What changed in this filing

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Item 1A. Risk Factors

2023-02-23 compared with 2022-03-24 · 75 added, 84 removed, 605 unchanged (21% of the section changed)

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• Failure to maintain our reputation and brand recognition and attract and engage users in a cost-effective manner would harm our business, financial condition and results of operations.

• Use of social media, influencers, affiliate marketing, email and text messages may adversely impact our brand and reputation or subject us to fines or other penalties.

• We may make decisions based on the best interests of our users in order to build long-term trust that may result in us forgoing short-term gains.

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These new efforts are inherently risky, and we may never realize any expected benefits from them.

• The COVID-19 pandemic has negatively impacted our business and our business recovery will depend on future developments, which are uncertain and cannot be predicted, including the scope and duration of the pandemic and actions taken by governmental authorities in response to the pandemic.

• Adverse conditions in the consumer finance markets, or poor or uncertain macroeconomic conditions, could harm our business, financial condition and results of operations.

• Trends in the credit card industry, as well as the impact of the general economy on the ability of users to qualify for credit cards, could harm our business, financial condition and results of operations.

• Our financial performance is dependent on our ability to successfully refer users to financial services partners, and these partners are not precluded from offering products and services outside of our platform.

• Macroeconomic developments such as inflationary conditions in the U.S.

have caused macroeconomic uncertainty and may have an adverse impact on our business, results of operations l and our vertical diversification strategy.

• Adverse conditions in the consumer finance markets, or poor or uncertain macroeconomic conditions, could harm our business, financial condition and results of operations if our financial services partners reduce their marketing budgets and decrease spending on our platform.

• Changes in the loans markets could harm our business, financial condition and results of operations.

• Our business is subject to a variety of U.S.

financial regulations, many of which are overlapping, ambiguous and still developing, which could subject us to claims or otherwise harm our business.

• Our business is subject to a variety of financial regulations in the U.S., UK, Canada and Australia, many of which are overlapping, ambiguous and still developing, which could subject us to claims or otherwise harm our business.

• Security incidents, or real or perceived errors, failures or bugs in our systems and platform could impair our operations, compromise our confidential information or our users’ personal information, damage our reputation and brand, and harm our business and operating results.

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• we lose users to new market entrants and/or existing competitors;

• we do not obtain regulatory approvals necessary for expansion into new verticals, geographies or to launch new product features and tools;

• we do not obtain regulatory approvals necessary for expansion into new verticals, geographies or to launch new products, product features or tools;

• we fail to effectively use search engines, social media platforms, digital app stores, content-based online advertising, and other online sources for generating traffic to our platform;

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We have experienced declines in traffic and user growth as a result of these changes in the past, and anticipate fluctuations as a result of such actions in the future.

The introduction of AI-assisted technologies may impact the relevance of search engines and also result in declines in our search engine ranking, leading to decreased traffic to our platform, which may impact our financial results if we are not able to adapt our content strategy to a changing web search landscape.

In addition, Google may take action against websites for behavior that it believes unfairly influences search results.

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Furthermore, adverse publicity, from legal proceedings against us or our business, including governmental proceedings and consumer class action or other litigation, or the disclosure of information from security breaches or other incidents, could negatively impact our reputation and our brand, which could materially and adversely affect our business and financial condition and results of operations.

In addition, the actions of our third-party marketing partners who engage in advertising on our behalf could negatively impact our reputation and our various brands.

The failure of our business to maintain or enhance its reputation and brand recognition and attract and retain consumers in a cost-effective manner could materially and adversely affect our business, financial condition and results of operations.

Use of social media, influencers, affiliate marketing, email, and text messages may adversely impact our brand and reputation or subject us to fines or other penalties.

We use social media, including Facebook, Instagram and TikTok, as well as affiliate marketing, email, and SMS as part of our multi-channel approach to marketing.

Laws and regulations governing the use of these platforms and other digital marketing channels are rapidly evolving.

An increase in the use of social media for product promotion and marketing may cause an increase in the burden on us to monitor compliance of such materials and increase the risk that such materials could contain problematic product or marketing claims in violation of applicable regulations.

It may also become more difficult for us or our affiliate marketing partners to comply with such laws, and future data privacy laws and regulations or industry standards may restrict or limit our ability to use some or all of the marketing strategies on which we currently rely.

The failure by us, our employees, third parties acting at our direction or affiliate marketing partners who engage in advertising on our behalf to abide by applicable laws and regulations in the use of these platforms could adversely impact our reputation or subject us to fines or other penalties.

In addition, our employees or third parties, including our affiliate marketing partners, may knowingly or inadvertently make use of social media in ways that could lead to violations of marketing regulations issued by the FTC, SEC or CFPB.

Any such inappropriate use of social media tools could also cause business interruptions and reputational damage.

We may make decisions based on the best interests of our users in order to build long-term trust that may result in us forgoing short-term gains.

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(doing business as Know Your Money), an online provider of financial guidance and tools based in the UK.

We entered the Canadian market organically in the third quarter of 2021.

We entered the Canadian and Australian markets organically in the third quarter of 2021 and the fourth quarter of 2022, respectively.

We believe our growth strategy depends, in part, on our continued international expansion.

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anti-competition regulations;

regulatory laws and requirements for licenses and authorizations;

and the UK Bribery Act of 2010 and other anti-corruption laws;

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federal laws and regulations established by the office of Foreign Asset Control and other governmental entities;

• difficulties identifying, obtaining, and maintaining the government approvals or licensures required to conduct our business in foreign markets;

• difficulties identifying, obtaining, and maintaining the government approvals, authorizations, or licensures required to conduct our business in foreign markets;

• financial risks, such as longer payment cycles, difficulty collecting accounts receivable, and the impact of local and regional financial crises on demand and payment for our products;

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As we continue to expand our international operations, our success will depend in large part on our ability to anticipate and effectively manage these risks, which in turn will require significant management attention and financial resources.

In addition, certain international markets are subject to significant political and economic uncertainty.

Significant political and economic developments in international markets where we intend to operate, or the perception that any of them could occur, creates further challenges for operating in these markets.

In addition, certain international markets where we do business, such as the UK are subject to significant economic uncertainty.

Significant economic developments in the UK, or the perception that any of them could occur, creates further challenges for operating in this market.

If we are unable to successfully manage any of these risks, our existing international operations and any future international expansion could be compromised, which could harm our business, financial condition and results of operations.

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We expect to increase our investments in these new initiatives in the near term which may result in lower margins.

Additionally, following our acquisition of Fundera in 2020, we plan to invest significant resources to integrate, develop and expand new offerings and technologies in SMB markets.

Additionally, following our acquisition of On the Barrelhead (OTB) in the third quarter of 2022, we plan to invest significant resources to integrate, develop and expand new offerings using our newly acquired technology.

We also expect to spend substantial amounts as we seek to grow the verticals in which we operate our platform and increase our scale, and to expand our offerings to additional geographic markets.

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Our new initiatives also have a high degree of risk, as each involves strategies, technologies and regulatory requirements with which we have limited or no prior development or operating experience.

There can be no assurance that consumer demand for such initiatives will exist or be sustained at the levels that we anticipate, or that any of these initiatives will gain sufficient traction or market acceptance to generate sufficient revenue to offset any new expenses or liabilities associated with these new investments.

There can be no assurance that consumer demand for such initiatives will exist or be sustained at the levels that we anticipate, or that any of these initiatives will gain sufficient traction or

market acceptance to generate sufficient revenue to offset any new expenses or liabilities associated with these new investments.

It is also possible that product offerings developed by others will render our product offerings noncompetitive or obsolete.

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economy could harm our business and financial results.

In connection with our acquisition of Know Your Money (KYM), we entered the UK market, and we believe our growth strategy depends, in part, on our continued international expansion.

As we expand in the UK and internationally, we will be vulnerable to economic downturns or other conditions that affect the economy in the UK and in other countries where we expand.

However, until our international operations expand significantly, we will continue to be primarily dependent on U.S.

We have entered the UK, Canadian and Australian markets, and we believe our growth strategy depends, in part, on our continued international expansion.

As we expand internationally, we will be vulnerable to economic downturns or other conditions that affect the domestic markets in the countries where we expand.

However, until our international operations grow significantly, we will continue to be primarily dependent on U.S.

consumers and U.S.

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• Offerings by current and future competitors;

• Our ability to innovate and disrupt markets by offering or creating new and compelling products for consumers;

• Our ability to attract and retain management and other skilled personnel;

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Risks Related to Our Industry and the Consumer Finance Economy

The COVID-19 pandemic has negatively impacted our business and our business recovery will depend on future developments, which are uncertain and cannot be predicted, including the scope and duration of the pandemic and actions taken by governmental authorities in response to the pandemic.

The COVID-19 pandemic has negatively impacted the global economy and led to temporary closures of businesses and increased unemployment.

In addition, the institution of social distancing and sheltering in place has adversely impacted the travel sector which has, in turn, reduced interest in credit cards that have travel-related benefits.

The unstable socioeconomic backdrop has impacted consumer finances and caused some financial services providers to tighten underwriting standards.

Consumer demand in our verticals has been and may continue to be significantly impacted as new variants of the coronavirus lead to increased hospitalizations and other disruptions to daily life.

Demand from our financial services partners may also impact our business if they make changes to their customer acquisition efforts with us in response to macroeconomic uncertainty.

In addition, regulatory responses to the COVID-19 pandemic such as student loan forbearance may also impact our business.

The extent to which the COVID-19 pandemic will continue to impact our business, financial condition and results of operations depends on future developments, which are highly uncertain and cannot be predicted, including vaccine distribution, vaccine acceptance, the emergence additional coronavirus variants, the scope and duration of the pandemic and actions taken by governmental authorities and other third parties in response to the pandemic.

Adverse conditions in the consumer finance markets, or poor or uncertain macroeconomic conditions, could harm our business, financial condition and results of operations.

Our business is dependent on the consumer finance markets and the demand for the products offered by our financial services partners.

Both our financial services partners and users may be affected by prevailing economic, political, market, health and social events or conditions.

A decline in these conditions could impact our users, and could reduce their demand for credit cards, mortgage loans, personal loans, and other financial service products, which could ultimately impact our revenues.

Similarly, during market downturns our financial services partners may tighten underwriting standards, implement cost-reduction initiatives that reduce or eliminate marketing budgets and decrease spending on our platform.

Any of these events could adversely affect our business, financial condition and results of operations.

Trends in the credit card industry, as well as the impact of the general economy on the ability of users to qualify for credit cards, could harm our business, financial condition and results of operations.

The credit card market is an important part of our business.

Our participation in this market is subject to particular risks, each of which could negatively affect our traffic and results of operations:

• Adverse conditions in the economy may affect credit card issuers and their willingness to issue new credit which would negatively affect revenue;

• Credit losses among credit card issuers may increase beyond normal and budgeted levels which could cause a reduction in credit card issuers’ ability to extend credit;

• Interest rate increases may make balance transfer cards less profitable for issuers, decreasing the fees we earn from matching users with such cards;

• Credit card issuers may be unwilling to partner with us;

• Lower approval rates by credit card issuers due to tighter underwriting or other factors;

• Decreases in consumer interest in credit card products;

• Increased competition;

• If we are unable to provide competitive service to credit card issuers and to consumers using our platform;

• If we are unable to develop new product offerings and enhance existing ones.

Macroeconomic developments such as inflationary conditions and a rising interest rate environment in the U.S.

have caused macroeconomic uncertainty and may have an adverse impact on our business, results of operations and our vertical diversification strategy.

We began our business with our credit card vertical and have since grown our business to include seven additional verticals:

mortgages, insurance, SMB products, personal loans, banking, investing and student loans.

We believe that our vertical diversification strategy has allowed us to navigate different kinds of macroeconomic conditions;

in the recent past underperformance in one vertical has been offset by overperformance in another.

For example, during the COVID-19 pandemic in 2020 when our credit card vertical was under pressure, other verticals such as the investing vertical and mortgage vertical were strong.

Similarly in 2022, as interest rates began to increase and the mortgage and investing verticals were impacted, the credit card and SMB verticals were strong.

We cannot, however, guarantee that this offsetting between our verticals will continue or that our business model will be able to withstand the various macroeconomic developments we may see in the future.

Continued inflationary conditions, higher interest rates, and a tightening of credit markets would pose challenges to our business and may impact many of our verticals and may not be offset by performance in other verticals.

Further, an unexpected or prolonged economic downturn, or rapidly rising or sustained high unemployment, would adversely affect our financial condition and results of operations.

Adverse conditions in the consumer finance markets, or poor or uncertain macroeconomic conditions, could harm our business, financial condition and results of operations if our financial services partners reduce their marketing budgets and decrease spending on our platform.

We earn fees from our financial services partners by matching users with their products.

Thus, our business is dependent on the consumer finance markets and the demand for the products offered by our financial services partners.

We have not experienced a prolonged economic downturn since our founding following the Great Recession, but we would expect a market downturn to lead our financial services partners to tighten underwriting standards making it more difficult for users to be matched with their products and to implement cost-reduction initiatives that reduce or eliminate marketing budgets.

Both of these actions would lead to decreased monetization on our platform and could adversely affect our business, financial condition and results of operations.

Changes in the loan markets could harm our business, financial condition and results of operations.

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Fluctuations and constraints in the loan markets in the past have harmed, and may in the future, harm our business, financial condition and results of operations.

Economic factors such as increased interest rates, slow economic growth or recessionary conditions, the pace of home price appreciation or the lack of it, changes in household debt levels, and increased unemployment or stagnant or declining wages can affect the loan markets.

National or global events, including but not limited to the COVID-19 pandemic, can also affect such macroeconomic conditions.

Such macroeconomic factors can affect the number of loan applications and loan approval rates which can adversely affect our business.

For example, increases in interest rates adversely affect the ability of our mortgage partners to close loans due to lower consumer demand, and adverse economic trends may limit the ability of our mortgage partners to offer home loans other than low-margin conforming loans.

Decreased consumer demand for mortgage refinancing typically leads to decreased traffic to our platform and results in higher associated marketing costs with generating traffic.

In the U.S., policymakers at the Federal Reserve have signaled that several interest rate increases will likely occur in 2022 in attempts to combat inflation.

These rate increases could result in lower consumer demand for personal loans, as well as student loans and mortgage refinancings and originations, and thus, could negatively impact our loans vertical.

In 2022 the U.S.

Federal Reserve increased the benchmark federal funds rate multiple times in an attempt to rein in inflation.

This policy change led to a softening of the housing market and reduced demand for mortgage refinancings and originations on our platform.

At the same time inflationary conditions in the U.S.

have led consumers to seek increased credit both in the form of credit cards and personal loans, but there may be changes to the risk appetite of our financial services partners as economic conditions become more uncertain or as they see higher rates of default from consumers.

A tightening of underwriting standards by our financial services partners could negatively impact our loans vertical by making it more difficult for us to find matches for their products.

In the student loan markets, a prolonged loan deferral program has negatively impacted our student loans vertical and a proposed loan forgiveness program by the Biden administration, if implemented, would continue to negatively impact our student loans vertical.

Risks Related to Regulation

Our business is subject to a variety of U.S.

financial regulations, many of which are overlapping, ambiguous and still developing, which could subject us to claims or otherwise harm our business.

Aspects of our business are subject to a variety of federal and state financial and other laws, including laws and state licensing requirements relating to matching consumers with financial services providers;

Our business is subject to a variety of financial regulations in the U.S., Canada, Australia, and the UK, many of which are overlapping, ambiguous and still developing, which could subject us to claims or otherwise harm our business.

Aspects of our business are subject to a variety of federal, state and provincial financial and other laws in the U.S., Canada, Australia and UK, including laws, authorizations, and state or provincial licensing requirements relating to matching consumers with financial services providers;

the marketing of mortgages, credit cards, personal loans, insurance, and other financial products and services;

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In addition, as our business grows into new markets or expands and we collect, use and share more user data internally and with financial services partners, we may become subject to additional laws and regulations.

We also anticipate that federal regulators relevant to our business, such as the Federal Trade Commission and the Consumer Financial Protection Bureau, may pursue more enforcement actions due to the recent change in the White House administration.

In addition, Congress, federal agencies, state legislatures and state regulators may from time to time enact new laws, regulations or guidance that may harm our business.

We also anticipate that U.S.

federal regulators relevant to our business, such as the Federal Trade Commission and the Consumer Financial Protection Bureau, may pursue more enforcement actions under a Democratic administration.

In addition, the government and regulatory authorities in the UK, Canada, Australia and U.S.

including the respective federal agencies, state and provincial legislatures and regulators may from time to time enact new laws, regulations or guidance that may harm our business.

If we are not able to comply with applicable financial and other laws or regulations or if we become liable under these laws or regulations, we could be directly harmed, and we may be forced to implement new measures to reduce our exposure to this liability.

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In addition, some states may require licenses to conduct similar activity with respect to commercial loans, credit cards and unsecured personal loans to residents of those states, although the applicability of these requirements to our business varies depending on our products as well as the loan products, terms, and the types of institutions that we partner with.

The UK, Canada, and Australia also have licensure requirements in order to solicit or offer qualitative assessments and comparison of certain financial products, such as loans secured by residential mortgages, consumer loans, credit cards, and insurance.

Compliance with these requirements may render it more difficult for us and our financial services partners to operate or may raise our internal costs or the costs of our financial services partners, which may be passed on to us through less favorable commercial arrangements.

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In addition, we or our employees may not be granted new licenses or rights for which they may be required to apply from time to time in the future.

Regulations promulgated by some states may also impose compliance obligations on directors, executive officers, and any person who acquires a certain percentage (for example, 10% or more) of the equity in a licensed entity, including requiring such persons to periodically file financial and other personal and business information with state regulators.

Regulations promulgated by some states or jurisdictions may also impose compliance obligations on directors, executive officers, and any person who acquires a certain percentage (for example, 10% or more) of the equity in a licensed entity, including requiring such persons to periodically file financial and other personal and business information with regulators.

If any such person refuses or fails to comply with these requirements, we may be unable to obtain certain licenses and existing licensing arrangements may be jeopardized.

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Our actual or perceived failure to comply with such obligations could harm our reputation and our business.

We collect, store, use and process personal information and other user data, including financial information, credit report information and other sensitive information for our Registered Users.

We collect, store, use and process personal information and other user data, including financial information, credit report information and other sensitive information for our users.

We rely on this data provided to us by users and third parties to offer, improve and innovate our products.

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Although UK privacy, data protection and data security laws are designed to be consistent with the EU’s GDPR, uncertainty remains regarding how privacy, data protection, information security and data transfers to and from the UK will be regulated notwithstanding Brexit.

For example, authorities in the UK may, like their EU counterparts, invalidate use of the EU-U.S.

Privacy Shield and raise questions on the viability of the European Commission’s Standard Contractual Clauses.

With substantial uncertainty over the interpretation and application of data transfer, privacy, data protection, and information security in the UK, we may face challenges in addressing their requirements and making necessary changes to our policies and practices, and may incur significant costs and expenses in an effort to do so.

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We may be unable to make acquisitions and investments, successfully integrate acquired companies into our business, or our acquisitions and investments may not meet our expectations, any of which could adversely affect our business, financial condition, and results of operations.

We acquired KYM and Fundera in the third and fourth quarters of 2020, respectively.

We do not have extensive experience acquiring and integrating other businesses and technologies and there are inherent risks in integrating the acquired personnel, operations and technologies and managing the combined business effectively following the acquisition.

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Acquisitions also increase the risk of unforeseen legal liability, including for potential violations of applicable law or industry rules and regulations, arising from prior or ongoing acts or omissions by the acquired businesses that are not discovered by due diligence during the acquisition process.

In addition, our acquisition agreements with KYM and Fundera contain earn-out provisions.

In addition, our acquisition agreements with KYM and Fundera, which we acquired in 2020, contain earn-out provisions.

Disputes over whether the earn-out targets have been met could lead to litigation, management distraction and significant expense.

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Any of the foregoing could adversely affect our business, financial condition, and results of operations.

Our acquisition agreements contain contingent consideration, the value of which may impact future operating results.

Our acquisition agreements include contingent earn-out consideration, the fair value of which was estimated as of the acquisition date based on the then-present value of the expected contingent payments as determined using weighted probabilities of possible future payments.

These fair value estimates contain unobservable inputs and estimates that could materially differ from the actual future results.

The fair value of the contingent earn-out consideration could increase or decrease, up to the contracted limit, as applicable.

Changes in the fair value of contingent earn-outs will be reflected in our results of operations in the period in which changes in value occur, the amount of which may be material and cause volatility in our operating results.

Expenses or liabilities resulting from litigation could materially adversely affect our results of operations and financial condition.

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If we fail to maintain proper and effective internal control over financial reporting, our ability to produce accurate and timely financial statements could be impaired, investors may lose confidence in our financial reporting and the trading price of our Class A common stock may decline.

Pursuant to Section 404 of the Sarbanes-Oxley Act, we will be required to furnish a report by our management on our internal control over financial reporting, including, after we become an accelerated or large accelerated filer, an attestation report on internal control over financial reporting issued by our independent registered public accounting firm.

However, while we remain a non-accelerated filer, we will not be required to include an attestation report on internal control over financial reporting issued by our independent registered public accounting firm.

Pursuant to Section 404 of the Sarbanes-Oxley Act, we are required to furnish a report by our management on our internal control over financial reporting, and after becoming an accelerated filer and once we no longer qualify as an emerging growth company, our independent registered public accounting firm will also be required to provide an attestation report on our internal control over financial reporting.

The rules governing the standards that must be met for management to assess our internal control over financial reporting are complex and require significant documentation, testing and possible remediation.

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and hire additional accounting and finance staff.

We are currently in the process of hiring additional accounting and finance staff as we grow our business.

If we are unable to hire the additional accounting and finance staff necessary to comply with these requirements, we may need to retain additional outside consultants.

If we or, if required, our auditors, are unable to conclude that our internal control over financial reporting is effective, investors may lose confidence in our financial reporting and the trading price of our Class A common stock may decline.

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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.

Sales of a substantial number of shares of our Class A common stock by our existing stockholders in the public market could cause our stock price to fall.

If our existing stockholders sell, or indicate an intention to sell, substantial amounts of our Class A common stock in the public market after the lock-up entered into in connection with our initial public offering and other legal restrictions on resale lapse, the trading price of our Class A common stock could decline.

As of December 31, 2021, we have outstanding 35.0 million shares of Class A common stock and 31.7 million shares of Class B common stock.

Of these shares, only the 8.3 million shares of Class A common stock sold in our initial public offering are freely tradable without restriction in the public market.

All of our executive officers and directors and the holders of substantially all the shares of our Class A common stock and securities convertible into or exchangeable for our Class A common stock have entered into market standoff agreements with us or have entered into lock-up agreements with the underwriters that restrict their ability to transfer shares of our Class A common stock and securities convertible into or exchangeable for our Class A common stock during the period ending on, and including, the 180th day after November 4, 2021.

Morgan Stanley & Co.

LLC and KeyBanc Capital Markets Inc.

may permit our stockholders who are subject to these lock-up agreements to sell shares prior to the expiration of the lock-up agreements.

All of the shares of Class A common stock will become eligible for sale upon expiration of the 180-day lock-up period.

Shares of Class A common stock that are either subject to outstanding options or restricted stock unit awards have been registered under Form S-8 and will become eligible for sale in the public market to the extent permitted by the provisions of various vesting schedules, the market standoff and lock-up agreements described above and Rule 144.

If these additional shares of Class A common stock are sold, or if it is perceived that they will be sold, in the public market, the trading price of our Class A common stock could decline.

Furthermore, holders of approximately 15.6 million shares of our capital stock are entitled to rights with respect to the registration of their shares under the Securities Act, subject to the lock-up agreements described above.

Registration of these shares under the Securities Act would result in the shares becoming freely tradable without restriction under the Securities Act.

Any sales of securities by these stockholders, or if it is perceived that they will sell, could cause the trading price of our Class A common stock to decline.

Sales of a substantial number of shares of our Class A common stock by our existing stockholders in the public market could cause our stock price to decline.

Substantially all of our shares of Class A common stock and Class B common stock are eligible for public sale, if they are registered under the Securities Act, or if they qualify for an exemption from registration under the Securities Act, including under Rules 144 or 701.

If our existing stockholders sell, or indicate an intention to sell, substantial amounts of our Class A common stock in the public market, the trading price of our Class A common stock could decline.

Certain holders of shares of our Class A common stock are entitled to rights with respect to the registration of their shares under the Securities Act as provided under the terms of an investors’ rights agreement between us and such stockholders.

Registration of these shares under the Securities Act would result in the shares becoming freely tradable without restriction under the Securities Act, except for shares held by affiliates, as defined in Rule 144 under the Securities Act.

Any sales of securities by these stockholders could have a material adverse effect on the trading price of our common stock.

We have registered on Form S-8 all shares of common stock that are issuable under our existing equity compensation plans, including our 2012 Equity Incentive Plan, our 2021 Equity Incentive Plan (2021 EIP) and our 2021 Employee Stock Purchase Plan (2021 ESPP).

Additionally, the number of shares of our Class A common stock reserved for issuance under our 2021 EIP automatically increases on January 1 of each year, beginning on January 1, 2023, by 5% of the total number of shares of our capital stock outstanding on December 31 of the preceding calendar year, or a lesser number of shares determined by our board of directors or compensation committee.

Furthermore, the number of shares of our Class A common stock reserved for issuance under our 2021 ESPP automatically increases on January 1 of each year, beginning on January 1, 2023, by the lesser of 1% of the total number of shares of our capital stock outstanding on December 31 of the preceding calendar year and 850,000 shares, or a lesser number of shares determined by our board of directors or compensation committee.

Unless our board of directors elects not to increase the number of shares available for future grant each year, our stockholders may experience additional dilution.

As a consequence, these shares can be freely sold in the public market upon issuance, subject to volume limitations applicable to affiliates.

If securities or industry analysts do not publish research or publish inaccurate or unfavorable research about our business, our stock price and trading volume could decline.

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While the Delaware courts have determined that such choice of forum provisions are facially valid, a stockholder may nevertheless seek to bring a claim in a venue other than those designated in the exclusive forum provisions.

In such instance, we would expect to vigorously assert the validity and enforceability of the exclusive forum provisions of our amended and restated certificate of incorporation.

In such an instance, we would expect to vigorously assert the validity and enforceability of the exclusive forum provisions of our amended and restated certificate of incorporation.

This may require significant additional costs associated with resolving such action in other jurisdictions and there can be no assurance that the provisions will be enforced by a court in those other jurisdictions.

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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.

What changed 10-K

Item 1A. Risk Factors