What changed in this filing

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Item 1A. Risk Factors

2025-02-26 compared with 2024-02-23 · 290 added, 208 removed, 535 unchanged (48% of the section changed)

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• If we fail to attract new customers and retain and increase the spending of existing customers, our revenue, business, results of operations, financial condition and growth prospects would be harmed.

• We have experienced rapid revenue growth in recent periods and our recent growth rates may not be indicative of our future growth.

• Our historical revenue growth rates may not be indicative of our future growth.

• Our platform and products are dependent on APIs built and owned by third parties, including social media networks, and if we lose access to data provided by such APIs or the terms and conditions on which we obtain such access become less favorable, our business could suffer.

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• If we fail to adapt and respond effectively to rapidly changing technology, new social media platforms, evolving industry standards or changing customer needs, requirements, tastes or preferences, our products may become less competitive.

• If we do not adequately fund our research and development efforts, or use research and development teams effectively, we may not be able to compete effectively, and our business and operating results may be harmed.

• As more of our sales efforts target larger enterprise customers, our sales cycle has and may continue to become longer and more expensive and we may encounter increased pricing pressure and compliance challenges.

• We recognize subscription revenue ratably over the term of our customer contracts.

Consequently, downturns or upturns in new sales may not be immediately reflected in our operating results and may be difficult to discern.

Risks Related to the Use of Technology

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and other adverse business consequences.

• If our information technology systems or data, or those of third parties upon which we rely, are or were compromised, we could experience adverse consequences, including but not limited to regulatory investigations or actions;

• If our information technology systems or data, or those of third parties with whom we work, are or were compromised, we could experience adverse consequences, including but not limited to regulatory investigations or actions;

fines and penalties;

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Risks Related to Ownership of Our Class A Common Stock

• Our actual operating results may fluctuate from period to period and may differ significantly from any guidance provided.

• Our share price has been and may continue to be volatile, and you could lose all or part of your investment.

• The dual class structure of our common stock and the existing ownership of capital stock by our Co-Founders have the effect of concentrating voting control with our Co-Founders for the foreseeable future, which will limit the ability of our other investors to influence corporate matters.

• The dual class structure of our common stock and the existing ownership of capital stock by our Co-Founders have the effect of concentrating voting control with our Co-Founders for the foreseeable future, which limits the ability of our other investors to influence corporate matters.

Risks Related to Tax and Accounting Matters

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General Risk Factors

• Unstable market and economic conditions, including a global or domestic recession or the fear of a recession, may have serious adverse consequences on our business, financial condition and share price.

• We may make acquisitions of, or invest in, other businesses or technologies, which may divert our management’s attention and result in the incurrence of indebtedness or dilution to our stockholders.

• Unstable market and economic conditions may have serious adverse consequences on our business, financial condition and share price.

• We may make acquisitions of, or invest in, other businesses or technologies, which may divert our management’s attention and result in the incurrence of indebtedness or dilution to our

stockholders.

We may be unable to integrate acquired businesses or technologies successfully or achieve the expected benefits of such acquisitions and investments.

• We may not be able to generate sufficient cash to service our indebtedness, and may be forced to take other actions to satisfy our obligations under our indebtedness, which may not be successful.

Risks Related to our Business Model and Other Operations Risks

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• growth or contraction in our addressable market;

• macroeconomic factors and their impacts on users of our platform and products.

Our current and prospective customers are impacted by worsening macroeconomic conditions to varying degrees.

Such conditions include, but are not limited to the high impact of high levels of inflation, high interest rates and ongoing overseas conflict.

• macroeconomic factors and their impacts on our customers and their budgets for our platform and products.

Our current and prospective customers are impacted by unstable macroeconomic conditions to varying degrees.

Such conditions include, but are not limited to the impact of fluctuations in inflation and interest rates and ongoing overseas conflict.

We cannot predict the impact macroeconomic conditions will have on our existing or prospective customers and how that may impact their spending with us.

We announced a price increase in November 2022 and may announce additional price increases in the future.

For the year ended December 31, 2023, as compared to the year ended December 31, 2022, this price increase contributed to an increase in our average revenue per customer and a decrease in our total number of customers.

As a result of this and any future pricing increase, our total number of customers may continue to decrease even when the average spend per customer increases over time.

We have a number of federal government customers that may be impacted by any budget cuts implemented by the incoming administration.

We cannot predict the impact any budget cuts will have on our existing or prospective customers and how that may impact their spending with us.

We have previously increased prices in the past and may effect additional price increases in the future.

Any future pricing increase may cause our total number of customers to continue to decrease even when the average spend per customer increases over time.

We may also experience softening demand or negative sentiment from our customers and prospective customers as a result of our increased pricing, which could impact our brand and competitiveness.

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Our customers have no obligation to renew their subscriptions, and we cannot assure you that our customers will renew subscriptions with a similar or increased subscription term or plan level or with the same or a greater number of users, social profiles or products.

Some of our customers have elected not to renew their agreements with us and we may not be able to accurately predict renewal rates.

Some of our customers have elected not to renew their agreements with us and we may not be

able to accurately predict renewal rates.

Moreover, while our contracts are generally non-cancellable during the contractual subscription term, certain customers have the right to cancel their agreements prior to the expiration of the subscription term.

Our renewal rates may decline or fluctuate and our cancellation rates may increase as a result of a number of factors, including customer satisfaction with our platform

and products, our customer success and support experience, the price and functionality of our solutions relative to those of our competitors, mergers and acquisitions affecting our customer base, the effects of global economic conditions, or reductions in our customers’ spending levels.

Our renewal rates may decline or fluctuate and our cancellation rates may increase as a result of a number of factors, including customer satisfaction with our platform and products, our customer success and support experience, the price and functionality of our solutions relative to those of our competitors, mergers and acquisitions affecting our customer base, the effects of global economic conditions, or reductions in our customers’ spending levels.

This may also cause our calculation of the lifetime value of our customers to decline or fluctuate between periods as this calculation assumes the subscription renewal rate for a given year will remain consistent in future years.

If our customers cancel or do not renew their subscriptions, renew on less favorable terms, fail to add more users or products or fail to purchase additional products, our revenues and growth prospects may decline.

We have experienced rapid revenue growth in recent periods and our recent growth rates may not be indicative of our future growth.

We have experienced rapid revenue growth in recent years.

In 2023, our revenue was $333.6 million, an increase of 31% as compared to our revenue of $253.8 million in 2022, which was an increase of 35% as compared to our revenue of $187.9 million in 2021.

Although we have experienced rapid revenue growth in recent years, we may not continue to grow as rapidly in the future and our revenue growth rates may decline.

Our revenue growth may slow or our revenue may decline for a number of other reasons, including reduced demand for our products, increased competition, a decrease in the growth or reduction in size of our overall market, failure to capitalize on growth opportunities, and the impacts to our business from macroeconomic factors such as high levels of inflation, high interest rates, ongoing overseas conflict, volatility in the capital markets and related market uncertainty.

Our current and prospective customers are impacted by worsening macroeconomic conditions to varying degrees and as a result, in some cases we are experiencing slower growth of existing customers most impacted by these conditions.

Our historical revenue growth rates may not be indicative of our future growth.

We have experienced revenue growth in the past, but the rate of our growth has varied.

For example, in 2024, our revenue was $405.9 million, an increase of 22% as compared to our revenue of $333.6 million in 2023, which was an increase of 31% as compared to our revenue of $253.8 million in 2022.

We may not continue to grow at similar or faster rates in the future, and our revenue growth rates may decline.

Our revenue growth may slow or our revenue may decline for a number of other reasons, including declining customer count, the maturation of our company, reduced demand for our products, increased competition, a decrease in the growth or reduction in size of our overall market, failure to capitalize on growth opportunities, and the impacts to our business from macroeconomic factors such as fluctuations in inflation and interest rates, ongoing overseas conflict, volatility in the capital markets and related market uncertainty.

Our current and prospective customers are impacted by volatile macroeconomic conditions to varying degrees and as a result, in some cases we are experiencing slower growth of existing customers most impacted by these conditions.

If we are unable to maintain consistent revenue or revenue growth, our stock price could be volatile or decline, and we may not achieve or maintain profitability.

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We cannot accurately predict the potential impact of any modification or termination of such agreements, including the impact on our access to the related APIs.

There can be no assurance that following any such modification or termination, we would be able to maintain our platform’s current level of functionality in such circumstances, as a result of more limited access to APIs or otherwise, which could adversely affect our results of operations.

There can be no

assurance that following any such modification or termination, we would be able to maintain our platform’s current level of functionality in such circumstances, as a result of more limited access to APIs or otherwise, which could adversely affect our results of operations.

For example, we are currently a member of the X (formerly known as Twitter) Official Partner Program.

There can be no assurance that X

will maintain this program in its current form or at all and any change to the program, our access or the terms of our membership, including pricing, may have a negative impact on our business.

There can be no assurance that X will maintain this program in its current form or at all and any change to the program, our access or the terms of our membership, including pricing, may have a negative impact on our business.

In addition, there can be no assurance that we will not be required to enter into new negotiated agreements with data providers in the future to maintain or enhance the level of functionality of our platform, or that the terms and conditions of such agreements, including pricing and levels of service, will not be less favorable, which could adversely affect our results of operations.

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If we fail to adapt and respond effectively to rapidly changing technology, new social media platforms, evolving industry standards or changing customer needs, requirements, tastes or preferences, our products may become less competitive.

Social media and the software industry are each subject to rapid technological change, evolving industry standards and practices and changing customer and user needs, requirements, tastes and preferences.

Social media and the software industry are each subject to rapid technological change, evolving industry standards and practices, developing regulatory requirements and changing customer and user needs, requirements, tastes and preferences.

The success of our business will depend, in part, on our ability to adapt and respond effectively to these changes on a timely basis.

A significant example of these changes is the rapid advancement of artificial intelligence (“AI”) technologies.

A significant example of these changes is the rapid advancement of AI technologies.

If we are unable to develop and sell new products that satisfy our customers and provide enhancements and new features for our existing platform and products that keep pace with the rapid change in social media and the software industry, our revenue and operating results could be adversely affected.

Our platform must also integrate with a variety of network, hardware, browser, mobile and software platforms, and technologies, and we must continuously modify and enhance our products to adapt to changes and innovation in these technologies.

If new technologies emerge or our competitors are able to deliver solutions at lower prices or more efficiently, conveniently or securely, such technologies or solutions could adversely affect our ability to compete.

The social media industry has experienced and is likely to continue to experience rapid change due to the evolving trends, tastes and preferences of users.

If new technologies

emerge or our competitors are able to deliver solutions at lower prices or more efficiently, conveniently or securely, such technologies or solutions could adversely affect our ability to compete.

The social media industry has experienced and is likely to continue to experience rapid change due to the evolving trends, tastes and preferences of users, changing policies and the evolving regulatory landscape.

If consumers widely adopt new social media networks and other third-party platforms or our customers’ use cases require new integrations with third-party platforms, we may need to develop integrations and functionality related to these new networks and platforms.

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In addition, new social media networks and other third-party platforms may not provide us with sufficient access to data from their platforms, preventing us from building effective integrations with our platform and products.

Changing consumer tastes may also render our current integrations or functionality obsolete and the financial terms, if any, under which we obtain such integrations or functionality unfavorable.

Regulatory requirements, including potential bans, and changing consumer tastes may also render our current integrations or functionality obsolete and the financial terms, if any, under which we obtain such integrations or functionality unfavorable.

Any failure of our products to operate effectively with the social media networks and other third-party platforms used most frequently by consumers or customers could reduce the demand for our products.

If we are unable to respond to these changes in a cost-effective manner, our products may become less marketable and less competitive or obsolete, and our operating results may be negatively affected.

In addition, the technology industry has experienced, and may continue to experience, leadership changes, layoffs and other corporate changes that could have a negative impact on our ability to work effectively with the partner.

As more of our sales efforts target larger enterprise customers, our sales cycle has and may continue to become longer and more expensive and we may encounter increased pricing pressure and compliance challenges.

As we continue to target more of our sales efforts toward larger enterprise customers, we expect to face continued heightened costs, longer sales cycles, greater competition and less predictability in completing some of our sales.

A large customer’s decision to use our services may require broad consensus within their organization, requiring multiple levels of sign off.

Such sales require considerable time for the customer to evaluate and test our platform prior to making a purchasing decision.

In addition, we may face stronger competition to attract larger customers, resulting in the need to reduce our pricing or offer additional incentives in order to complete a sale.

Also, such customers may require greater levels of education regarding the use and benefits of our services, as well as addressing concerns regarding data privacy and security obligations, and international law.

As a result of these factors, these sales opportunities may require us to devote greater resources to individual customers, driving up costs and time required to complete sales and diverting our resources to a smaller number of larger transactions.

If we fail to effectively manage these risks associated with sales cycles and sales to larger enterprise customers, our business, financial condition, and results of operations may be harmed.

We recognize subscription revenue ratably over the term of our customer contracts.

Consequently, downturns or upturns in new sales may not be immediately reflected in our operating results and may be difficult to discern.

We generally recognize subscription revenue from customers ratably over the terms of their contracts, which can range from monthly to one-year or multi-year arrangements.

As a result, a substantial portion of the subscription revenue we report in each period is derived from the recognition of deferred revenue relating to subscriptions entered into during previous periods.

Consequently, a decline in new sales or renewals in any one period may not be immediately reflected in our results of operations for such period.

However, the cumulative impact of such declines could negatively impact our business and results of operations in future periods.

Accordingly, the effect of significant downturns in sales and market acceptance of our solutions, and potential changes in our pricing policies or rate of expansion or retention, may not be fully reflected in our results of operations until future periods.

We also may be unable to adjust our cost structure to reflect the changes in revenue, resulting in lower margins and earnings.

In addition, our subscription-based model also makes it difficult to rapidly increase our revenue

through additional sales in any period, as revenue from new customers generally will be recognized over the term of the applicable agreement.

If we do not adequately fund our research and development efforts, or use research and development teams effectively, we may not be able to compete effectively, and our business and operating results may be harmed.

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Social media is quickly evolving and we may invest significantly in particular functionality or integrations that may become obsolete in the future.

In addition, in the future, new functionality may be required or networks may emerge and gain popularity with social media users, requiring us to quickly develop integrations.

Further, many of our competitors may expend a considerably greater amount of funds on their research and development programs, and those that do not may be acquired by larger companies that would allocate greater resources to our competitors’ research and development programs.

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From time to time, we experience spikes in the number of customer support tickets that we receive, which may result in an increase in customer requests and significant delays in responding to our customers’ requests.

We have experienced high customer satisfaction (CSAT) scores.

We achieved a 13% completion rate for our recent CSAT surveys.

As a result, the recent scores may not be reflective of our broader customer base, and customer satisfaction and the related scores could decrease in the future.

Increased customer demand for our support services, without corresponding revenue increases, could increase our costs and harm our operating results.

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Our sales process is highly dependent on the ease of use of our platform and products, our business reputation and positive recommendations from our existing customers.

Any failure to maintain a high-quality customer support organization, or a market perception

that we do not maintain such levels of support, could harm our reputation, our ability to sell to existing and prospective customers and our business.

Our international sales and operations subject us to additional risks and costs, including exposure to foreign currency exchange rate fluctuations, that can adversely affect our business, operating results and financial condition.

For each of the years ended December 31, 2023, 2022 and 2021, we derived 28% of our revenue from customers located outside of the United States.

We are continuing to expand our international operations as part of our growth strategy.

However, there are a variety of risks and costs associated with our international sales and operations, which include making investments prior to the proven adoption of our products, the cost of conducting our business internationally and hiring and training international employees and the costs associated with complying with local law.

Furthermore, we cannot predict the rate at which our platform and products will be accepted in international markets by potential customers.

We believe our ability to attract new customers to subscribe to our platform or to attract existing customers to renew or expand their use of our platform is directly correlated to the level of engagement we obtain with the customer.

To the extent we are unable to effectively engage with non-U.S.

customers due to our limited international sales force capacity, we may be unable to grow in international markets effectively.

As our international operations expand, our exposure to the effects of fluctuations in currency exchange rates grows.

While we have primarily transacted with customers and vendors in U.S.

dollars historically, we expect to continue to expand the number of transactions with our customers that are denominated in foreign currencies in the future.

Fluctuations in the value of the U.S.

dollar and foreign currencies may make our subscriptions more expensive for international customers, which could harm our business.

Additionally, we incur expenses for employee compensation and other operating expenses at our non-U.S.

locations in the local currency for such locations.

Fluctuations in the exchange rates between the U.S.

dollar and other currencies could result in an increase to the U.S.

dollar equivalent of such expenses.

These fluctuations could cause our results of operations to differ from our expectations or the expectations of our investors.

Additionally, such foreign currency exchange rate fluctuations could make it more difficult to detect underlying trends in our business and results of operations.

We do not currently maintain a program to hedge transactional exposures in foreign currencies.

However, in the future, we may use derivative instruments, such as foreign currency forward and option contracts, to hedge certain exposures to fluctuations in foreign currency exchange rates.

The use of such hedging activities may not offset any or more than a portion of the adverse financial effects of unfavorable movements in foreign exchange rates over the limited time the hedges are in place.

Moreover, the use of hedging instruments may introduce additional risks if we are unable to structure effective hedges with such instruments.

As more of our sales efforts target larger enterprise customers, our sales cycle may become longer and more expensive and we may encounter increased pricing pressure and compliance challenges.

A large customer’s decision to use our services may require broad consensus within their organization, requiring multiple levels of sign off.

Such sales require considerable time for the customer to evaluate and test our platform prior to making a purchasing decision.

In addition, we may face stronger competition to attract larger customers, resulting in the need to reduce our pricing or offer additional incentives in order to complete a sale.

we fail to effectively manage these risks associated with sales cycles and sales to larger enterprise customers, our business, financial condition, and results of operations may be harmed.

Any failure to maintain a high-quality customer support organization, or a market perception that we do not maintain such levels of support, could harm our reputation, our ability to sell to existing and prospective customers and our business.

Technological advances in AI may in the future disrupt the social media industry, which could significantly reduce the demand for our services or otherwise adversely impact our business or reputation if we are unable to successfully keep pace and navigate this evolving environment.

Our failure to invest in AI technologies and incorporate them into various facets of our business and product offerings in a timely, effective and compliant manner may place us at a competitive disadvantage, reducing demand for our offerings and adversely affecting our business, financial condition and results of operations.

Our competitors may more effectively internally utilize AI, enabling their business to run more efficiently than Sprout, placing us at a competitive disadvantage, and they may better incorporate AI into their product offerings, negatively impacting demand for our products.

Our competitors may more effectively internally utilize AI, enabling their

business to run more efficiently than Sprout Social, placing us at a competitive disadvantage, and they may better incorporate AI into their product offerings, negatively impacting demand for our products.

AI advances have the potential to enable the development of alternative competitive services or enable our customers to reduce or bypass the use of our services, such as a reduction of seats used by our customers.

If any of our customers, social network partners, competitors or new market entrants were to develop algorithms or other AI tools capable of replicating or better competing against our services, our services and solutions could, over time, become obsolete or unnecessary, or demand for our services could be significantly reduced, particularly if any such AI alternative proved to be more accurate, more efficient or more cost-effective.

Any widespread automation of our services could have a material adverse effect on our business, financial condition and results of operations.

Any of the foregoing could have a material adverse effect on our business, financial condition and results of operations.

We use machine learning and AI technologies in our business, and we are making investments in expanding AI capabilities in our products, services and tools, including improving existing and developing new AI technologies.

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The introduction of AI technologies into new or existing products may result in new or enhanced governmental or regulatory scrutiny, confidentiality or security risks, ethical concerns, legal liability or other complications that could adversely affect our business, reputation and financial results.

For example, our employees and personnel may use AI technologies to perform their work, and the disclosure and use of personal data in AI technologies is subject to various privacy laws and other privacy obligations.

For example, our employees and personnel may use AI technologies to perform their work, and the disclosure and use of personal data in AI technologies is subject to various laws, including data privacy and security laws and AI-specific laws and other privacy obligations.

Furthermore, AI technologies incorporated into our product offerings may use algorithms, datasets or training methodologies that may be flawed or contain deficiencies that may be difficult or impossible to proactively detect which, in turn, may suggest content that is factually inaccurate, biased or otherwise flawed.

We also use AI to assist us in making certain decisions, which is similarly regulated by certain laws, including data privacy laws.

Due to inaccuracies or flaws in the inputs, outputs, or logic of the AI, the model could be biased and could lead us to make decisions that could bias certain individuals (or classes of individuals), and adversely impact their rights, employment, and ability to obtain certain pricing, products, services, or benefits.

If such AI and machine learning-based outputs are deemed to be biased, we could face adverse consequences, including exposure to reputational and competitive harm, customer loss, and legal liability.

If our customers or others rely on or use such content to their detriment, it may lead to adverse outcomes, which may expose us to reputational harm, competitive harm or legal liability.

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Several jurisdictions around the globe, including Europe and certain U.S.

states, have proposed

enacted, or are considering laws governing AI, including the EU’s AI Act.

states, have proposed enacted, or are considering laws governing AI, including the EU’s AI Act.

We expect other jurisdictions will adopt similar laws.

Additionally, certain privacy laws extend rights to consumers (such as the right to delete certain personal data) and regulate automated decision making, which may be incompatible with our use of AI technologies and machine learning.

These obligations may make it harder for us to conduct our business using AI technologies and machine learning, lead to regulatory fines or penalties, require us to change our business practices, retrain our AI technologies and machine learning, or prevent or limit our use of AI technologies and machine learning.

These obligations may make it harder for us to conduct our business using AI technologies and machine learning, lead to regulatory fines or penalties, require us

to change our business practices, retrain our AI technologies and machine learning, or prevent or limit our use of AI technologies and machine learning.

For example, the U.S.

Fair Trade Commission (“FTC”) has required other companies to turn over (or disgorge) valuable insights or trainings generated through the use of AI technologies and machine learning where they allege the company has violated privacy and consumer protection laws.

Federal Trade Commission (“FTC”) has required other companies to turn over (or disgorge) valuable insights or trainings generated through the use of AI technologies and machine learning where they allege the company has violated privacy and consumer protection laws.

If we cannot use AI technologies and machine learning or that use is restricted, our business may be less efficient, or we may be at a competitive disadvantage.

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In addition, if resellers do not effectively market and sell our products, or fail to meet the needs of our customers, our reputation and ability to grow our business may also be harmed.

Our rapid growth and limited history with key features of our platform make it difficult to evaluate our prospects and future operating results.

We were incorporated in 2010 and we introduced our first solution in 2011.

Since then, our business has grown rapidly and evolved significantly.

Many of the key features of our platform and products have only launched in the past few years.

As a result of the rapid growth and evolution of our

business, our ability to forecast our future operating results is limited and subject to a number of uncertainties, including our ability to plan for and model future growth.

As such, any predictions about our future revenue and expenses may not be as accurate as they could be with longer operating history in the enterprise segment, with our current product set, due to our acquisition of Tagger or if we operated in a more predictable market.

We have encountered and will encounter risks and uncertainties frequently experienced by growing companies in rapidly changing industries, such as the risks and uncertainties described herein.

If our assumptions regarding these risks and uncertainties, which we use to plan our business, are incorrect or change, or if we do not address these risks and uncertainties successfully, our operating and financial results could differ materially from our expectations and our business could suffer.

For each of the years ended December 31, 2024, 2023 and 2022, we derived 27%, 28% and 28%, respectively, of our revenue from customers located outside of the United States.

There are a variety of risks and costs associated with our international sales and operations, which include making investments prior to the proven adoption of our products, the cost of conducting our business internationally and hiring and training international employees and the costs associated with complying with local law.

Furthermore, we cannot predict the rate at which our platform and products will be accepted in international markets by potential customers.

To the extent we are unable to effectively engage with non-U.S.

customers due to our limited international sales force capacity, we may be unable to grow in international markets effectively.

Due to our international presence, we have some exposure to the effects of fluctuations in currency exchange rates.

While we have primarily transacted with customers and vendors in U.S.

dollars historically, we expect to conduct some transactions with our customers that are denominated in foreign currencies in the future.

Fluctuations in the value of the U.S.

dollar and foreign currencies may make our subscriptions more expensive for international customers, which could harm our business.

Additionally,

we incur expenses for employee compensation and other operating expenses at our non-U.S.

locations in the local currency for such locations.

Fluctuations in the exchange rates between the U.S.

dollar and other currencies could result in an increase to the U.S.

dollar equivalent of such expenses.

These fluctuations could cause our results of operations to differ from our expectations or the expectations of our investors.

Additionally, such foreign currency exchange rate fluctuations could make it more difficult to detect underlying trends in our business and results of operations.

We do not currently maintain a program to hedge transactional exposures in foreign currencies.

However, in the future, we may use derivative instruments, such as foreign currency forward and option contracts, to hedge certain exposures to fluctuations in foreign currency exchange rates.

Moreover, the use of hedging instruments may introduce additional risks if we are unable to structure effective hedges with such instruments.

We have a history of losses and may not achieve profitability in the future.

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We have not always been able in the past and may be unable in the future to anticipate or prevent techniques used to obtain unauthorized access to or compromise of our systems because they change frequently and are generally not detected until after an incident has occurred.

For example, we have been, and expect to continue being, the target of

unsuccessful phishing and social engineering attacks, SQL and malformed input attacks, card testing attacks, and credential stuffing attacks targeting employee and customer access.

We also cannot be certain that we will be able to prevent vulnerabilities in our software or quickly address vulnerabilities that we may become aware of in the future.

While we have implemented security measures designed to protect against security incidents, there can be no assurance that these measures will be effective.

We take steps designed to detect, mitigate, and remediate vulnerabilities in our information systems (such as our hardware and/or software, including that of third parties upon which we rely).

We may not, however, detect and remediate all such vulnerabilities including on a timely basis.

We take steps designed to detect, mitigate, and remediate vulnerabilities in our information systems (such as our hardware and/or software, including that of third parties with whom we work).

We may not, however, detect and remediate all such vulnerabilities on a timely basis.

Further, we may experience delays in developing and deploying remedial measures and patches designed to address identified vulnerabilities.

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Any cybersecurity event, including any vulnerability in our software, cyberattack, intrusion or disruption, could result in significant increases in costs, including costs for remediating the effects of such an event, lost revenue due to network downtime, and a decrease in customer and user trust, increases in insurance premiums due to cybersecurity incidents, increased costs to address cybersecurity issues and attempts to prevent future incidents, and harm to our business and our reputation because of any such incident.

We employ a shared responsibility model where our customers are responsible for using, configuring and otherwise implementing security measures related to our platform, services and products in a manner that meets applicable cybersecurity standards, complies with laws, and addresses their information security risk.

As part of this shared responsibility security model, we make certain security features available to our customers that can be implemented at our customers’ discretion, or identify security areas or measures for which our customers are responsible.

For example, our customers can avail of Single Sign-On (SSO) integration with our platform, services and products to enforce their Identity Provider (IdP) settings.

In certain cases where our customers choose not to implement, or incorrectly implement, those features or measures, misuse our services, or otherwise experience their own vulnerabilities, policy violations, credential compromise or security incidents, even if we are not the cause of a resulting customer security issue or incident, our customer relationships reputation, and revenue in the future may be adversely impacted.

There can be no assurance that any limitation of liability provisions in our subscription agreements would be enforceable or adequate or would otherwise protect us from any such liabilities or damages with respect to any claim related to a cybersecurity incident.

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In addition, some of our customers or other relevant stakeholders may require us to notify them of data security breaches.

Such notifications are costly, and the notification or the failure to comply with such requirements could lead to adverse consequences Security compromises experienced by our competitors, by our customers or by us may lead to public disclosures, which may lead to widespread negative publicity.

Any security compromise in our industry, whether actual or perceived, could harm our reputation, erode confidence in the effectiveness of our security measures, negatively affect our ability to attract new customers, encourage consumers to restrict the sharing of their personal data with our customers or the social media networks, cause existing customers to elect not to renew their subscriptions or subject us to third-party lawsuits, regulatory fines or other action or liability, which could harm our business.

Such notifications are costly, and the notification or the failure to comply with such requirements could lead to adverse consequences.

Security compromises experienced by our competitors, by our customers or by us may lead to public disclosures, which may lead to widespread negative publicity.

We rely upon third parties to operate our platform and any disruption of or interference with our use of such third party providers would adversely affect our business, results of operations and financial condition.

We outsource the majority of our cloud infrastructure to Amazon Web Services, or AWS, which hosts our platform and products.

In addition, we outsource a small portion of our cloud infrastructure to other provider, which, together with AWS, we refer to as our Hosting Providers.

In addition, we outsource a small portion of our cloud infrastructure to other providers, which, together with AWS, we refer to as our Hosting Providers.

Our customers must have the ability to access our platform at any time, without interruption or degradation of performance.

Our Hosting Providers runs their own platform upon which our platform and products depend, and we are, therefore, vulnerable to service interruptions at our Hosting Providers.

Our Hosting Providers run their own platform upon which our platform and products depend, and we are, therefore, vulnerable to service interruptions at our Hosting Providers.

We have experienced, and expect that in the future we may experience interruptions, delays and outages in service and availability from time to time due to a variety of factors, including infrastructure changes, human or software errors, website hosting disruptions and capacity constraints.

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AWS provides us with computing and storage capacity pursuant to an agreement that continues until terminated by either party.

If any of the AWS data centers become unavailable to us without sufficient advance notice, we

would likely experience delays in delivering our platform and products until we could migrate to an alternate data center provider.

If any of the AWS data centers become unavailable to us without sufficient advance notice, we would likely experience delays in delivering our platform and products until we could migrate to an alternate data center provider.

Our disaster recovery program contemplates transitioning our platform and products to our backup data centers or regions in the event of a catastrophe, but we have not yet fully tested the procedure, and our platform and products may be unavailable, in whole or in part, during any transition procedure.

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In addition, we rely primarily on a single third party for credit card payment processing services for the portion of our customers paying by credit card.

If any of these third-party vendors were to experience an interruption, delay or outages in service and availability, we may be unable to process new and renewing subscriptions or credit card payments.

If any of these third-party vendors were to experience an interruption, delay or outages in service and availability, we may be

unable to process new and renewing subscriptions or credit card payments.

In addition, if any of these third-party vendors experience a cybersecurity breach affecting data related to services provided to us, we could experience reputational damage or incur liability.

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We believe that maintaining, developing, and enhancing our brand is critical to achieving widespread acceptance of our platform and products, attracting new customers, retaining existing customers, persuading existing customers to adopt additional products and use-cases, and hiring and retaining our employees.

We believe that the importance of our brand will increase as our awareness and

business continue to expand.

We believe that the importance of our brand will increase as our awareness and business continue to expand.

Successful promotion of our brand will depend on a number of factors, including the effectiveness of our marketing efforts, our thought leadership, our ability to provide a high-quality, reliable and cost-effective platform, the actions of our employees, executives, and board members, the perceived value of our platform and products, and our ability to provide quality customer success and support experience.

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Market opportunity estimates and growth forecasts, including those we have generated ourselves, are subject to significant uncertainty and are based on assumptions and estimates that may not prove to be accurate.

The variables that go into the calculation of our market opportunity are subject to change over time, and there is no guarantee that any particular number or percentage of addressable users or companies covered by our market opportunity estimates will purchase our products at all or generate any particular level of revenue for us.

The variables that go into the calculation of our market opportunity are subject to change over time, and there is no guarantee that any particular number or percentage of the total number of businesses in the United States or globally that we estimate will require a social media management platform, as set forth in our market opportunity estimates, will purchase our products at all or generate an amount of revenue indicated by our estimates of the average of our segment ACVs and our estimate of our direct competitor’s segment ACVs, as set forth in our market opportunity estimates.

Any expansion in the markets in which we operate depends on a number of factors, including the cost, performance, and perceived value associated with our platforms and those of our competitors.

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The market for our social media management platform is fragmented, rapidly evolving, and competitive.

In addition to competing with comprehensive social media management platforms with diverse capabilities, we compete with point solutions for sentiment monitoring, influencer marketing, compliance, social listening, content management and distribution, employee advocacy, relationship management and social commerce, among others, as well as native use of individual social media networks.

In addition to competing with comprehensive social media management platforms with diverse capabilities, we compete with point solutions for influencer marketing, social listening, content management and distribution, employee advocacy, relationship management and social commerce, among others, as well as native use of individual social media networks.

To remain competitive, we must deliver features and functionality that enhance the utility of our platform to our new and prospective customers, without the presence of software defects, adapt to changing functionality and APIs of the social media networks and other third party platforms, maintain and develop integrations with third parties that provide value to our customers, ensure our platform and products are easy to use and deliver value to our customers, provide a superior customer success and support experience and demonstrate value to our current and prospective customers across multiple functions within their organizations.

We may not be successful in delivering on some or all of the foregoing or doing so while maintaining competitive pricing of our platform and products, which could result in customer dissatisfaction and adversely affect our business.

Many of our current and future competitors may benefit from competitive advantages over us, such as greater name recognition, longer operating histories, more varied products and services, larger

sales and marketing or research and development budgets, more established relationships with social media networks and different or a greater number of third-party integrations.

Some of our current and future competitors may benefit from competitive advantages over us, such as greater name recognition, longer operating histories, more varied products and services, larger sales and marketing or research and development budgets, more established relationships with social media networks and different or a greater number of third-party integrations.

In addition, some of our competitors may make acquisitions or enter into strategic relationships to offer a broader range of products and services than we do.

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We are subject to stringent and changing obligations related to data privacy and security.

Our actual or perceived failure to comply with such obligations could lead to regulatory investigations or actions;

Our actual or perceived failure to comply with such laws and obligations could lead to regulatory investigations or actions;

fines and penalties;

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and other adverse business consequences.

In the ordinary course of business, we collect and process personal data, including proprietary and confidential business data, intellectual property, and other third-party data.

In the ordinary course of business, we collect and process personal data and other sensitive data, including proprietary and confidential business data, intellectual property, and other third-party data.

For example, we process personal data about our customers’ consumers, content creators, and other social media users that interact with our customers’ social media pages.

Our data collection and processing activities subject us to numerous data privacy and security obligations, such as various laws, regulations, guidance, industry standards, external and internal privacy and security policies, contracts, and other obligations that govern the processing of personal data by us and on our behalf.

Our data collection and processing activities subject us to certain data privacy and security obligations, such as various laws, regulations, guidance, industry standards, external and internal privacy and security policies, contracts, and other obligations that govern the processing of personal data by us and on our behalf.

While we contractually prohibit our customers from using our platform to process, store, or collect sensitive information (such as personal health information or credit card information), our customers may breach these use prohibitions and cause us to inadvertently violate laws, rules, or regulations regarding the use and protection of personal data, which in turn may adversely impact our business.

In the United States, federal, state, and local governments have enacted numerous data privacy and security laws, including data breach notification laws, personal data privacy laws, and consumer protection laws (e.g., Section 5 of the Federal Trade Commission Act), and other similar laws (e.g., wiretapping laws).

For example, the CCPA imposes certain obligations on businesses and service providers with respect to collecting and processing personal data of consumers, business representatives, and employees who are California residents.

These obligations include, but are not limited to, providing specific disclosures in privacy notices and affording California residents with certain rights related to their personal data.

The CCPA allows for statutory fines for noncompliance of up to $7,500 per violation.

In addition, the CPRA amends and expands the CCPA and establishes a new California Privacy Protection Agency to implement and enforce the CPRA, which increases the risk of an enforcement action.

Other states, like Virginia, Colorado, and Oregon, have also enacted or proposed data privacy laws that may differ from the CCPA.

If we are or become subject to these laws and/or new or amended data privacy laws, the risk of enforcement actions against us could increase because we may be subject to additional obligations under applicable regulatory frameworks, and the number of individuals or entities that could initiate actions against us may increase, in addition to further complicating our compliance efforts.

Numerous U.S.

states have enacted comprehensive privacy laws that impose certain obligations on covered businesses, including providing specific disclosures in privacy notices and affording residents with certain rights concerning their personal data.

As applicable, such rights may include the right to access, correct, or delete certain personal data, and to opt-out of certain data processing activities, such as targeted advertising, profiling, and automated decision-making.

The exercise of these rights may impact our business and ability to provide our products and services.

Certain states also impose stricter requirements for processing certain personal data, including sensitive information, such as conducting data privacy impact assessments.

These state laws allow for statutory fines for noncompliance.

For example, the California Consumer Privacy Act of 2018 (“CCPA”) applies to personal data of consumers, business representatives, and employees who are California residents and requires businesses to provide specific disclosures in privacy notices and honor requests of such individuals to exercise certain privacy rights.

The CCPA provides for statutory fines for intentional violations and allows private litigants affected by certain data breaches to recover significant statutory damages.

Similar laws have passed and are being considered in several other states, as well as at the federal and local levels.

Additionally, under various privacy laws and other obligations, we may be required to obtain certain consents to process personal data.

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Further, individuals may initiate litigation related to our processing of their personal data.

As another example, Brazil’s General Data Protection Law (Lei Geral de Proteção de Dados Pessoais, or “LGPD”) (Law No.

13,709/2018) may apply to our operations.

As another example, Brazil’s General Data Protection

Law (Lei Geral de Proteção de Dados Pessoais, or “LGPD”) (Law No.

13,709/2018) applies to our operations.

The LGPD broadly regulates processing of personal data of individuals in Brazil and imposes compliance obligations and penalties comparable to those of the EU GDPR.

In Canada, the Personal Information Protection and Electronic Documents Act (“PIPEDA”) may apply to our operations.

We may also process personal data about our customers’ consumers in Asia and therefore, may become subject to new and emerging data privacy regimes in Asia, including China’s Personal Information Protection Law, Japan’s Act on the Protection of Personal Information, and Singapore’s Personal Data Protection Act.

In Canada, the Personal Information Protection and Electronic Documents Act (“PIPEDA”) applies to our operations.

We also process personal data about our customers’ consumers in Asia and therefore, may become subject to new and emerging data privacy regimes in Asia, including China’s Personal Information Protection Law, Japan’s Act on the Protection of Personal Information, and Singapore’s Personal Data Protection Act.

Additionally, we are subject to the EU’s Digital Services Act, or DSA, which imposes additional legal requirements on certain types of digital service providers, including online marketplaces.

The DSA aims to prevent illegal and harmful activities online and combat the spread of disinformation and sets out a framework of layered responsibilities targeted at different types of services and imposes certain additional obligations on intermediary services, including a requirement to inform consumers of any illegal products or services being offered through the relevant digital platform.

Depending on how the DSA and any similar laws are implemented and interpreted, we may have to adapt our business practices, contractual arrangements, and services to comply with such obligations.

In addition, some of our customers may be subject to the EU’s Digital Operational Resilience Act (DORA) and similar UK regulatory requirements on operational resilience, which aim to protect against severe disruptions caused by cyberattacks and ICT issues.

These laws may obligate our customers to impose contractual provisions on us, including certain mandatory third-party risk management provisions.

If we fail to materially comply with these contractual requirements, we may be subject to investigations, audits or other adverse consequences.

Furthermore, in Europe, the Network and Information Security Directive (“NIS2”) regulates resilience and incident response capabilities of entities operating in a number of sectors, including the health sector.

Non-compliance with NIS2 may lead up to administrative fines of a maximum of 10 million Euros or up to 2% of the total worldwide revenue of the preceding fiscal year.

Certain jurisdictions have enacted data localization laws and cross-border personal data transfer laws.

For example, absent appropriate safeguards or other circumstances, the EU GDPR, UK GDPR, and laws in Switzerland generally restrict the transfer of personal data to countries that these jurisdictions consider to not provide an adequate level of personal data protection.

Although there are currently various mechanisms that may be used to transfer personal data from the EEA and UK to the United States in compliance with law, such as the EEA’s standard contractual clauses, the UK’s International Data Transfer Agreement / Addendum, and the EU-U.S.

Although there are currently various mechanisms that can be used to transfer personal data from the EEA and UK to the United States in compliance with law, such as the EEA’s standard contractual clauses, the UK’s International Data Transfer Agreement / Addendum, and the EU-U.S.

Data Privacy Framework and the UK extension thereto (which allows for transfers to relevant U.S.-based organizations who self-certify compliance and participate in the Framework), these mechanisms are subject to legal challenges, and there is no assurance that we can satisfy or rely on these measures to lawfully transfer personal data to the United States.

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or require us to increase our personal data processing capabilities and infrastructure in Europe and/or elsewhere at significant expense.

We publish privacy policies, marketing materials, and other statements, such as compliance with certain certifications or self-regulatory principles, regarding data privacy and security.

If these policies, materials or statements are found to be deficient, lacking in transparency, deceptive, unfair, or misrepresentative of our practices, we may be subject to investigation, enforcement actions by regulators, or other adverse consequences.

In addition to data privacy and security laws, we are contractually subject to industry standards adopted by industry groups, and we are, or may become in the future, subject to such obligations.

example, we may be subject to compliance with the Payment Card Industry Data Security Standard (“PCI DSS”).

The PCI DSS requires companies to adopt certain measures to ensure the security of cardholder information, including using and maintaining firewalls, adopting proper password protections for certain devices and software, and restricting data access.

We are also bound by other contractual obligations related to data privacy and security, and our efforts to comply with such obligations may not be successful.

We publish privacy policies, marketing materials, and other statements, related to compliance with certain certifications or self-regulatory principles, regarding artificial intelligence, data privacy and security.

Regulators in the United States are increasingly scrutinizing these statements, and if these policies, materials or statements are found to be deficient, lacking in transparency, deceptive, unfair, misleading, or misrepresentative of our practices, we may be subject to investigation, enforcement actions by regulators, or other adverse consequences.

Our obligations related to data privacy and security are quickly changing in an increasingly stringent fashion, creating some uncertainty as to the effective future legal framework.

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Although we endeavor to comply with all applicable data privacy and security obligations, we may at times fail (or be perceived to have failed) to do so.

Despite our efforts, our personnel or third parties upon whom we rely may fail to comply with such obligations, which could negatively impact our business operations and compliance posture.

Despite our efforts, our personnel or third parties with whom we work may fail to comply with such obligations, which could negatively impact our business operations and compliance posture.

For example, any failure by a third-party that processes personal data on our behalf to comply with applicable law, regulations, or contractual obligations could result in adverse effects, including inability to operate our business and proceedings against us by governmental entities or others.

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Any change to the data we receive from social media networks or other third parties may negatively affect the functionality of our platform and products.

If our information technology systems or data, or those of third parties upon which we rely, are or were compromised, we could experience adverse consequences resulting from such compromise, including but not limited to regulatory investigations or actions;

If our information technology systems or data, or those of third parties with whom we work, are or were compromised, we could experience adverse consequences resulting from such compromise, including but not limited to regulatory investigations or actions;

fines and penalties;

disruptions of our business operations;

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and other adverse consequences.

In the ordinary course of our business, we may collect, store, use, transmit, disclose, or otherwise process proprietary and confidential data, including personal data and intellectual property.

In the ordinary course of our business, we may collect, store, use, transmit, disclose, or otherwise process sensitive information.

We may rely upon third party service providers and technologies to operate critical business systems to process confidential and personal data in a variety of contexts, including, without limitation, third-party providers of cloud-based infrastructure, encryption and authentication technology, employee email, content delivery to customers, and other functions.

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We may inadvertently share or receive sensitive information with or from third parties.

We and the third parties upon which we rely may be subject to a variety of evolving threats, including but not limited to social-engineering attacks (including through phishing attacks), malicious code (such as viruses and worms), malware (including as a result of advanced persistent threat intrusions), denial-of-service attacks (such as credential stuffing), personnel misconduct or error, ransomware attacks, supply-chain attacks, software bugs, server malfunctions, software or hardware failures, loss of data or other information technology assets, adware, telecommunications failures, earthquakes, fires, floods, and other similar threats.

We and the third parties with whom we work may be subject to a variety of evolving threats, including but not limited to social-engineering attacks (including through deep fakes, which may be increasingly more difficult to identify as fake, and phishing attacks), malicious code (such as viruses and worms), malware (including as a result of advanced persistent threat intrusions), denial-of-service attacks (such as credential stuffing), personnel misconduct or error, ransomware attacks, supply-chain attacks, software bugs, server malfunctions, software or hardware failures, loss of data or other information technology assets, adware, telecommunications failures, earthquakes, fires, floods, and other similar threats.

Ransomware attacks, including those perpetrated by organized criminal threat actors, nation-states, and nation-state-supported actors, are becoming increasingly prevalent and severe and can lead to significant interruptions in our operations, loss of data and income, reputational harm, and diversion of funds.

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Similarly, supply-chain attacks have increased in frequency and severity, and we cannot guarantee that third parties and infrastructure in our supply chain or our third-party partners’ supply chains have not been compromised or that they do not contain exploitable defects or bugs that could result in a breach of or disruption to our information technology systems (including our platform) or the third-party information technology systems that support us and our services.

During times of war and other major conflicts, we and the third parties upon which we rely may be vulnerable to a heightened risk of these attacks, including retaliatory cyber-attacks, that could materially disrupt our systems and operations, supply chain, and ability to produce, sell and distribute our services.

Our ability to monitor these third parties’ information security practices is limited, and these third parties may not have adequate information security measures in place.

If the third parties with whom we work experience a security incident or other interruption, we could experience adverse consequences.

While we may be entitled to damages if the third parties with whom we work fail to satisfy their privacy or security-related obligations to us, any award may be insufficient to cover our damages, or we may be unable to recover such award.

During times of war and other major conflicts, we and the third parties with whom we work may be vulnerable to a heightened risk of these attacks, including retaliatory cyber-attacks, that could materially disrupt our systems and operations, supply chain, and ability to produce, sell and distribute our services.

Our remote workforce poses increased risks to our information technology systems and data, as more of our employees work from home, utilizing network connections outside our premises.

Future business transactions (such as acquisitions or integrations) could expose us to additional cybersecurity risks and vulnerabilities, as our systems (including our platform) could be negatively affected by vulnerabilities present in acquired or integrated entities’ systems and technologies.

Future business transactions (such as acquisitions or integrations) could expose us to additional cybersecurity

risks and vulnerabilities, as our systems (including our platform) could be negatively affected by vulnerabilities present in acquired or integrated entities’ systems and technologies.

Furthermore, we may discover security issues that were not found during due diligence of such acquired or integrated entities, and it may be difficult to integrate companies into our information technology environment and security program.

We may expend significant resources or modify our business activities in an effort to further protect against security incidents.

Certain data privacy and security obligations may require us to implement and maintain specific security measures to protect our information technology systems, including our platform, and data.

We expend significant resources or modify our business activities in an effort to further protect against security incidents.

Certain data privacy and security obligations require us to implement and maintain specific security measures to protect our information technology systems, including our platform, and data.

While we have implemented security measures designed to protect against security incidents, there can be no assurance that these measures will be effective.

Applicable data privacy and security obligations may require us to notify relevant stakeholders of security incidents.

Applicable data privacy and security obligations may require us to notify relevant stakeholders of security incidents impacting the confidentiality or integrity of their data and we have processes to ensure timely notifications, which have been utilized when required.

Such disclosures are costly, and the disclosures or the failure to comply with such requirements could lead to adverse consequences.

If we (or a third party upon whom we rely) experience a security incident or are perceived to have experienced a security incident, we may experience adverse consequences.

If we (or a third party with whom we work) experience a security incident or are perceived to have experienced a security incident, we may experience material adverse consequences.

These consequences may include:

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monetary fund diversions;

interruptions

in our operations (including availability of data);

interruptions in our operations (including availability of data);

financial loss;

and other similar harms.

Security incidents and attendant material consequences may prevent or cause customers to stop using our platform, products, or services, deter new customers from using our platform, products, or services, and negatively impact our ability to grow and operate our business.

In addition to experiencing a security incident, third parties may gather, collect, or infer sensitive data about us from public sources, data brokers, or other means that reveals competitively sensitive details about our organization and could be used to undermine our competitive advantage or market position.

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Our agreements with customers and other third parties may include indemnification or other provisions under which we agree to indemnify or otherwise be liable to them for losses suffered or incurred as a result of claims of intellectual property infringement, damages caused by us to property or persons, or other liabilities relating to or arising from our platform, products or other acts or omissions.

For some of our larger customers, we sometimes negotiate additional indemnification for breaches of our obligations, representations or warranties in the subscription agreement, gross negligence or willful misconduct, breaches of confidentiality, losses related to security incidents, breach of the data processing addendum or violations of applicable law.

For some of our larger customers, we sometimes negotiate additional indemnity provisions which may include indemnification for breaches of our obligations, representations or warranties in the subscription agreement, gross negligence or willful misconduct, breaches of confidentiality, losses related to security incidents, breach of the data processing addendum or violations of applicable law.

The term of these contractual provisions often survives termination or expiration of the applicable agreement.

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If any of these claims succeed, we may be forced to pay damages on behalf of our customers or may be required to obtain licenses for the platform or products they use or modify our platform or products.

If we cannot obtain all necessary licenses on commercially reasonable terms or made such modifications to avoid a claim, our customers may be forced to stop using our platform or products.

If we cannot obtain all necessary licenses on commercially reasonable terms or make such modifications to avoid a claim, our customers may be forced to stop using our platform or products.

Further, customers may require us to indemnify or otherwise be liable to them for breach of confidentiality or failure to implement adequate security measures with respect to their data stored, transmitted or processed by our employees, platform or products.

Although we normally contractually limit our liability with respect to such obligations, we may still incur substantial liability related to them.

Any dispute with a customer with respect to such obligations could have adverse effects on our relationship with that customer and other current and prospective customers, reduce demand for our platform or products, and harm our revenue, business and operating results.

Although we normally contractually limit our liability with respect to breach of those obligations, we may still be responsible for substantial damages related to claims.

Any dispute with a customer with respect to such obligations could

have adverse effects on our relationship with that customer and other current and prospective customers, reduce demand for our platform or products, and harm our revenue, business and operating results.

Our use of “open source” software could negatively affect our ability to offer and sell access to our platform and products and subject us to possible litigation.

We use open source software in our platform and products and expect to continue to use open source software in the future.

There are uncertainties regarding the proper interpretation of and compliance with open source licenses, and there is a risk that such licenses could be construed in a manner that imposes unanticipated conditions or restrictions on our ability to use such open source software, and consequently to provide or distribute our platform and products.

Although use of open source software has historically been free, recently several open source providers have begun to charge license fees for use of their software.

If our current open source providers were to begin to charge for these licenses or increase their license fees significantly, this would increase our research and development costs and have a negative impact on our results of operations and financial condition.

Additionally, we may from time to time face claims from third parties claiming ownership of, or seeking to enforce the terms of, an open source license, including by demanding release of source code for the open source software, derivative works or our proprietary source code that was developed using or that is distributed with such open source software.

These claims could also result in litigation and could require us to make our proprietary software source code freely available, require us to devote additional research and development resources to change our platform or incur additional costs and expenses, any of which could result in reputational harm and would have a negative effect on our business and operating results.

In addition, if the license terms for the open source software we utilize change, we may be forced to reengineer our platform or incur additional costs to comply with the changed license terms or to replace the affected open source software.

Further, use of certain open source software can lead to greater risks than use of third-party commercial software, as open source licensors generally do not provide warranties or controls on the origin of software or indemnification for third party infringement claims.

Although we have implemented policies to regulate the use and incorporation of open source software into our platform and products, we cannot be certain that we have not incorporated open source software in our platform and products in a manner that is inconsistent with such policies.

We are currently subject to, and may become in the future, subject to litigation, disputes or regulatory inquiries for a variety of claims, which could adversely affect our results of operations, harm our reputation or otherwise negatively affect our business.

Securities-related class action lawsuits and/or derivative lawsuits have often been brought against companies that experience volatility in the market price of their securities.

We are currently, and may become in the future, subject to securities class actions, derivative suits or other securities-related legal actions.

For example, as described further in Note 11 of the Notes to the Financial Statements (Part I, Item 8 of this Annual Report), beginning in May 2024, securities class action litigation and related stockholder derivative lawsuits (the “Securities Actions”) were filed against us and certain of our executives alleging violations of the federal securities laws for allegedly making false and misleading statements and omissions of fact.

It is possible that additional lawsuits will be filed, or allegations received from stockholders, with respect to these same or other matters and also naming us and/or our officers and directors as defendants.

The outcomes of the Securities Actions and any other related lawsuits are subject to inherent uncertainties, and the actual defense and disposition costs will depend upon many unknown factors.

We could be forced to expend significant resources in the defense of the Securities Actions and any additional lawsuits, and we may not prevail.

In addition, we may incur substantial legal fees and costs in connection with such lawsuits.

We currently are not able to estimate the possible cost to us from these matters, as the Securities Actions are currently at an early stage, and we cannot be certain how long it may take to resolve the Securities Actions or the possible amount of any damages that we may be required to pay.

Monitoring, initiating and defending against legal actions is time-consuming for our management, is likely to be expensive and may detract from our ability to fully focus our internal resources on our business activities.

We could be forced to expend significant resources in the settlement

or defense of the Securities Actions and any potential future lawsuits, and we may not prevail in such lawsuits.

Additionally, we may not be successful in having any such lawsuits dismissed or settled within the limits of our insurance coverage.

We have not established any reserve for any potential liability relating to the Securities Actions or any potential future lawsuits.

It is possible that we could, in the future, incur judgments or enter into settlements of claims for monetary damages.

A decision adverse to our interests in the Securities Actions, or in similar or related litigation, could result in the payment of substantial damages, or possibly fines, and could have a material adverse effect on our business, our stock price, cash flow, results of operations and financial condition.

From time to time, we may also be involved in other types of litigation, disputes or regulatory inquiries that arise in the ordinary course of business.

These may include claims, lawsuits and proceedings involving labor and employment, wage and hour, and commercial.

We generally expect that the number, type and significance of claims, lawsuits, disputes and/or regulatory inquiries involving the Company may increase as our business expands and our company grows larger.

While our agreements with customers generally limit our liability for damages arising from our platform, we cannot assure you that these contractual provisions will protect us from liability for damages in the event we are sued.

Additionally, although we carry general liability insurance and director and officer liability insurance, these policies may not apply to cover all claims to which we are (or could be) exposed and/or may be inadequate to fully cover damages and/or liabilities resulting from such claims.

Any claims against us, whether meritorious or not, could result in costly litigation, require significant amounts of management and employee time, adversely affect our reputation and/or result in the diversion of significant operational resources.

Because litigation is inherently unpredictable, we cannot assure you that the results of any of these actions will not have a material adverse effect on our revenue, business, brand, results of operations and financial condition.

We are subject to U.S.

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Our exposure for violating these laws may increase as we continue to expand our international presence, and any failure to comply with such laws could harm our business.

Our use of “open source” software could negatively affect our ability to offer and sell access to our platform and products and subject us to possible litigation.

We use open source software in our platform and products and expect to continue to use open source software in the future.

Although use of open source software has historically been free, recently several open source providers have begun to charge license fees for use of their software.

We may be subject to litigation, disputes or regulatory inquiries for a variety of claims, which could adversely affect our results of operations, harm our reputation or otherwise negatively affect our business.

From time to time, we may be involved in litigation, disputes or regulatory inquiries that arise in the ordinary course of business.

These may include claims, lawsuits and proceedings involving labor and employment, wage and hour, commercial, alleged securities law violations or other investor claims, and other matters.

We expect that the number and significance of these potential disputes may increase as our business expands and our company grows larger.

Although we carry general liability insurance coverage, our insurance may not cover all potential claims to which we are exposed or may not be adequate to indemnify us for all liability that may be imposed.

Any claims against us, whether meritorious or not, could be time consuming, result in costly litigation, require significant amounts of management time, adversely affect our reputation and result in the diversion of significant operational resources.

Risks Related to Ownership of Our Class A Common Stock

Our actual operating results may fluctuate from period to period and may differ significantly from any guidance provided.

Our guidance, including forward-looking statements about our business, is prepared by management and is qualified by, and subject to, a number of assumptions and estimates that, while presented with numerical specificity, are inherently subject to significant business, economic and competitive uncertainties and contingencies.

Many of these uncertainties and contingencies are beyond our control and are based upon specific assumptions with respect to future events.

We generally state possible outcomes as high and low ranges, which are intended to provide a sensitivity analysis as variables are changed, but are not intended to represent that actual results could not fall outside of the suggested ranges or otherwise fluctuate from period to period.

Factors that may cause fluctuations in our results of operations include, without limitation, those listed below:

• variability in our sales cycle, including as a result of the budgeting cycles and internal purchasing priorities of our customers;

• our limited history with key features of our platform;

• our ability to collect on accounts receivable;

• our ability to attract new customers;

• customer renewal rates;

• the timing of sales and recognition of revenue, which may vary as a result of changes in accounting rules and interpretations;

• the amount and timing of operating expenses related to the maintenance and expansion of our business, operations and infrastructure;

• network outages or actual or perceived security breaches or other incidents;

• general economic, market and political conditions;

• the timing and success of introductions of new platform features and services by us or our competitors or any other change in the competitive dynamics of our industry, including consolidation among competitors, customers or strategic partners.

Guidance is necessarily speculative in nature, and it can be expected that some or all of the assumptions of the guidance furnished by us will not materialize or will vary significantly from actual results.

In particular, guidance offered in periods of extreme uncertainty, such as the uncertainty caused by macroeconomic conditions, is inherently more speculative in nature than guidance offered in periods of relative stability.

We have in the past, and may in the future, generate financial results that are below our stated guidance and/or lower or otherwise revise our guidance to reflect changes in our expected financial results.

Accordingly, any guidance with respect to our projected financial performance is necessarily only an estimate of what management believes is realizable as of the date the guidance is given.

Actual results may vary from the guidance and the variations may be material.

In addition, the reliability of any forecasted financial data will diminish the farther in the future that the data is forecasted.

Actual operating results may be different from our guidance, and such differences may be adverse and material.

In light of the foregoing, investors are urged to not to place undue reliance on our guidance.

In addition, the market price of our Class A common stock may reflect various market assumptions as to the accuracy of our guidance.

If our actual results of operations fall below the expectations of investors or securities analysts, the price of our Class A common stock could decline substantially.

Our share price has been and may continue to be volatile, and you could lose all or part of your investment.

The market price of our Class A common stock has been, and is likely to continue to be, volatile and could be subject to wide fluctuations in response to many risk factors listed in this section, and others beyond our control, including:

• actual or anticipated fluctuations in our financial condition and operating results, including fluctuations in our quarterly and annual results;

The market price of our Class A common stock has been, and may continue to be, volatile and could be subject to wide fluctuations in light of the many risk factors listed in this section, as well as others beyond our control, including:

• variations in our financial results or those of our competitors;

• changes in earnings estimates, recommendations or coverage of our common stock by securities analysts;

• our failure to meet the estimates and projections of the investment community or that we may otherwise provide to the public;

• rumors, announcements or articles regarding our or our competitors’ operations, management, organization, financial condition or financial statements;

• issuance of new or updated research or reports by securities analysts or the failure of a security analyst to continue covering our company.

• rumors, announcements or articles regarding our or our competitors’ operations, management, organization, products, acquisitions, strategic partnerships, capital commitments, financial condition or financial statements;

• additions or departures of key personnel;

• future sales of our common stock or other securities;

• litigation or regulatory actions involving us, including Securities Actions;

• general economic, industry, and market conditions;

• political developments in the United States, including potential implications from the recent elections;

• other events or factors, including resulting from natural disasters, pandemics or responses to such events.

Furthermore, the stock markets and software and technology stocks have experienced price and volume fluctuations that have affected and continue to affect the market prices of equity securities of many companies.

These fluctuations often have been unrelated or disproportionate to the operating performance of those companies, as recently illustrated by the impact on stock markets from shifting macroeconomic conditions.

These broad market and industry fluctuations may negatively impact the market price of our Class A common stock.

In the past, companies that have experienced volatility in the market price of their stock have been subject to securities class action litigation.

We may be the target of this type of litigation in the future.

Securities litigation against us could result in substantial costs and divert our management’s attention from other business concerns, which could seriously harm our business.

The dual class structure of our common stock and the existing ownership of capital stock by our Co-Founders have the effect of concentrating voting control with our Co-Founders for the foreseeable future, which will limit the ability of our other investors to influence corporate matters.

In the past, following periods of volatility in the overall market and the trading price of a particular company’s securities, securities class action litigation has often been instituted against these companies.

For example, as described above, we are currently party to the Securities Actions.

These broad market and industry fluctuations may negatively impact the market price of our Class A common stock and the resulting litigation could result in substantial costs and a diversion of our management’s attention and resources, which could, in turn, harm our business.

The dual class structure of our common stock and the existing ownership of capital stock by our Co-Founders have the effect of concentrating voting control with our Co-Founders for the foreseeable future, which limits the ability of our other investors to influence corporate matters.

Our Class B common stock has ten votes per share and our Class A common stock has one vote per share.

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We cannot predict whether our dual class structure will result in a lower or more volatile market price of our Class A common stock, in adverse publicity or other adverse consequences.

For example, certain index providers have announced restrictions on including companies with multiple-class share structures in certain of their indices.

certain index providers have announced restrictions on including companies with multiple-class share structures in certain of their indices.

In addition, several stockholder advisory firms have announced their opposition to the use of multiple class structures.

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• providing that vacancies on our board of directors may be filled only by a majority of directors then in office, even though less than a quorum;

• prohibiting the adoption, amendment or repeal of our amended and restated bylaws or the repeal of the provisions of our amended and restated certificate of incorporation regarding the election

and removal of directors without the required approval of at least 66.67% of the shares entitled to vote at an election of directors;

• prohibiting the adoption, amendment or repeal of our amended and restated bylaws or the repeal of the provisions of our amended and restated certificate of incorporation regarding the election and removal of directors without the required approval of at least 66.67% of the shares entitled to vote at an election of directors;

• prohibiting stockholder action by written consent;

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We continue to reassess the sufficiency of finance personnel in response to these increasing demands and expectations.

We have and expect to continue to expend significant resources in developing the necessary documentation and testing procedures required by Section 404 of the Sarbanes-Oxley Act.

We have and expect to continue to deploy resources in developing the necessary documentation and testing procedures required by Section 404 of the Sarbanes-Oxley Act.

However, we cannot be certain that the actions we have taken and may in the future take to improve our internal controls over financial reporting will be sufficient, or that we will be able to implement our planned processes and procedures in a timely manner.

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Supreme Court decision in South Dakota v.

Wayfair Inc., certain states have adopted, or started to enforce, laws that may require us to

calculate, collect and remit taxes on sales in their jurisdictions, even if we do not have a physical presence in such jurisdictions.

A successful assertion by one or more tax authorities requiring us to collect indirect taxes in jurisdictions in which we do not currently do so, to collect additional indirect taxes in a jurisdiction in which we currently collect such taxes, or to withhold additional employment taxes, could, among other things, result in substantial tax liabilities (including taxes on past sales, as well as penalties and interest), create significant administrative burdens for us, discourage users from utilizing our products or otherwise harm our business, financial condition and results of operations.

We recognize subscription revenue ratably over the term of our customer contracts.

Consequently, downturns or upturns in new sales may not be immediately reflected in our operating results and may be difficult to discern.

We generally recognize subscription revenue from customers ratably over the terms of their contracts, which can range from monthly to one-year or multi-year arrangements.

Consequently, a decline in new sales or renewals in any one period may not be immediately reflected in our results of operations for such period.

However, the cumulative impact of such declines could negatively impact our business and results of operations in future periods.

We also may be unable to adjust our cost structure to reflect the changes in revenue, resulting in lower margins and earnings.

In addition, our subscription-based model also makes it difficult to rapidly increase our revenue through additional sales in any period, as revenue from new customers generally will be recognized over the term of the applicable agreement.

Wayfair Inc., certain states have adopted, or started to enforce, laws that may require us to calculate, collect and remit taxes on sales in their jurisdictions, even if we do not have a physical presence in such jurisdictions.

significant administrative burdens for us, discourage users from utilizing our products or otherwise harm our business, financial condition and results of operations.

Our ability to utilize our net operating loss carryforwards may be limited.

As of December 31, 2023, we had U.S.

federal and state net operating loss carryforwards of approximately $64.8 million and $12.5 million, respectively.

As of December 31, 2024, we had gross U.S.

federal and state net operating loss carryforwards of approxim ately $308.5 million and $215.8 million, respectively.

Our ability to utilize our federal net operating loss carryforwards may be limited under Section 382 of the Internal Revenue Code of 1986, as amended, or the Code.

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Additionally, because of the differences in foreign intellectual property laws, our intellectual property rights may not receive the same degree of protection in foreign countries as they would in the United States.

Furthermore, it is not always possible to predict where our business will expand to adequately secure our intellectual property rights or obtain protection in countries where we do not currently do

Furthermore, it is not always possible to predict where our business will expand to adequately secure our intellectual property rights or obtain protection in countries where we do not currently do business.

The inability or failure to obtain or maintain adequate protection of our intellectual property rights for any reason could have a material adverse effect on our business, results of operations and financial condition.

In order to protect our intellectual property, we may be required to spend significant resources to monitor and protect our rights.

In order to protect our intellectual property, we may be required to spend resources to monitor and protect our rights.

Litigation brought to protect and enforce our intellectual property rights could be costly, time-consuming and distracting to management, and could result in the impairment or loss of portions of our intellectual property.

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We rely on our intellectual property to distinguish our products, services, inventions and works of authorship, including software, from those of our competitors and to create competitive advantages in the marketplace.

We have applied for and registered much of this intellectual property in the United States and also applied for trademark protection in certain foreign countries.

We have applied for and registered parts of this intellectual property in the United States and also applied for trademark protection in certain foreign countries.

We cannot assure you that our intellectual property applications will be approved.

Additionally, although we rely on copyright laws to protect our works of authorship, including our software, we do not apply to register the copyrights in any of our works.

We also rely on unpatented proprietary technology that is only protected to the extent that it is kept secret from and not independently developed by others.

To protect our trade secrets and other proprietary technology and information, we have entered into confidentiality agreements with most of our

employees and consultants.

We cannot assure you that these agreements will provide meaningful protection against unauthorized use, misappropriation or unlawful disclosure of such trade secrets, know-how or other proprietary technology information.

We also rely on unpatented proprietary technology that is only protected to the extent that it is copyrightable, and kept secret from and not independently developed by others.

To protect our trade secrets and other proprietary technology and information, we have entered into confidentiality agreements with most of our employees and consultants.

We cannot assure you that these agreements will provide

meaningful protection against unauthorized use, misappropriation or unlawful disclosure of such trade secrets, know-how or other proprietary technology information.

In addition, the rapid adoption of AI software has made it increasingly difficult to keep proprietary information secret.

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General Risk Factors

Unstable market and economic conditions, including a global or domestic recession or the fear of a recession, may have serious adverse consequences on our business, financial condition and share price.

The global economy, including credit and financial markets, has experienced extreme volatility and disruptions, including severely diminished liquidity and credit availability, declines in consumer confidence, declines in economic growth, increases in unemployment rates, high levels of inflation, high interest rates and uncertainty about economic stability.

Unstable market and economic conditions may have serious adverse consequences on our business, financial condition and share price.

The global economy, including credit and financial markets, has experienced extreme volatility and disruptions, including severely diminished liquidity and credit availability, declines in consumer confidence, declines in economic growth, increases in unemployment rates, fluctuations in inflation, interest rates and uncertainty about economic stability.

For example, ongoing overseas conflict has created volatility in the global capital markets, including disruptions of the global supply chain and energy markets.

In addition, high levels of inflation and other macroeconomic pressures in the United States and the global economy could exacerbate extreme volatility in the global capital markets and heighten unstable market conditions.

In addition, fluctuations in inflation and other macroeconomic pressures in the United States and the global economy could exacerbate extreme volatility in the global capital markets and heighten unstable market conditions.

Any such volatility and disruptions may have adverse consequences on us, our customers, partners or other third parties on whom we rely.

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The occurrence of any of the foregoing could adversely affect our revenue, business, results of operations and financial condition.

We depend largely on the continued service of our senior management and other key employees, the loss of any of whom could adversely affect our business, results of operations and financial condition.

Our future performance depends on the continued service and contributions of our senior management and other key employees to execute on our business plan, to develop our platform and products, to attract and retain customers and to identify and pursue strategic opportunities.

The loss of service of senior management or other key employees could significantly delay or prevent the achievement of our development and strategic objectives.

In particular, we depend to a considerable degree on the vision, skills, experience and effort of our Chief Executive Officer, Ryan Barretto, and our Co-Founder and Executive Chair, Justyn Howard.

The replacement of any of our senior management personnel would likely involve significant time and costs, and such loss could adversely affect our revenue, business, results of operations and financial condition.

If we cannot attract and retain qualified personnel or maintain our culture as we grow, we may be unable to execute our business strategy.

We believe that a critical component of our success has been our company culture and values.

We have invested substantial time and resources in building our team and we believe our strong employer brand has been instrumental in our ability to attract and retain highly qualified personnel.

Competition for executives, software engineers, product managers, sales personnel and other key personnel in the software industry is intense.

We have experienced and may in the future experience difficulty attracting and retaining qualified candidates to fill open positions.

To remain competitive, we must also retain and motivate existing employees through compelling compensation practices, career development opportunities and our company culture and values.

As we continue to expand our presence and offer remote work options, it will be essential to preserve our company culture and values across an increasingly dispersed workforce.

Any failure to preserve the company culture and values we have created could negatively affect our future success, including our ability to retain and recruit personnel and to effectively focus on and pursue our corporate objectives.

As a federal government contractor, we are required to maintain plans to ensure compliance with nondiscrimination and regulatory requirements for qualified employees in compliance with Section 503 of the Rehabilitation Act and the Vietnam Era Veterans’ Readjustment Assistance Act.

Previously, federal contractors were obligated to comply with Executive Order 11246, which mandated the development of affirmative action programs focused on race and gender.

Recent executive orders have eliminated this requirement.

This change in law may present several risks, including the perception among internal and external stakeholders that the company is moving away from its commitment to equal opportunity for race and gender.

This perception could lead to challenges in hiring or retaining employees and other adverse operational impacts.

However, failure to comply with changes in the law could expose Sprout to administrative, civil, or criminal liabilities, including fines, penalties, repayments, or suspension or debarment from eligibility for future U.S.

government contracts.

Additionally, Sprout’s effort to build an inclusive workforce in compliance with the law could lead to legal challenges.

Our recent growth and any future growth in headcount may be difficult to manage effectively.

We have recently experienced, and anticipate that we will continue to experience, a period of rapid growth in our operations and headcount.

Our growth has placed, and future growth will place, a significant strain on our management, technical, administrative, operational and finance, tax, and accounting infrastructure.

Our success will depend in part on our ability to manage this growth effectively.

To manage the expected growth of our operations and personnel, we will need to continue to improve our management, technical, administrative, operational, finance, tax, and accounting controls and our reporting systems and procedures.

Failure to effectively manage our growth could result in difficulty or delays in effectively scaling our platform or products, declines in quality or customer satisfaction, increases in costs, difficulties in introducing new features, regulatory and legal action, or other difficulties.

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

We may not be able to generate sufficient cash to service our indebtedness, and may be forced to take other actions to satisfy our obligations under our indebtedness, which may not be successful.

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If the debt under our Credit Agreement were to be accelerated, we may not have sufficient cash on hand or be able to sell sufficient collateral to repay such debts, which would have an immediate adverse effect on our business, liquidity, and financial condition.

The loss of service of senior management or other key employees could significantly delay or prevent the achievement of our development and strategic objectives.

In particular, we depend to a considerable degree on the vision, skills, experience and effort of our Co-Founder, Chairman and Chief Executive Officer, Justyn Howard and President, Ryan Barretto.

If we cannot attract and retain qualified personnel or maintain our culture as we grow, we may be unable to execute our business strategy.

We believe that a critical component of our success has been our company culture and values.

We have invested substantial time and resources in building our team and we believe our strong employer brand has been instrumental in our ability to attract and retain highly qualified personnel.

Competition for executives, software developers, product managers, sales personnel and other key personnel in the software industry is intense.

We have experienced and may in the future experience difficulty attracting and retaining qualified candidates to fill open positions.

Many of the companies with which we compete for talent have greater resources than we have and may offer greater compensation packages.

To remain competitive, we must also retain and motivate existing employees through compensation practices, career development opportunities and our company culture and values.

As we continue to grow, including expanding our presence domestically and internationally, and to allow our employees to work remotely, we will need to maintain our company culture and values among a larger number of employees dispersed in various geographic regions.

Our recent growth and any future growth in headcount may be difficult to manage effectively.

We have recently experienced, and anticipate that we will continue to experience, a period of rapid growth in our operations and headcount.

Our growth has placed, and future growth will place, a significant strain on our management, technical, administrative, operational and finance, tax, and accounting infrastructure.

Our success will depend in part on our ability to manage this growth effectively.

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

We may not be able to secure additional financing on favorable terms, or at all, to meet our future capital needs.

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We may not be able to timely secure additional debt or equity financing on favorable terms, or at all.

Changing macroeconomic conditions, including high interest rates and volatility in the capital markets, exacerbate this risk.

If we raise additional funds through further issuances of equity, convertible debt securities or other securities convertible into equity, our existing stockholders could suffer significant dilution in their percentage ownership of our company, and any new equity securities we issue could have rights, preferences and

privileges senior to those of holders of our Class A common stock.

Changing macroeconomic conditions, including fluctuations in interest rates and volatility in the capital markets, exacerbate this risk.

If we are unable to obtain adequate financing or financing on terms satisfactory to us, when we require it, our ability to continue to grow or support our business and to respond to business challenges could be significantly limited.

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Future financing agreements may contain restrictive operating and financial covenants that could limit our operating flexibility, including covenants that limit our ability to incur additional indebtedness or liens, merge with other companies or consummate certain changes of control, acquire other companies, engage in new lines of business, add new offices or business locations, make certain investments, pay dividends, transfer or dispose of certain assets, liquidate or dissolve, amend certain material agreements and enter into various specified transactions.

Our ability to remain in compliance with the covenants under any future debt instruments, and to pay fees, interest and principal on our indebtedness will depend on, among other things, our operating performance and market conditions.

Our ability to remain in compliance with the covenants under any future debt instruments, and to pay fees, interest and principal on our indebtedness will depend on,

among other things, our operating performance and market conditions.

Accordingly, our cash flow may not be sufficient to allow us to pay principal and interest on future indebtedness and meet our other business obligations.

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What changed 10-K

Item 1A. Risk Factors