customer service and responsiveness from insurance providers with whom they are matched on our marketplace.
−Removed: If these providers do not meet or exceed consumer expectations with competitive levels of convenience, customer service, price and responsiveness, the value of our brand may be harmed, our ability to attract consumers to our marketplace may be limited and the number of consumers matched through our marketplace may decline, which could have a material adverse effect on our business, financial condition and results of operations.
A significant portion of the agents in our marketplace are affiliated with a limited number of insurance carriers.
5 unchanged sentences
We use emails to attract consumers to our marketplace.
−Removed: Our systems may not be adequately designed with the necessary reliability and redundancy to avoid performance delays or outages that could be prolonged and harmful to our business.
+Added: Our systems may not be
+Added: adequately designed with the necessary reliability and redundancy to avoid performance delays or outages that could be prolonged and harmful to our business.
If our websites are unavailable when users attempt to access them, or if they do not load as quickly as expected, users may not return as often in the future, or at all.
2 unchanged sentences
The operation of these systems is expensive and complex and we could experience operational failures.
−Removed: Interruptions, delays or failures in these systems, whether due to earthquakes, adverse weather conditions, other natural disasters, power loss, computer viruses, cybersecurity attacks, physical break-ins, terrorism, errors in our software or otherwise, could be prolonged and could affect the security or availability of our websites and applications, and prevent consumers from accessing our services.
+Added: Interruptions, delays or failures in these systems, whether due to earthquakes, adverse weather conditions, other natural disasters, power loss, computer viruses, cybersecurity attacks, physical break-ins, terrorism, errors
+Added: in our software or otherwise, could be prolonged and could affect the security or availability of our websites and applications, and prevent consumers from accessing our services.
Such interruptions also could result in third parties accessing our confidential and proprietary information, including our intellectual property or consumer information.
4 unchanged sentences
In addition, we do not own or control the operation of these facilities.
−Removed: Our systems and operations are vulnerable to damage or interruption from fire, flood, power loss, telecommunications failure, terrorist attacks, acts of war, electronic and physical break-ins, computer viruses, earthquakes and similar events.
+Added: Our systems and operations are vulnerable to damage or interruption from fire, flood, power loss, telecommunications failure, terrorist attacks, acts of war, electronic and physical break-ins, computer
+Added: viruses, earthquakes and similar events.
The occurrence of any of these events could result in damage to our systems and hardware or could cause them to fail.
6 unchanged sentences
Although we carry business interruption insurance, it may not be sufficient to compensate us for the potentially significant losses, including the potential harm to the future growth of our business that may result from interruptions in our service as a result of system failures.
−Removed: We rely on third-party service providers for many aspects of our business, and any failure to maintain these relationships could harm our business.
−Removed: Our success will depend upon our relationships with third parties, including those with our payment processor, our data center host, our customer relationship manager software provider and our general ledger provider.
−Removed: If these third parties experience difficulty meeting our requirements or standards, or if the license agreements we have entered into with such third parties are terminated or not renewed, it could make it difficult for us to operate some aspects of our business, which could damage our business and reputation.
−Removed: In addition, if such third-party service providers were to cease operations, temporarily or permanently, face financial distress or other business disruptions, or increase their fees, or if our relationships with these providers deteriorate, we could suffer increased costs and delays in our ability to provide consumers with content or provide similar services until an equivalent provider could be found or we could develop replacement technology or operations.
−Removed: In addition, if we are unsuccessful in identifying or finding high-quality partners, if we fail to negotiate cost-effective relationships with them or if we ineffectively manage these relationships, it could adversely affect our business and financial results.
−Removed: Consumer adoption of call blocking technology may reduce our ability to call our consumers as well as decrease the value of our data referrals.
+Added: Consumer adoption of call blocking technology, or restrictions placed by telephone carriers and communication platforms, may reduce our ability to call or text message our consumers, which could significantly decrease the number of quote requests and value of our data referrals and substantially harm our business.
Increased adoption of call blocking technology may prevent us from reaching our consumers that have expressed an interest in getting insurance information.
−Removed: If calls or messages to our consumers are blocked, or if insurance providers obtaining data referrals have their calls blocked due to these call blocking technologies, we may see a significant decrease in the value of our referrals and the number of data and call referrals we are able to sell to insurance providers which could materially adversely impact our business.
+Added: Additionally, telephone carriers and communication platforms may themselves place restrictions on our ability to call or send text messages to our consumers.
+Added: If calls or text messages to our consumers are blocked, or if insurance providers obtaining data referrals have their calls or text messages blocked due to these call blocking technologies or restrictions, we may see a significant decrease in quote requests, the value of our referrals and the number of data and call referrals we are able to sell to insurance providers which could materially adversely impact our business.
We depend on key personnel to operate our business, and if we are unable to retain, attract and integrate qualified personnel, our ability to develop and successfully grow our business could be harmed.
10 unchanged sentences
If we do not succeed in attracting well-qualified employees or retaining and motivating existing employees, our business could be materially adversely affected.
−Removed: We are subject to risks associated with a corporate culture that promotes entrepreneurialism and decentralized decision making.
−Removed: We have delegated considerable operational autonomy and responsibility to our employees, including by having flexible working hours.
−Removed: In addition, a central tenet of our culture is providing our employees with opportunities to grow, accept new challenges and take on new responsibilities.
−Removed: As a consequence, we may have relatively inexperienced people in key positions, and we routinely rotate experienced employees to other jobs within our company.
−Removed: In addition, the autonomy we provide to our employees could result in poor decision making, which could have a material adverse effect on our business, results of operations, financial condition and prospects.
If we are unable to successfully respond to changes in the market, our business could be harmed.
16 unchanged sentences
Fluctuations and variability across these different verticals may affect our revenue.
−Removed: As a result of the potential variations in our revenue and results of operations, period-to-period comparisons may not be meaningful and the results of any one period should not be relied on as an indication of future performance.
+Added: As a result of the potential variations in our revenue and results of operations, period-to-period comparisons may
+Added: not be meaningful and the results of any one period should not be relied on as an indication of future performance.
In addition, our results of operations may not meet the expectations of investors or public market analysts who follow us, which may adversely affect our stock price.
Our past growth may not be indicative of our future growth, and our revenue growth rate may decline in the future.
−Removed: Our revenue grew from $96.8 million in 2015 to $122.8 million in 2016, to $126.2 million in 2017, to $163.3 million in 2018 and to $248.8 million in 2019, increases of 26.8%, 2.8%, 29.4% and 52.3%, respectively.
−Removed: Our revenue grew from $67.1 million for the three months ended September 30, 2019 to $90.0 million for the three months ended September 30, 2020 and from $175.0 million for the nine months ended September 30, 2019 to $250.0 million for the nine months ended September 30, 2020, increases of 34.1% and 42.6%, respectively.
+Added: Our revenue grew from $96.8 million in 2015 to $122.8 million in 2016, to $126.2 million in 2017, to $163.3 million in 2018, to $248.8 million in 2019 and to $346.9 million in 2020, increases of 26.8%, 2.8%, 29.4%, 52.3% and 39.4%, respectively, and from $81.4 million for the three months ended March 31, 2020 to $103.8 million for the three months ended March 31, 2021, an increase of 27.6%.
This growth may not be indicative of our future growth, if any, and we will not be able to grow as expected, or at all, if we do not accomplish the following:
6 unchanged sentences
Our dedication to making decisions based primarily on the best interests of our company and stockholders may cause us to forgo short-term gains in pursuit of potential but uncertain long-term growth.
−Removed: Our guiding principle is to build our business by making decisions based primarily upon the best interests of our entire marketplace, including consumers and insurance providers, which we believe has been essential to our success in increasing our user growth rate and engagement and best serves the long-term interests of our company and our stockholders.
+Added: Our guiding principle is to build our business by making decisions based primarily upon the best interests of our entire marketplace, including consumers and insurance providers, which we believe has been essential to our success in increasing our user
+Added: growth rate and engagement and best serves the long-term interests of our company and our stockholders.
In the past, we have forgone, and we will in the future continue to forgo, certain expansion or short-term revenue opportunities that we do not believe are in the best interests of our marketplace and its users, even if such decisions adversely affect our results of operations in the short term.
4 unchanged sentences
While we use encryption and authentication technology licensed from third parties designed to effect secure transmission of such information, we cannot guarantee the security of the transfer and storage of the personal information we collect from customers.
−Removed: Like all information systems and technology, our websites, mobile applications and information systems, as well as those of our third-party partners and service providers, may be subject to computer viruses, break-ins, phishing
−Removed: impersonation attacks, attempts to overload our servers with denial-of-service or
−Removed: other attacks, ransomware and similar incidents or disruptions from unauthorized use of our computer systems, as well as unintentional incidents causing data leakage, any of which could lead to interruptions, delays or website shutdowns, or could cause loss of critical data or the unauthorized disclosure, access, acquisition, alteration or use of personal or other confidential information.
+Added: Cybersecurity risks have significantly increased in recent years, in part, because of the proliferation of new technologies, the use of the internet and telecommunications technologies to exchange information and conduct transactions, and the increased sophistication and activities of computer hackers, organized crime, terrorists, and other external parties, including foreign state actors.
+Added: We have been subject to, and are likely to continue to be the target of, future cyberattacks.
+Added: These cyberattacks could include computer viruses, malicious or destructive code, phishing attacks, denial of service or information, improper access by employees or third-party partners or other security breaches that have or could in the future result in the unauthorized release, gathering, monitoring, misuse, loss or destruction of our confidential, proprietary and other information, confidential and other information concerning employees or consumers, or otherwise materially disrupt our or our other third party partners’ network access or business operations.
Although we have a chief information officer who coordinates our cybersecurity measures, policies and procedures, and our chief information officer regularly reports to our board of directors regarding these matters, we cannot be certain that our efforts, as well as those of our third party partners and service providers, will be able to prevent breaches of the security of our information systems and technology.
9 unchanged sentences
Any failure or perceived failure by us to comply with our privacy policies, our privacy-related obligations to consumers or other third parties, or our privacy-related legal obligations, or any compromise of security that results in the unauthorized release or transfer of sensitive information, which could include personally identifiable information or other user data, may result in governmental investigations, enforcement actions, regulatory fines, litigation or public statements against us by consumer advocacy groups or others, and could cause consumers and insurance providers to lose trust in us, all of which could be costly and have an adverse effect on our business.
−Removed: In addition, new and changed rules and regulations regarding privacy, data protection and cross-border transfers of consumer information could cause us to delay planned uses and disclosures of data to comply with applicable privacy and data protection requirements.
+Added: addition, new and changed rules and regulations regarding privacy, data protection and cross-border transfers of consumer information could cause us to delay planned uses and disclosures of data to comply with applicable privacy and data protection requirements.
Moreover, if third parties that we work with violate applicable laws or our policies, such violations also may put consumer or insurance provider information at risk and could in turn harm our reputation, business and operating results.
−Removed: We may be unable to halt the operations of websites that aggregate or misappropriate our data.
−Removed: From time to time, third parties may misappropriate our data through website scraping, robots or other means and aggregate this data on their websites with data from other companies.
−Removed: In addition, copycat websites may misappropriate data in our marketplace and attempt to imitate our brand or the functionality of our website.
−Removed: If we become aware of such websites, we intend to employ technological or legal measures in an attempt to halt their operations.
−Removed: However, we may be unable to detect all such websites in a timely manner and, even if we could, technological and legal measures may be insufficient to halt their operations.
−Removed: In some cases, particularly in the case of websites operating outside of the United States, our available remedies may not be adequate to protect us against the effect of the operation of such websites.
−Removed: Regardless of whether we can successfully enforce our rights against the operators of these websites, any measures that we may take could require us to expend significant financial or other resources, which could harm our business, results of operations or financial condition.
−Removed: In addition, to the extent that such activity creates confusion among consumers or advertisers, our brand and business could be harmed.
We are subject to a number of risks related to the credit card and debit card payments we accept.
5 unchanged sentences
In addition, if these systems fail to work properly and, as a result, we do not charge our customers’ credit cards on a timely basis or at all, our business, revenue, results of operations and financial condition could be harmed.
−Removed: The payment methods that we offer also subject us to potential fraud and theft by criminals, who are becoming increasingly more sophisticated, seeking to obtain unauthorized access to or exploit weaknesses that may exist in the payment systems.
−Removed: If we fail to comply with applicable rules or requirements for the payment methods we accept, or if payment-related data are compromised due to a breach of data, we may be liable for significant costs incurred by payment card issuing banks and other third parties or subject to fines and higher transaction fees, or our ability to accept or facilitate certain types of payments may be impaired.
−Removed: In addition, our customers could lose confidence in certain payment types, which may result in a shift to other payment types or potential changes to our payment systems that may result in higher costs.
−Removed: If we fail to adequately control fraudulent credit card transactions, we may face civil liability, diminished public perception of our security measures, and significantly higher credit card-related costs, each of which could harm our business, results of operations and financial condition.
We are also subject to payment card association operating rules, certification requirements and rules governing electronic funds transfers, which could change or be reinterpreted to make it more difficult for us to comply.
3 unchanged sentences
Further, there is no guarantee that such compliance will prevent illegal or improper use of our payment systems or the theft, loss or misuse of data pertaining to credit and debit cards, card holders and transactions.
−Removed: If we are unable to maintain our chargeback rate or refund rates at acceptable levels, our processing vendor may increase our transaction fees or terminate its relationship with us.
−Removed: Any increases in our credit and debit card fees could harm our results of operations, particularly if we elect not to raise our rates for our service to offset the increase.
−Removed: The termination of our ability to process payments on any major credit or debit card would significantly impair our ability to operate our business.
We may acquire other companies or technologies, which could divert our management’s attention, result in additional dilution to our stockholders and otherwise disrupt our operations and harm our operating results.
17 unchanged sentences
Also, the anticipated benefits of any acquisitions may not be realized.
−Removed: If the goodwill that we record in connection with a business acquisition becomes impaired, it could require charges to earnings, which would have a negative impact on our business, operating results, financial condition and prospects.
−Removed: Goodwill represents the amount by which the purchase price exceeds the fair value of net assets we acquire in a business combination.
−Removed: In connection with our acquisition of Crosspointe Insurance & Financial Services LLC, we recorded goodwill that we will review for impairment at least annually, or more frequently if events or changes in circumstances indicate the carrying value of the asset might be impaired.
−Removed: Our future evaluations of goodwill may result in findings of impairment and related impairment losses, which could have a material and adverse effect on our business, operating results, financial condition and prospects.
−Removed: We use third-party contractor insurance agents to sell insurance for our direct to consumer agency.
+Added: We use third-party contractor insurance agents to sell insurance for our direct-to-consumer
These agents could take actions that could harm our business.
−Removed: We contract licensed insurance agents to sell insurance in connection with our direct to consumer agency.
+Added: We contract licensed insurance agents to sell insurance in connection with our direct-to-consumer
These agents are independent contractors and, as such, are not our employees, and we do not exercise control over their day-to-day
11 unchanged sentences
Litigation could distract management, increase our expenses or subject us to material money damages and other remedies.
−Removed: We are subject to two class action lawsuits alleging violations of the telephone consumer protection act, or TCPA, and were subject to a class action lawsuit alleging federal securities law violations in connection with our IPO, and may be involved from time to time in various additional legal proceedings, including, but not limited to, actions relating to breach of contract, breach of federal and state privacy laws, and intellectual property infringement that might necessitate changes to our business or operations.
+Added: We were previously subject to class action lawsuits alleging violations of the Telephone Consumer Protection Act, or TCPA, and were subject to a class action lawsuit alleging federal securities law violations in connection with our IPO, and may be involved from time to time in various additional legal proceedings, including, but not limited to, actions relating to breach of contract, breach of federal and state privacy laws, and intellectual property infringement that might necessitate changes to our business or operations.
Regardless of whether any claims against us have merit, or whether we are ultimately held liable or subject to payment of damages, claims may be expensive to defend and may divert management’s time away from our operations.
1 unchanged sentence
Any adverse publicity resulting from actual or potential litigation may also materially and adversely affect our reputation, which in turn could adversely affect our results.
−Removed: We conduct marketing activities, directly and indirectly, via telephone, text messages, email and/or through other online and offline marketing channels, which general marketing activities are governed by numerous federal and state regulations, such as the Telemarketing Sales Rule, state telemarketing laws, federal and state privacy laws, the Controlling the Assault of Non-Solicited Pornography and Marketing Act of 2003, or CAN-SPAM Act, the TCPA, and the Federal Trade Commission Act and its accompanying regulations and guidelines, among others.
+Added: We conduct marketing activities, directly and indirectly, via telephone, text messages, email and/or through other online and offline marketing channels, which general marketing activities are governed by numerous federal and state regulations, such as the Telemarketing Sales Rule, state telemarketing laws, federal and state privacy laws, the Controlling the Assault of Non-Solicited Pornography and
+Added: Marketing Act of 2003, or CAN-SPAM Act, the
+Added: TCPA, and the Federal Trade Commission Act and its accompanying regulations and guidelines, among others.
In addition to being subject to action by regulatory agencies, some of these laws, like the TCPA, allow private individuals to bring litigation against companies for breach of these laws, and we have received complaints from individuals that we have violated the TCPA.
−Removed: We are also dependent on our third-party partners to comply with applicable laws.
−Removed: For example, with the commencement of our verified partner network in 2019, we depend upon our third-party partners to obtain consent from consumers to receive telemarking calls in compliance with the TCPA.
−Removed: We may be alleged to have indemnification obligations to third-party partners for alleged breaches of privacy laws like the TCPA, which could increase our defense costs and require that we pay damages if there were an adverse ruling in any such claims.
+Added: We are also dependent on our third-party vendors to comply with applicable laws.
+Added: For example, with the commencement of our verified partner network in 2019, we depend upon these third-party vendors to obtain consent from consumers to receive telemarking calls in compliance with the TCPA.
+Added: We may be alleged to have indemnification obligations to third-party customers for alleged breaches of privacy laws like the TCPA, which could increase our defense costs and require that we pay damages if there were an adverse ruling in any such claims.
Any of these events may have a material adverse effect on our business, results of operations, financial condition and prospects.
Companies in the internet, technology and media industries are frequently subject to allegations of infringement or other violations of intellectual property rights.
−Removed: As we grow our business and expand our operations we may become subject to intellectual property claims by third parties.
+Added: We have been and may continue to become subject to intellectual property claims by third
We plan to vigorously defend our intellectual property rights and our freedom to operate our business;
4 unchanged sentences
Any of these events may have a material adverse effect on our business, results of operations, financial condition and prospects.
+Added: We may become subject to enforcement actions or litigation as a result of our failure to comply with laws and regulations, even though noncompliance was inadvertent or unintentional.
+Added: We maintain systems and procedures designed to ensure that we comply with applicable laws and regulations;
+Added: however, some legal and regulatory frameworks provide for the imposition of fines or penalties for noncompliance even though the noncompliance was inadvertent or unintentional and even though there were systems and procedures designed to ensure compliance in place at the time.
+Added: For example, we engage in outbound telephone and text communications with consumers, and accordingly must comply with a number of statutes and regulations, including the TCPA and Telemarketing Sales Rules, that govern those communications and the use of automatic telephone dialing systems, or ATDS, and artificial or pre-recorded
+Added: voice messages.
+Added: Federal Communications Commission (the “FCC”), and the U.S.
+Added: Federal Trade Commission (the “FTC”) have responsibility for regulating various aspects of these laws.
+Added: Among other requirements, the TCPA requires us to obtain prior express written consent for certain telemarketing calls.
+Added: Many states have similar consumer protection laws regulating telemarketing.
+Added: These laws limit our ability to communicate with consumers and reduce the effectiveness of our marketing programs.
+Added: The TCPA does not currently distinguish between voice and data, and, as such, SMS/MMS messages are also “calls” for the purpose of TCPA obligations and restrictions.
+Added: For violations of the TCPA, the law provides for a private right of action under which a plaintiff may recover monetary damages of $500 for each call or text made in violation of the prohibitions on calls made using an “artificial or pre-recorded
+Added: voice” or an ATDS.
+Added: A court may treble the amount of damages upon a finding of a “willful or knowing” violation.
+Added: There is no statutory cap on maximum aggregate exposure.
+Added: An action may be brought by the FCC, a state attorney general, an individual, or a class of individuals.
+Added: Like other companies that rely on telephone and text communications, we have been and may be subject to future putative class action suits alleging violations of the TCPA.
+Added: If in the future we are found to have violated the TCPA, the amount of damages and potential liability could be extensive and adversely impact our business.
+Added: Accordingly, were such a class certified or if we are unable to successfully defend such a suit, then TCPA damages could have a material adverse effect on our results of operations and financial condition.
Any future indebtedness could adversely affect our ability to operate our business.
17 unchanged sentences
Our business depends on our intellectual property, the protection of which is crucial to the success of our business.
−Removed: We rely on a combination of patent, trademark, trade secret and copyright law and contractual restrictions to protect our intellectual property.
+Added: We rely on a combination of trademark, trade secret and copyright law and contractual restrictions to protect our intellectual property.
In addition, we attempt to protect our intellectual property, technology and confidential information by requiring our employees and consultants to enter into confidentiality and assignment of inventions agreements and third parties to enter into nondisclosure agreements as we deem appropriate.
13 unchanged sentences
The regulation of domain names in the United States is subject to change.
−Removed: Regulatory bodies could establish additional top-level domains, appoint additional domain name registrars, or modify the requirements for holding domain names.
+Added: Regulatory bodies could establish additional top-level domains, appoint
+Added: additional domain name registrars, or modify the requirements for holding domain names.
As a result, we may not be able to acquire or maintain all domain names that use the name EverQuote.
2 unchanged sentences
We may in the future be subject to intellectual property disputes, which are costly to defend and could harm our business and operating results.
−Removed: We may from time to time face allegations or claims that we have infringed the trademarks, copyrights, patents and other intellectual property rights of third parties, including from our competitors or non-practicing entities.
+Added: From time to time we have faced and may continue to face allegations or claims that we have infringed the trademarks, copyrights, patents and other intellectual property rights of third parties, including from our competitors or non-practicing entities.
claims, regardless of their merit, could result in litigation or other proceedings and could require us to expend significant financial resources and attention by our management and other personnel that otherwise would be focused on our business operations, result in injunctions against us that prevent us from using material intellectual property rights, or require us to pay damages to third parties.
30 unchanged sentences
We also generate a significant amount of revenue from calls made by our internal call centers as well as, in some cases, by third-party publishers’ call centers.
−Removed: We also purchase a portion of our lead data from third-party publishers and cannot guarantee that these third parties will comply with regulations.
−Removed: Any failure by us or the third-party publishers on which we rely for telemarketing, email marketing, and other lead generation activities to adhere to or successfully implement appropriate processes and procedures in response to existing regulations and changing regulatory requirements could result in legal and monetary liability, significant fines and penalties, or damage to our reputation in the marketplace, any of which could have a material adverse effect on our business, financial condition, and results of operations.
+Added: We also purchase a portion of our lead data from third-party vendors.
+Added: These third-party vendors are outside contractors and we do not exercise control over their business or day-to-day
+Added: operations and cannot guarantee that these third parties will comply with regulations.
+Added: Any failure by us or the third-party vendors on which we rely for telemarketing, email marketing, and other lead generation activities to adhere to or successfully implement appropriate processes and procedures in response to existing regulations and changing regulatory requirements could result in legal and monetary liability, significant fines and penalties, or damage to our reputation in the marketplace, any of which could have a material adverse effect on our business, financial condition, and results of operations.
In addition, there is increasing attention by state and other jurisdictions to regulation in this area.
15 unchanged sentences
The CCPA may have a substantial negative impact on our business activities and increase our compliance costs and potential liability.
−Removed: There also is a pending referendum in California that also may expand privacy obligations beyond CCPA.
+Added: Additionally, effective starting on January 1, 2023, the California Privacy Rights Act, or the CPRA, will significantly modify the CCPA, including by expanding consumers’ rights with respect to certain sensitive personal information.
+Added: The CPRA also creates a new state agency that will be vested with authority to implement and enforce the CCPA and the CPRA.
Many similar privacy laws have been proposed at the federal level and in other states.
18 unchanged sentences
licensing companies and agents to transact business and authorizing lines of business;
−Removed: and regulating unfair trade and claims practices, including through the imposition of restrictions on marketing and sales practices, distribution arrangements and payment of inducements.
+Added: and regulating unfair trade and claims practices, including through the imposition of restrictions on marketing and sales practices, distribution
+Added: arrangements and payment of inducements.
In some cases, these insurance and other laws and regulations may impose operational limitations on our business, including on the products and services we may offer or on the amount or type of compensation we may collect.
13 unchanged sentences
Sales, use, value added and similar tax laws and rates vary greatly by jurisdiction.
−Removed: Certain jurisdictions in which we do not collect such taxes may assert that such taxes are applicable, which could result in tax assessments, penalties and interest, to us or our end-customers for the past amounts, and we may be required to collect such taxes in the future.
−Removed: If we are unsuccessful in collecting such taxes from our end-customers, we could be held liable for such costs.
+Added: Certain jurisdictions in which we do not collect such taxes may assert that such taxes are applicable, which could result in tax assessments, penalties and interest, to us or our end-customers for the
+Added: past amounts, and we may be required to collect such taxes in the future.
+Added: If we are unsuccessful in collecting such taxes from our end-customers, we could
+Added: be held liable for such costs.
Such tax assessments, penalties and interest, or future requirements may adversely affect our operating results.
13 unchanged sentences
Alleged failure to comply with obligations and restrictions related to telephone, text message and email marketing could subject us to lawsuits, fines, statutory damages, consent decrees, injunctions, adverse publicity and other losses that could harm our business.
−Removed: Moreover, over the past several years there has been a sustained increase in litigation alleging violations of laws relating to telemarketing, which has increased the exposure of companies that operate telephone and text messaging campaigns to class action litigation alleging violations of the TCPA.
+Added: Moreover, over the past several years there has been a significant amount of litigation alleging violations of laws relating to telemarketing, which has increased the exposure of companies that operate telephone and text messaging campaigns to class action litigation alleging violations of the TCPA.
If we, third parties we acquire quote requests from, or the insurance providers who use our marketplace become subject to such litigation, it could result in substantial costs to and materially adversely affect our business.
8 unchanged sentences
reduce our revenue, increase our operating expenses and expose us to significant liabilities.
−Removed: Risks from third-party products could adversely affect our businesses.
−Removed: We offer third-party products and we provide marketing services with respect to other insurance products.
−Removed: Insurance, by its nature, involves a transfer of risk.
−Removed: If risk is not transferred in the way the customer expects, our reputation may be harmed and we may become a target for litigation.
−Removed: In addition, if these products do not generate competitive risk-adjusted returns that satisfy clients in a variety of asset classes, we will have difficulty maintaining existing business and attracting new business.
−Removed: This risk may be heightened during periods when credit, equity or other financial markets are deteriorating in value or are particularly volatile, or when clients or investors are experiencing losses.
−Removed: Significant declines in the performance of these third-party products could subject us to reputational damage and litigation risk.
Risks Related to Our Class A Common Stock
4 unchanged sentences
The market price of our Class A common stock has been and could continue to be subject to significant fluctuations.
−Removed: For example, our Class A common stock traded within a range of a high price of $63.44 per share and a low price of $4.05 per share for the period beginning June 28, 2018, our first day of trading on the Nasdaq Global Market, through September 30, 2020.
+Added: For example, our Class A common stock traded within a range of a high price of $63.44 per share and a low price of $4.05 per share for the period beginning June 28, 2018, our first day of trading on the Nasdaq Global Market, through March 31, 2021.
Some of the factors that may cause the market price of our Class A common stock to fluctuate include:
3 unchanged sentences
announcements of new service offerings, strategic alliances or significant agreements by us or by our competitors;
−Removed: departure of key personnel;
+Added: loss of key personnel;
litigation involving us or that may be perceived as having an adverse effect on our business;
31 unchanged sentences
If one or more of these analysts cease to cover our Class A common stock, we could lose visibility in the market for our Class A common stock, which in turn could cause our stock price to decline.
−Removed: Because we do not expect to pay any dividends on our Class A common stock for the foreseeable future, investors may never receive a return on their investment.
−Removed: You should not rely on an investment in our Class A common stock to provide dividend income.
−Removed: We do not anticipate that we will pay any cash dividends to holders of our Class A common stock in the foreseeable future.
−Removed: Instead, we plan to retain any earnings to maintain and expand our existing operations.
−Removed: Accordingly, investors must rely on sales of their Class A common stock after price appreciation, which may never occur, as the only way to realize any return on their investment.
−Removed: As a result, investors seeking cash dividends should not purchase our Class A common stock.
−Removed: The dual-class structure of our common stock has the effect of concentrating voting control with the holders of our Class B common stock, including our directors, executive officers and Link Ventures and other significant stockholders, who collectively held in the aggregate approximately 80% of the voting power of our capital stock as of September 30, 2020;
+Added: The dual-class structure of our common stock has the effect of concentrating voting control with the holders of our Class B common stock, including our directors, executive officers and Link Ventures and other significant stockholders, who collectively held in the aggregate approximately 77% of the voting power of our capital stock as of March 31, 2021;
and Link Ventures, directly or through a voting agreement, together with Cogo Labs, held approximately 77% of the voting power of our capital stock as of that date.
1 unchanged sentence
Our Class B common stock has 10 votes per share, and our Class A common stock has one vote per share.
−Removed: Our directors, executive officers and holders of more than 10% of our common stock, and their respective affiliates, held in the aggregate approximately 80% of the voting power of our capital stock as of September 30, 2020;
+Added: Our directors, executive officers and holders of more than 10% of our common stock, and their respective affiliates, held in the aggregate approximately 77% of the voting power of our capital stock as of March 31, 2021;
and Link Ventures, directly or through a voting
−Removed: agreement pursuant to which each of Seth Birnbaum and Tomas Revesz have agreed to vote on all matters presented to our stockholders all voting capital stock held by them in the manner directed by Link Ventures, together with Cogo Labs, held in the aggregate approximately 80% of the voting power of our capital stock as of that date.
−Removed: Because of the 10-to-one voting ratio between our Class B and Class A common stock, the holders of our Class B common stock collectively will continue to control a majority of the combined voting power of our common stock and therefore be able to control all matters submitted to our stockholders for approval.
+Added: agreement pursuant to which each of Seth Birnbaum, through his heirs and estate, and Tomas Revesz have agreed to vote on all matters presented to our stockholders all voting capital stock held by them in the manner directed by Link Ventures, together with Cogo Labs, held in the aggregate approximately 77% of the voting power of our capital stock as of that date.
+Added: Because of the 10-to-one voting ratio
+Added: between our Class B and Class A common stock, the holders of our Class B common stock collectively will continue to control a majority of the combined voting power of our common stock and therefore be able to control all matters submitted to our stockholders for approval.
This concentration of voting power will limit or preclude your ability to influence corporate matters for the foreseeable future, including the election of directors, amendments of our organizational documents, and any merger, consolidation, sale of all or substantially all of our assets, or other major corporate transaction requiring stockholder approval.
This may also prevent or discourage unsolicited acquisition proposals or offers for our capital stock that you may feel are in your best interest as one of our stockholders.
−Removed: In addition, major stock index providers, such as FTSE Russell and S&P Dow Jones, exclude from their indices non-voting securities or the securities of companies with unequal voting rights.
+Added: In addition, major stock index providers, such as FTSE Russell and S&P Dow Jones, exclude from their indices non-voting securities or
+Added: the securities of companies with unequal voting rights.
Exclusion from stock indices could make it more difficult, or impossible, for some fund managers to buy our Class A common stock, particularly in the case of index tracking mutual funds and exchange traded funds, which could adversely affect the trading liquidity and market price of our Class A common stock.
16 unchanged sentences
These sales, or the market perception that the holders of a large number of shares intend to sell shares, could reduce the market price of our Class A common stock.
−Removed: In addition to our outstanding Class A common stock, as of September 30, 2020, there were 1,413,961 shares of Class A common stock subject to outstanding options, 1,359,261 shares of either Class A common stock or Class B common stock subject to outstanding options, 3,646,253 shares of Class A common stock subject to outstanding restricted stock unit awards, or RSUs, and an additional 432,095 shares of Class A common stock reserved for future issuance under our equity incentive plan.
+Added: In addition to our outstanding Class A common stock, as of March 31, 2021, there were 982,788 shares of Class A common stock subject to outstanding options, 982,397 shares of either Class A common stock or Class B common stock subject to outstanding options, 2,842,867 shares of Class A common stock subject to outstanding restricted stock unit awards, or RSUs, and an additional 2,414,810 shares of Class A common stock reserved for future issuance under our equity incentive plan.
Because we have registered 14,088,187 shares of our Class A common stock and Class B common stock that may be issued under our equity incentive plans pursuant to registration statements on Form S-8, any such
shares that we issue can be freely sold in the public market upon issuance, subject to the restrictions imposed on our affiliates under Rule 144.
−Removed: Moreover, holders of a significant number of shares of our Class A common stock and Class B common stock as of September 30, 2020, have rights, subject to certain conditions, to require us to file registration statements covering their shares or to include their shares in registration statements that we may file for ourselves or other stockholders.
+Added: Moreover, holders of a significant number of shares of our Class A common stock and Class B common stock as of March 31, 2021, have rights, subject to certain conditions, to require us to file registration statements covering their shares or to include their shares in registration statements that we may file for ourselves or other stockholders.
Upon registration, such shares would be able to be freely sold in the public market.
21 unchanged sentences
Neither of these choice of forum provisions would affect suits brought to enforce any liability or duty created by the Securities Exchange Act of 1934, as amended, or the Exchange Act, or the rules and regulations thereunder, jurisdiction over which is exclusively vested by statute in U.S.
−Removed: federal courts, or any other claim for which U.S.
+Added: federal courts,
+Added: or any other claim for which U.S.
federal courts have exclusive jurisdiction.
−Removed: These choice of forum provisions may limit a
−Removed: stockholder’s ability to bring a claim in a judicial forum that it finds favorable for disputes with us or our directors, officers or other employees, which may discourage such lawsuits against us and our directors, officers and other employees.
+Added: These choice of forum provisions may limit a stockholder’s ability to bring a claim in a judicial forum that it finds favorable for disputes with us or our directors, officers or other employees, which may discourage such lawsuits against us and our directors, officers and other employees.
Alternatively, if a court were to find the choice of forum provisions contained in our certificate of incorporation to be inapplicable or unenforceable in an action, we may incur additional costs associated with resolving such action in other jurisdictions, which could materially adversely affect our business, financial condition and operating results.
−Removed: Our management team has limited experience managing a public company.
−Removed: Most members of our management team have limited experience managing a publicly traded company, interacting with public company investors and complying with the increasingly complex laws pertaining to public companies.
−Removed: Our management team may not successfully or efficiently manage being a public company subject to significant regulatory oversight and reporting obligations under the federal securities laws and the scrutiny of securities analysts and investors.
−Removed: These new obligations and constituents require significant attention from our management team and can divert their attention away from the day-to-day management of
−Removed: our business, which could materially adversely affect our business, financial condition and operating results.
The requirements of being a public company may strain our resources, divert management’s attention and affect our ability to attract and retain qualified board members.
As a public company, we are subject to the reporting requirements of the Exchange Act, the listing requirements of the Nasdaq Stock Market and other applicable securities rules and regulations.
−Removed: Compliance with these rules and regulations will increase our legal and financial compliance costs, make some activities more difficult, time-consuming or costly, and increase demand on our systems and resources, particularly as of December 31, 2020, when we are no longer an emerging growth company or a smaller reporting company.
+Added: Compliance with these rules and regulations will increase our legal and financial compliance costs, make some activities more difficult, time-consuming or costly, and increase demand on our systems and resources, particularly as we are no longer an emerging growth company.
Among other things, the Exchange Act requires that we file annual, quarterly and current reports with respect to our business and operating results and maintain effective disclosure controls and procedures and internal control over financial reporting.
2 unchanged sentences
Although we have already hired additional employees to comply with these requirements, we may need to hire even more employees in the future, which will increase our costs and expenses.
−Removed: We are currently evaluating our internal controls, identifying and remediating any deficiencies in those internal controls and documenting the results of our evaluation, testing and remediation.
−Removed: We may not be able to complete our evaluation, testing and any required remediation in a timely fashion.
−Removed: During the evaluation and testing process, if we identify one or more material weaknesses in our internal control over financial reporting that we are unable to remediate before the end of the same fiscal year in which the material weakness is identified, we will be unable to assert that our internal controls are effective.
−Removed: If we are unable to assert that our internal control over financial reporting is effective, or if our auditors are unable to attest to management’s report on the effectiveness of our internal controls, which will be required as of December 31, 2020, when we are no longer an emerging growth company or a smaller reporting company, we could lose investor confidence in the accuracy and completeness of our financial reports, which would cause the price of our Class A common stock to decline.
−Removed: In addition, changing laws, regulations and standards relating to corporate governance and public disclosure are creating uncertainty for public companies, increasing legal and financial compliance costs and making some activities more time-consuming.
−Removed: These laws, regulations, and standards are subject to varying interpretations, in many cases due to their lack of specificity, and, as a result, their application in practice may evolve over time as new guidance is provided by regulatory and governing bodies.
−Removed: This could result in continuing uncertainty regarding compliance matters and higher costs necessitated by ongoing revisions to disclosure and governance practices.
−Removed: We intend to invest resources to comply with evolving laws, regulations and standards, and this investment may result in increased general and administrative expense and a diversion of management’s time and attention from revenue-generating activities to compliance activities.
−Removed: If our efforts to comply with new laws, regulations and standards differ from the activities intended by regulatory or governing bodies, regulatory authorities may initiate legal proceedings against us and our business may be harmed.
As a result of being a public company, it is more expensive for us to obtain director and officer liability insurance than when we were a private company, and in the future we may be required to accept reduced coverage or incur substantially higher costs to obtain coverage.
These factors could also make it more difficult for us to attract and retain qualified members of our board of directors, particularly to serve on our audit committee, and qualified executive officers.
−Removed: Failure to establish and maintain effective internal controls in accordance with Section 404 of the Sarbanes-Oxley Act could have a material adverse effect on our business and stock price.
−Removed: As a public company, we are required to comply with the rules of the Securities and Exchange Commission, or SEC, implementing Section 404 of the Sarbanes-Oxley Act of 2002, or the Sarbanes-Oxley Act, which requires management to certify financial and other information in our quarterly and annual reports and provide an annual management report on the effectiveness of controls over financial reporting.
−Removed: As an emerging growth company and a smaller reporting company, our independent registered public accounting firm will not be required to formally attest to the effectiveness of our internal control over financial reporting pursuant to Section 404 until December 31, 2020, when we are no longer an emerging growth company or a smaller reporting company.
−Removed: At such time, our independent registered public accounting firm may issue a report that is adverse in the event it is not satisfied with the level at which our controls are documented, designed or operating.
−Removed: To comply with the requirements of being a public company, we have undertaken various actions, and may need to take additional actions, such as implementing new internal controls and procedures and hiring additional accounting or internal audit staff.
−Removed: Testing and maintaining internal control can divert our management’s attention from other matters that are important to the operation of our business.
−Removed: In addition, when evaluating our internal control over financial reporting, we may identify material weaknesses that we may not be able to remediate in time to meet the applicable deadline imposed upon us for compliance with the requirements of Section 404.
−Removed: If we identify any material weaknesses in our internal control over financial reporting or are unable to comply with the requirements of Section 404 in a timely manner or assert that our internal control over financial reporting is effective, or if our independent registered public accounting firm is unable to express an opinion as to the effectiveness of our internal control over financial reporting once we are no longer an emerging growth company or a smaller reporting company as of December 31, 2020, investors may lose confidence in the accuracy and completeness of our financial reports and the market price of our Class A common stock could be materially adversely affected, and we could become subject to investigations by the stock exchange on which our securities are listed, the SEC or other regulatory authorities, which could require additional financial and management resources.
−Removed: We are an “emerging growth company” and a “smaller reporting company,” and the reduced disclosure requirements applicable to emerging growth companies and smaller reporting companies may make our Class A common stock less attractive to investors.
−Removed: We are an “emerging growth company,” as defined in the Jumpstart Our Business Startups Act of 2012, or the JOBS Act and a “smaller reporting company” under SEC rules, and will remain an emerging growth company and a smaller reporting company until we become a large accelerated filer as of December 31, 2020.
−Removed: As an emerging growth company, we relied on exemptions from certain disclosure requirements that are applicable to other public companies that are not emerging growth companies.
−Removed: These exemptions include reduced disclosure obligations regarding executive compensation and exemptions from the requirements to hold non-binding advisory votes
−Removed: on executive compensation and golden parachute payments, not being required to comply with the auditor attestation requirements of Section 404 of the Sarbanes-Oxley Act and not being required to comply with certain requirements of Auditing Standard 3101 relating to providing a supplement to the auditor’s report regarding critical audit matters.
−Removed: We expect to continue to take advantages of some or all of the available exemptions until we cease to be an emerging growth company and a smaller reporting company as of December 31, 2020.
−Removed: We cannot predict whether investors will find our Class A common stock less attractive if we rely on these exemptions.
−Removed: If some investors find our Class A common stock less attractive as a result, there may be a less active trading market for our Class A common stock and our stock price may be more volatile.
−Removed: In addition, the JOBS Act provides that an emerging growth company can take advantage of an extended transition period for complying with new or revised accounting standards.
−Removed: This allows an emerging growth company to delay the adoption of certain accounting standards until those standards would otherwise apply to private companies.
−Removed: We have elected to avail ourselves of this exemption from new or revised accounting standards and, therefore, while we are an emerging growth company we will not be subject to new or revised accounting standards at the same time that they become applicable to other public companies that are not emerging growth companies.
−Removed: Accordingly, we will incur additional costs in connection with complying with the accounting standards applicable to public companies at such time or times as they become applicable to us.
−Removed: Changes in accounting standards and subjective assumptions, estimates and judgments by management related to complex accounting matters could significantly affect our financial condition and results of operations.
−Removed: Accounting principles and related pronouncements, implementation guidelines and interpretations we apply to a wide range of matters that are relevant to our business, including, but not limited to, revenue recognition, stock-based compensation, the redemption value of our redeemable convertible preferred stock, income taxes and capitalization of web-site development costs
−Removed: are complex and involve subjective assumptions, estimates and judgments by our management.
−Removed: Changes in these accounting pronouncements or their interpretation or changes in underlying assumptions, estimates or judgments by our management could significantly change our reported or expected financial performance.
−Removed: Our reported financial results may be adversely affected by changes in accounting principles generally accepted in the United States.
−Removed: Accounting principles generally accepted in the United States are subject to interpretation by the Financial Accounting Standards Board, the SEC, and various bodies formed to promulgate and interpret appropriate accounting principles.
−Removed: A change in these principles or interpretations could have a significant effect on our reported financial results, and could affect the reporting of transactions completed before the announcement of a change.
+Added: We are obligated to maintain a system of effective internal control over financial reporting and any failure to maintain the adequacy of these internal controls may harm investor confidence in our company and, as a result, the value of our common stock.
+Added: The Sarbanes-Oxley Act of 2002 requires that we maintain effective internal control over financial reporting and disclosure controls and procedures.
+Added: We are required, pursuant to Section 404 of the Sarbanes-Oxley Act, to furnish a report by management on, among other things, the effectiveness of our internal control over financial reporting.
+Added: This assessment includes disclosure of any material weaknesses identified by our management in our internal control over financial reporting.
+Added: Our compliance with Section 404 necessitates that we incur substantial accounting expense and expend significant management efforts.
+Added: We will continue to dedicate internal resources, engage outside consultants and adopt a detailed work plan to assess and document the adequacy of internal control over financial reporting, continue steps to improve control processes as appropriate, validate through testing that controls are functioning as documented and implement a continuous reporting and improvement process for internal control over financial reporting and to compile the system and process documentation necessary to perform the evaluation needed to comply with Section 404.
+Added: However, we cannot assure you that our independent registered public accounting firm will be able to attest to the effectiveness of our internal control over financial reporting.
+Added: We may not be able to remediate any material weaknesses that may be identified, or to complete our evaluation, testing and any required remediation in a timely fashion and our independent registered public accounting firm may issue a report that is adverse in the event it is not satisfied with the level at which our controls are documented, designed or operating.
+Added: Any failure to maintain adequate internal control over financial reporting could severely inhibit our ability to accurately report our financial condition or results of operations.
+Added: If we are unable to assert that our internal control over financial reporting is effective, or if our auditors are unable to express an opinion on the effectiveness of our internal control when they are required to issue such opinion, investors could lose confidence in the accuracy and completeness of our financial reports, the market price of our Class A common stock could decline, and we could be subject to sanctions or investigations by the Nasdaq Stock Market, the SEC or other regulatory authorities.
+Added: Failure to remedy any material weakness in our internal control over financial reporting, or to implement or maintain other effective control systems required of public companies, could also restrict our future access to the capital markets.
Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.