What changed in this filing

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Item 1A. Risk Factors

2026-05-27 compared with 2025-05-23 · 128 added, 95 removed, 772 unchanged (22% of the section changed)

70 unchanged sentences

Recent and continuing higher interest rates or prospective decreases in the availability of credit may adversely affect the ability of the StepStone Funds to achieve attractive rates of return, particularly because certain funds and portfolio companies depend on leverage for a return on investment.

While interest rates have historically been low in recent years, various economic factors have recently resulted in a significant increase in interest rates and the rate of inflation, and may also reduce credit availability, all of which may adversely affect the ability of the StepStone Funds to achieve attractive rates of return and adversely affect the value of our carried interest.

For instance, in fiscal 2023, we recorded a $122 million loss on unrealized carried interest allocations (net of the reversal of realized carried interest allocations) with respect to our historic operations, as well as a $452 million loss on Legacy Greenspring carried interest allocations.

In fiscal 2024, we recorded a $75 million loss on Legacy Greenspring carried interest allocations.

While interest rates were at historically low levels for an extended period, interest rates and the rate of inflation have since increased significantly.

Although rates have declined from peak levels, interest rates have remained relatively elevated and these economic factors may also reduce credit availability, all of which may adversely affect the ability of the StepStone Funds to achieve attractive rates of return and adversely affect the value of our carried interest.

In prior periods, we have recorded significant losses on unrealized carried interest allocations, which illustrate the sensitivity of carried interest to changes in valuations, interest rates, and credit conditions.

The StepStone Funds, as well as the companies in which they invest, raise capital in the structured private debt, leveraged loan and high yield bond markets.

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If the investment returns achieved by the StepStone Funds are reduced, it could result in negative reputational effects and impair the value of carried interest allocations, which could materially and adversely affect our business, financial condition and results of operations.

In addition, as part of broader industry dynamics, certain private credit and other products that offer investors periodic liquidity (including through redemption, repurchase or tender offer features), including in the private wealth market, may experience increased investor liquidity requests during periods of market stress or higher interest rates.

Such elevated liquidity requests, whether in our products or in competing products, could adversely affect investor sentiment toward such strategies and our ability to fundraise, and could contribute to increased liquidity requests across our products that offer periodic investor liquidity.

Elevated liquidity requests could also adversely affect performance and reduce AUM, which could reduce our management fees and ability to earn incentive fees and carried interest, and could materially and adversely affect our business, financial condition and results of operations.

Furthermore, recent comments by the head of the SEC’s Division of Enforcement indicate the division is more closely monitoring the private credit markets, which could result in heightened regulatory scrutiny of our private credit activities.

Clients in the StepStone Funds with commitment-based structures may not satisfy their contractual obligation to fund capital calls when requested, which could adversely affect a fund’s operations and performance.

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However, if a client has invested little or no capital, for instance early in the life of a fund, then the forfeiture penalty may not be a significant deterrent to default.

Failure to fund capital calls may occur more frequently in the future, as a result of recent increases in interest rates, decreases in equity values and dislocations in the banking sector, or in the event of a continued economic slowdown.

For example, in March 2023, Silicon Valley Bank was closed by state regulators and placed under receivership by the U.S.

Federal Deposit Insurance Corporation, which temporarily delayed certain clients fulfilling capital calls to the StepStone Funds.

Failures or delays in funding capital calls may occur more frequently in the future, as a result of recent increases in interest rates, decreases in equity values and dislocations in the banking sector, or in the event of a continued economic slowdown.

In addition, changes to asset allocation policies or new laws or regulations resulting from declines in public equity markets may restrict or prohibit investors from investing in new or successor StepStone Funds or funding existing commitments.

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We may need to use or reserve cash to repay such contingent repayment obligations instead of using the cash for other purposes.

Our investment management activities may involve investments in relatively high-risk, illiquid assets, and we may lose, or our clients may lose, some or all of the amounts invested in these activities or fail to realize any profits from these activities for a considerable period of time.

Our investment management activities may involve investments in high-risk, illiquid assets, and we may lose, or our clients may lose, some or all of the amounts invested in these activities or fail to realize any profits from these activities for a considerable period of time.

The investments made by the StepStone Funds and recommended by our advisory services include high-risk, illiquid assets.

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In addition, StepStone and the StepStone Funds and their portfolio companies and other investments may not be able to identity all potential solvency or stress concerns with respect to a financial institution or to transfer assets from one financial institution to another in a timely manner in the event a financial institution comes under stress or fails.

For example, in March 2023, Silicon Valley Bank was closed by state regulators and placed under receivership by the U.S.

Federal Deposit Insurance Corporation, which temporarily delayed certain clients fulfilling capital calls to the StepStone Funds.

In the event of failure of any such financial institutions, we cannot assure you that we, the StepStone Funds or any of their investments could access uninsured funds promptly or at all.

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A compromise or corruption of our systems or that of our vendors containing confidential information could damage our business relationships and adversely affect our business, financial condition and results of operations.

We collect, process and store rapidly increasing volumes of highly sensitive data, including our proprietary business information and intellectual property, and personally identifiable information of our employees, our clients and others, in our data centers and on our networks, and with our vendors, service providers and government agencies.

SPI Reporting includes funds, direct investments and co-investments that we monitor and report on for the StepStone Funds and advisory accounts.

We collect, process and store rapidly increasing volumes of highly sensitive data, including our proprietary business information and intellectual property, information relating to third party managers and their investment opportunities which we consider, and personally identifiable information of our employees, our clients and others, in our data centers and on our networks, including in our client portal, and with our vendors, service providers and government agencies.

SPI Reporting includes funds, direct investments and co-investments that we monitor and report on for the StepStone Funds and advisory accounts, and our client portal contains confidential client information.

The secure processing, maintenance and transmission of this information are critical to our operations.

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Cybersecurity risks and cybersecurity incidents could adversely affect our business by causing a disruption to our operations, which could adversely affect our financial condition and results of operations.

The frequency and sophistication of the cybersecurity threats and incidents we face continue to increase.

The frequency and sophistication of the cybersecurity threats and incidents we face continue to increase, including as a result of the advancement of AI, which malicious actors can use to create new, more sophisticated and more frequent attacks and to facilitate impersonation of personnel and third parties.

As a result, we face a heightened risk of a cybersecurity incident or disruption with respect to sensitive information resulting from an attack by computer hackers, foreign governments or cyber terrorists.

Our reputation and our ability to operate and expand our business depend on computer hardware and software systems, including our proprietary data and technology platforms and other data processing systems, which can be vulnerable to security breaches or other cyber incidents.

Our reputation and our ability to operate and expand our business depend on computer hardware and software systems, including our proprietary data and technology platforms, our client portal, and other data processing systems, which can be vulnerable to security breaches or other cyber incidents.

Our funds’ portfolio companies rely on similar systems and face similar risks, and such funds may invest in strategic assets having a national or regional profile or in infrastructure assets that face a greater risk of attack.

Cybersecurity incidents may be an intentional attack, such as a hacker attack, ransomware, virus or worm, or an unintentional event and could involve bad actors gaining unauthorized access to our information systems for purposes of misappropriating assets, disclosing or modifying sensitive or confidential information, corrupting data or causing operational disruption.

Cybersecurity incidents may be an intentional attack, such as a phishing, vishing or social engineering attack, hacker attack, ransomware or cyber extortion, virus or worm, or an unintentional event and could involve bad actors gaining unauthorized access to our information systems or those of our service providers for purposes of misappropriating assets, disclosing or modifying sensitive or confidential information, corrupting

data or causing operational disruption.

Cyber-criminals can attempt to redirect payments required to be paid at the closings of our investments to unauthorized accounts, which we or the services providers we retain, such as paying agents and escrow agents, may not be able to detect or protect against.

In recent years, there has been a significant increase in ransomware and other hacking attempts by cyber-criminals.

In recent years, there has been a significant increase in ransomware and other hacking attempts by cyber-criminals, including of our service providers.

The rapid evolution and increased availability of artificial intelligence may intensify cybersecurity risks by making such attacks and other cybersecurity incidents more difficult to detect, contain, and mitigate, including through the use of AI-facilitated impersonation and AI-related cyber events that are more automated, targeted and coordinated.

The costs related to cyber or other security threats or disruptions may not be fully insured or indemnified by others, including by our service providers.

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Cyber-incident techniques change frequently, may not immediately be recognized and can originate from a wide variety of sources.

We devote significant levels of funding and resources to comply with evolving cybersecurity regulations, including the SEC rules applicable to public companies as well as those proposed by the SEC with respect to investment advisers, and to monitor and enhance our information security procedures and controls.

We devote significant levels of funding and resources to comply with evolving cybersecurity regulations, including the SEC rules applicable to public companies, the SEC’s amendments to Regulation S-P with which we were required to comply by December 2025 (which impose operationally challenging notification requirements, deadlines and additional written policy and oversight expectations), as well as those rules proposed by the SEC with respect to investment advisers, and to monitor and enhance our information security procedures and controls.

We maintain insurance intended to cover certain cybersecurity events, but such insurance may not cover all risks and losses that we experience.

We also face cybersecurity risks associated with sensitive information provided to third parties.

We rely on third-party service providers for certain aspects of our business, including for certain information systems and technology, as well as administration of the StepStone Funds.

We rely on third-party service providers for certain aspects of our business, including for certain information systems and technology, as well as administration of, and legal services for, the StepStone Funds.

Additionally, each of the jurisdictions in which we operate may require us to provide sensitive information to government agencies, including biographical, financial and tax information relating to our personnel or investments.

The information systems of government agencies have previously been compromised and we believe they continue to be targets for cyber-criminals.

Third-party service providers and their vendors are also susceptible to cyber and security threats and incidents.

Any interruption or deterioration in the performance of these government agencies or third-party service providers, intentional or unintentional information security incidents caused by their personnel, failures of their information systems and technology or cyber and security breaches could put our sensitive information at risk or result in the shutdown of a service provider, and indemnification by, or insurance coverage of, such service providers may not be sufficient to cover any damage or loss, which could impair the quality of the funds’ operations and harm our reputation, thereby adversely affecting our business, financial condition and results of operations.

Third-party service providers and their vendors are also susceptible to, and have experienced, cyber and security threats and incidents.

Any interruption or deterioration in the performance of these government agencies or third-party service providers, intentional or unintentional information security incidents caused by their personnel, failures of their information systems and technology or cyber and security breaches could, and have, put our sensitive information at risk or result in the shutdown of a service provider, and indemnification by, or insurance coverage of, such service providers may not be sufficient to cover any damage or loss, which could impair the quality of the funds’ operations and harm our reputation, thereby adversely affecting our business, financial condition and results of operations.

We may also need to expend additional resources to adapt our cybersecurity program to the evolving security landscape and to investigate and remediate vulnerabilities or other identified risks.

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Any loss of sensitive information and failure to comply with these requirements or other applicable laws and regulations in this area, could result in significant regulatory non-compliance exposure or other penalties and legal liabilities.

The result of these adverse incidents can include the inability to provide services to our clients, other disruptions of our business, corruption or modifications to our data, fraudulent transfers or requests for transfers of money, liability for stolen assets or information, increased cybersecurity protection and insurance costs and litigation.

Risk related to emerging and changing technology, including artificial intelligence, could impact our results of operations or financial condition.

The result of these adverse incidents can include the inability to provide services to our clients, damage to our client or third party manager relationships, other disruptions of our business, corruption or modifications to our data, fraudulent transfers or requests for transfers of money, liability for stolen assets or information, increased cybersecurity protection and insurance costs and litigation, which could adversely affect our business, financial condition or results of operations.

Risk related to emerging and changing technology and corresponding regulations, including AI, could impact our results of operations or financial condition.

Our future success depends, in part, on our ability to anticipate and respond effectively to the risk of, and the opportunity presented by, digital disruption and other technology change.

These may include new applications based on artificial intelligence, machine learning, or new approaches to data mining.

Risks related to artificial intelligence, including our use of third-party products incorporating artificial intelligence, include the generation of factually incorrect or biased results, also known as hallucinations, data security vulnerabilities, potential IP infringement, mishandling of confidential, proprietary, or private information, and potentially problematic third-party license terms.

In addition, the SEC has proposed new rules on the use of artificial intelligence by investment advisers that, if enacted, could add to the compliance risks and burdens of using this technology.

Risks related to AI, including our use of third-party products incorporating artificial intelligence, include the generation of factually incorrect or biased results, also known as hallucinations, data security vulnerabilities, potential IP infringement, mishandling of confidential, proprietary, or private information, and potentially problematic third-party license terms.

The legal and regulatory landscape governing the use of AI is rapidly evolving in multiple jurisdictions, including the United States, the European Union and the United Kingdom.

In the United States, the SEC has established a task force and is evaluating the need for rules and regulations.

Future rules or guidance, as well as evolving examination and enforcement priorities, could increase the compliance risks and costs associated with using this technology.

In the European Union, the EU Artificial Intelligence Act introduces a risk-based regulatory framework for AI systems that may affect our operations or those of our service providers.

Non-compliance with these evolving AI regulations could subject us to regulatory enforcement actions, fines, reputational harm and increased compliance costs.

We may also be exposed to competitive risks related to the adoption and application of new technologies by established market participants or new entrants.

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business increases relative to our total business, these factors could have a more pronounced effect on our results of operations or growth prospects.

Investments of the StepStone Funds in certain jurisdictions may be subject to heightened risks relative to investments in other jurisdictions, which may adversely affect our business, financial condition and results of operations.

Investments of the StepStone Funds in certain jurisdictions may be subject to heightened risks, which may adversely affect our business, financial condition and results of operations.

A portion of the investments of the StepStone Funds and advisory accounts include private markets funds that are located in, or invest in portfolio companies located in, countries that are subject to heightened risks.

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(iii) differences in the capital markets of such countries, including, in some cases, the absence of uniform accounting, auditing, financial reporting and legal standards, practices and disclosure requirements and less government supervision and regulation;

(iv) certain economic, social and political risks, including exchange control regulations and restrictions on foreign investments and repatriation of capital, and the risks of political, economic or social instability;

and (v) the possible imposition of taxes with respect to such investments or confiscatory taxation.

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We will need to continue to invest in our human resources and our infrastructure as a result of the increasingly complex investment management industry, increasing sophistication of clients and our expansion into new jurisdictions.

In addition, our newer private wealth platform has and will require ongoing development of new infrastructure.

In addition, our private wealth platform has and will require ongoing development of new infrastructure.

Legal and regulatory developments, including increasing levels of regulation outside of the United States, also contribute to the increasing level of our expenses.

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In addition, certain aspects of our cost structure, such as costs for compensation, occupancy and equipment rentals, communication and information technology services, and depreciation and amortization will be largely fixed, and we may not be able to timely adjust these costs to match fluctuations in revenue related to growing our business or entering into new lines of business.

In addition, changes in rules and regulations that reduce risks in certain lines of business may increase competition in those markets, reducing our ability to earn sufficient fees.

If a new business generates insufficient revenue or if we are unable to efficiently manage our expanded operations, our business, financial condition and results of operations could be materially and adversely affected.

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As of March 31, 2026, based on the fair value of the liability classified awards, the estimated minimum and maximum amount of cash that would be potentially payable to settle the liability in the event of a call or put was $564.4 million and $2,257.6 million, respectively.

The assumptions used in the fair value analysis are inherently subjective;

Certain assumptions used in determining the fair value are inherently subjective;

therefore, the ultimate settlement amount for the liability classified awards may differ materially from the current estimate.

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Difficult or volatile market and political conditions can adversely affect our business by reducing the market value of the assets we manage, causing our clients to reduce their investments in private markets, reducing the number of high-quality investment managers with whom we may invest, and reducing the ability of our funds to raise or deploy capital.

The global financial markets and business climate have recently deteriorated and may continue to deteriorate, including due to continued rising interest rates, ongoing high inflation, reduced availability of credit, regional and international bank failures, changes in laws and regulation, trade policies, terrorism or political uncertainty, war (including the ongoing Russia-Ukraine and Middle East conflicts), and potential recession.

The global financial markets and business climate have recently deteriorated and may continue to deteriorate, including due to continued rising interest rates, ongoing high inflation, reduced availability of credit, regional and international bank failures, changes in laws and regulation, trade policies, such as tariffs or other protectionist measures and retaliatory measures, terrorism or political uncertainty, war (including the ongoing Russia-Ukraine and Middle East conflicts), and potential recession.

For example, while inflation in the U.S.

has stabilized, it remains higher than pandemic levels and could increase.

In addition, heightened competition for workers, supply chain issues and rising energy and commodity prices have contributed to increasing wages and other inputs, which may put pressure on the profit margins of portfolio companies within our private market funds.

Additionally, volatility and disruption in the equity and credit markets can adversely affect the portfolio companies in which private markets funds invest and adversely affect the investment performance of the StepStone Funds and advisory accounts.

In addition, heightened competition for workers, supply chain issues, tariffs and rising energy and commodity prices have contributed to increasing wages and other inputs, which may put pressure on the profit margins of portfolio companies within our private market funds.

Additionally, volatility and disruption in the equity and credit markets, including the concentration of public-market valuations in a limited number of sectors such as AI-related companies or those companies whose strategies are more directly and negatively affected by AI, can adversely affect the portfolio companies in which private markets funds invest and adversely affect the investment performance of the StepStone Funds and advisory accounts.

The extent and impact of any sanctions imposed in connection with geopolitical conflicts may also cause additional financial market volatility and impact the global economy.

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The restrictions on investment in and trade with China may have a negative effect on some of our portfolio companies along with creating weakness in the global economy.

The recent escalations of conflicts in the Middle East have the potential to negatively affect supply chains beyond oil and gas, also affecting many derivative and byproducts such as fertilizer, helium, sulfur, etc., negatively impacting portfolio companies in various industries.

In addition, heightened geopolitical tensions in the Taiwan Strait and other regions could result in significant disruption to global supply chains, particularly with respect to semiconductors and other business-critical products, which could adversely affect portfolio company operations and valuations.

Our ability to manage our exposure to market conditions is limited.

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See “—Evolving laws and government regulations could adversely affect us.”

A major public health crisis, such as COVID-19 pandemic or a similar pandemic, could again severely disrupt the global financial markets and business climate and adversely affect our business, financial condition and results of operations.

A major public health crisis could severely disrupt the global financial markets and business climate and adversely affect our business, financial condition and results of operations.

A major public health crisis can have unpredictable and adverse impacts on global, national and local economies.

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For example, such disruptions have adversely affected, and in the future could again adversely affect, our ability to effectively identify, monitor, make or dispose of investments.

Additionally, while restrictions have generally been lifted globally, and the World Health Organization has declared the end of the COVID-19 global health emergency, the COVID-19 pandemic contributed, and any future public health crisis could contribute, to extreme volatility in financial markets.

Additionally, any future public health crisis could contribute to extreme volatility in financial markets.

Such volatility could adversely affect the business of StepStone and the StepStone Funds and the portfolio companies in which they invest, all of which could have material and adverse effect on our performance.

We operate in a heavily regulated industry and any failure to comply with the government regulations to which we are subject could adversely affect us.

We operate in an industry subject to numerous regulations and any failure to comply with government regulations to which we are subject could adversely affect us.

We are subject to numerous regulations that may impact our business model.

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A failure to comply with the obligations imposed by the Investment Advisers Act could result in investigations, sanctions and reputational damage, and could materially and adversely affect our business, financial condition, results of operations and business reputation.

The SEC has increased its regulation and scrutiny of the asset management and private equity industries in recent years, focusing on the private equity industry’s fees, allocation of expenses to funds, allocation of fund investment opportunities, disclosures to clients, the allocation of broken-deal expenses, the management of conflicts of interest disclosures, valuation practices and other fiduciary obligations.

The SEC has also recently fined financial services firms, including investment advisers, for insufficient monitoring of off-channel communications.

The SEC has continued its close scrutiny of the asset management and private equity industries, focusing on private equity fees, expen se allocations, investment allocations, client disclosures, broken-deal expenses, conflicts of interest, valuation practices and other fiduciary obligations.

The lack of readily ascertainable market prices for many of the investments made by the StepStone Funds or the funds in which we invest could subject our valuation policies and processes to increased scrutiny by the SEC.

In May 2024, the SEC adopted amendments to Regulation S-P (the privacy regulations applicable to financial institutions, including investment advisers) that will expand the scope of the regulation and mandate notification to clients and customers in the event of privacy breaches.

The SEC has also focused on the “retailization” of private equity.

Although it supports expanding retail investor access to private equity and other private markets products, it has emphasized that such access should occur through regulated structures and with enhanced safeguards for less sophisticated investors.

As we continue to grow our distribution of funds targeted at private wealth investors we may face increased regulatory and compliance risk.

In May 2024, the SEC adopted amendments to Regulation S-P (the privacy regulations applicable to financial institutions, including investment advisers) that expanded the scope of the regulation and mandate notification to clients and customers in the event of privacy breaches.

These amendments, with which we were required to comply by December 2025, impose operationally challenging notification requirements and deadlines, and require additional written policies and oversight procedures.

The SEC has also adopted disclosure rules related to cybersecurity applicable to public companies.

In addition, the SEC and FinCEN have recently jointly adopted a new rule that will require investment advisers to adopt formal anti-money laundering and customer identification programs by the end of 2025.

Bringing our firm into compliance with these new rules (and any others adopted by the SEC), could result in a significant increase in the compliance risks and regulatory burden of operating our business.

In addition, the SEC and FinCEN jointly adopted a new rule requiring investment advisers to adopt formal anti-money laundering and customer identification programs.

In June 2025, the U.S.

Department of Justice adopted a rule restricting certain bulk sensitive personal data transfers and access involving countries of concern, which may further increase our compliance obligations.

Bringing our firm into compliance with these new rules (and any others adopted by the SEC or other governmental authorities), could result in a significant increase in the compliance risks and regulatory burden of operating our business.

Our failure to comply with applicable laws or regulations could result in fines, suspensions of personnel or other sanctions, including revocation of our registration as an investment adviser.

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As noted in “Business—Regulatory Environment—Foreign Regulation,” we provide investment advisory and other services and raise funds in a number of countries and jurisdictions outside the United States.

We continue to assess the impact of evolving regulatory developments outside of the United States on our business including, but not limited to, the revised EU regime for alternative investment fund managers, the new EU anti-money laundering and counter-terrorist financing regime, EU rules relating to digital operational resilience for the financial sector and the new EU framework for the collation and publication of sustainability information in annual reporting.

We continue to assess the impact of evolving regulatory developments outside of the United States on our business including, but not limited to, the revised EU regime for alternative investment fund managers, the new EU anti-money laundering and counter-terrorist financing regime, EU rules relating to digital operational resilience for the financial sector (including the EU Digital Operational Resilience Act (“DORA”)), the U.K.

Data (Use and Access) Act 2025, and the new EU framework for the collation and publication of sustainability information in annual reporting.

These and other evolving privacy, cybersecurity and AI regimes may increase our compliance burden and affect our distribution and operations.

In addition, the European Union’s General Data Protection Regulation (the “GDPR”) and the California Consumer Privacy Act (“CCPA”) impose stringent data protection requirements, and we are also subject to additional national and state privacy laws.

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Our private wealth investment platform is subject to additional regulatory requirements that could adversely impact its profitability.

We have been expanding our offerings to individual investors, including through our private wealth platform, and intend to continue doing so.

Expanding our product offerings to individual investors may subject us to increased litigation, regulatory enforcement and compliance risks, given that individual investors are generally afforded greater regulatory protections than institutional investors, may have less sophistication or experience with private markets investments, and may be more likely to bring claims or complaints.

The operational

complexity, administration and accounting requirements associated with servicing individual investors, including in non-U.S.

jurisdictions, may also be greater than those for institutional investors.

funds we offer to private wealth investors are registered investment companies or business development companies under the Investment Company Act (the “Registered Funds”) and we expect that additional funds we offer will also be Registered Funds under the Investment Company Act or applicable laws in other jurisdictions.

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In addition, we depend on third parties to assist us in complying with regulatory obligations with respect to our Registered Funds.

With respect to non-traded products offered to individual investors, we may be subject to risk arising from increased participation in share repurchase programs or tender offers, which could adversely affect fund liquidity and our ability to manage such products effectively.

Requirements imposed by the Investment Company Act, including limitations on capital structure, the ability to transact business with affiliates and the ability to compensate senior employees, or the failure of our third-party vendors to assist us with required compliance could materially and adversely affect our businesses, financial condition and results of operations.

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Ongoing political developments could adversely impact our investment management and investment advisory businesses.

The financial services industry is currently experiencing an uncertain political and regulatory environment, under the newly appointed U.S.

The financial services industry is currently experiencing an uncertain political and regulatory environment, under the current U.S.

presidential administration.

While there is currently a regulatory freeze on rulemaking pending review by newly appointed agency heads, the current administration has signaled its intent to revisit and potentially roll back certain regulatory initiatives enacted under the previous administration while simultaneously increasing scrutiny on areas such as foreign investment, national security, and the use of emerging technologies.

The administration has signaled its intent to revisit and potentially roll back certain regulatory initiatives enacted under the previous administration while simultaneously increasing scrutiny on areas such as foreign investment, national security, and the use of emerging technologies.

The current administration and the current leadership of the SEC have indicated that they intend to modify or repeal certain regulations perceived as burdensome to private fund advisers, particularly those related to sustainability investing and cybersecurity.

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The failure to accurately predict the possible outcome of policy changes and regulatory reform could have a material adverse effect on the returns generated from our funds’ investments and our revenues.

Recently, the United States has imposed tariffs on various products imported into the United States.

The United States has imposed tariffs on various products imported into the United States.

These tariffs have resulted in, and may continue to trigger, retaliatory actions by affected countries, including the imposition of tariffs on the United States by other countries.

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If we do not adequately monitor and adapt sufficiently to changes in policy and the regulations to which we are or may become subject, we could be subject to enforcement actions, which may materially and adversely affect our businesses, financial condition and results of operations.

On March 30, 2026, the DOL proposed a rule establishing a process based “safe harbor” for plan fiduciaries selecting designated investment alternatives for participant directed defined contribution plans.

If adopted, the rule could facilitate an ability for individuals to allocate a portion of their 401(k) investments in alternative assets, such as private equity and private credit, as well as real estate.

However, we may encounter significant competition from products tailored for 401(k) plan distribution, and if we, or our service providers, cannot meet plan fiduciaries’ process expectations, or if products designed for this channel underperform or do not meet plan participants’ investment needs, plan fiduciaries may exclude or remove such offerings from investment options, which could negatively impact our business, financial condition and results of operations.

Future changes to tax laws or our effective tax rate could materially adversely affect our company and reduce net returns to our stockholders.

Our tax treatment is subject to the enactment of, or changes in, tax laws, regulations and treaties, or the interpretation thereof, tax policy initiatives and reforms under consideration and the practices of tax authorities in jurisdictions in which we operate, including those related to the Base Erosion and Profit Shifting (“BEPS”) Project of the Organisation for Economic Co-Operation and Development (“OECD”), the European Commission’s state aid investigations and other initiatives.

of the Organisation for Economic Co-Operation and Development (“OECD”), the European Commission’s state aid investigations and other initiatives.

Such changes may include (but are not limited to) the taxation of operating income, investment income, dividends received or (in the specific context of withholding tax) dividends paid, or the taxation of partnerships and other passthrough entities.

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Congress and Treasury Department and other government agencies in jurisdictions where we and our affiliates do business have focused on issues related to the taxation of multinational corporations, including, but not limited to, transfer pricing, country-by-country reporting and base erosion.

The OECD also recently finalized guidelines that recommend certain multinational enterprises be subject to a minimum 15% tax rate, effective from 2024.

The OECD has finalized guidelines under the Pillar Two framework that recommend certain multinational enterprises be subject to a minimum 15% tax rate, effective from 2024, and many jurisdictions have enacted, or are in the process of enacting, rules intended to implement these standards.

In January 2026, the OECD Inclusive Framework released a “Side-by-Side Package,” which is intended to facilitate coordination of the Pillar Two global minimum tax with existing U.S.

and other domestic tax regimes and includes, among other items, a permanent simplified effective tax rate safe harbor, an extension of the transitional country-by-country reporting safe harbor and a substance-based tax incentive safe harbor.

In addition, all member states of the European Union have enacted Pillar Two rules.

The United States has not adopted domestic Pillar Two rules, and the current U.S.

administration has signaled opposition to aspects of Pillar Two, including the “undertaxed profits rule” (“UTPR”), which some foreign jurisdictions may apply in a manner that could increase the tax burden and compliance requirements of U.S.-parented groups.

Foreign jurisdictions’ implementation of the UTPR could raise compliance complications for us and our operating entities and investments.

This minimum tax and several of the proposed measures are potentially relevant to some of our operating entities and investments and could have an adverse tax impact on our funds, investors and/or our funds’ portfolio companies.

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While we have developed and implemented policies and procedures designed to promote strict compliance by us and our personnel with the FCPA and other anti-corruption, sanctions and export control laws in jurisdictions in which we operate, such policies and procedures may not be effective in all instances to prevent violations.

Any determination that we have violated the FCPA or other applicable anti-corruption, sanctions or export control laws could subject us to, among other things, civil and criminal penalties, material fines, profit disgorgement, injunctions on future conduct, securities litigation and a general loss of client confidence, any one of which could adversely affect our business prospects, financial condition and results of operations.

Any determination that we have violated the

FCPA or other applicable anti-corruption, sanctions or export control laws could subject us to, among other things, civil and criminal penalties, material fines, profit disgorgement, injunctions on future conduct, securities litigation and a general loss of client confidence, any one of which could adversely affect our business prospects, financial condition and results of operations.

In addition, we are subject to the UK Economic Crime and Corporate Transparency Act 2023 (“ECCTA”), which makes fundamental changes to the UK’s approach to tackling financial crime.

Most significantly, ECCTA introduces new law governing the attribution of criminal liability to corporate entities, which came into force on December 26, 2023, and a new corporate offense of failure to prevent fraud, which will come into force on September 1, 2025.

Guidance relating to the offense of failure to prevent fraud was published on November 6, 2024.

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We provide investment advisory and other services and raise funds in a number of countries and jurisdictions outside the United States.

In a number of these countries and jurisdictions, which include the UK, the EU, the EEA, Switzerland, Japan, Korea, Canada, Brazil, and Singapore, our operations, and in some cases our personnel, are subject to regulatory oversight and affirmative requirements.

In a number of these countries and jurisdictions, which include the UK, the EU, the EEA, Switzerland, Japan, Korea, Canada, Colombia, Chile, Mexico, Saudi Arabia, and Singapore, our operations, and in some cases our personnel, are subject to regulatory oversight and affirmative requirements.

These requirements variously relate to registration, licenses for our personnel, periodic inspections, the provision and filing of periodic reports, and obtaining certifications and other approvals.

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Compliance with MiFID II has, therefore, resulted in greater overall complexity, higher compliance, administration and operational costs, and less overall flexibility.

There have also been significant legislative developments affecting the private equity industry in Europe and there continues to be discussion regarding enhancing governmental scrutiny and/or increasing regulation of the private equity industry, which may have an adverse impact on the private equity industry in Europe (including by making it more difficult to raise capital from certain types of investors and otherwise imposing on private equity funds additional and costly regulatory compliance burdens), which could in turn adversely affect our business prospects, financial condition and results of operations.

These laws and regulations may affect our costs and manner of conducting business in one or more markets, the risks of doing business, the assets that we manage or advise, and our ability to raise capital from clients.

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We are subject to divergent views of investors and differing approaches by governmental authorities in respect of the incorporation of sustainability-related factors in our investment and portfolio management process as well as human capital management, which may affect certain investors’ decision to commit or recommit capital to, or constrain investment opportunities for, our funds or subject us to increased regulatory scrutiny and compliance costs.

In recent years, certain investors have placed increasing importance on sustainability implications of investments made by private equity and other funds to which they commit capital.

Certain investors have also demonstrated increased activism with respect to existing investments, including by urging asset managers to take certain actions that could adversely affect the value of an investment, or refrain from taking certain actions that could improve the value of an investment.

In recent years, certain investors have placed increasing importance on sustainability implications of private markets investments to which they commit capital.

Certain investors have also demonstrated increased advocacy with respect to existing investments, including by urging asset managers to take certain actions that could adversely affect the value of an investment, or refrain from taking certain actions that could improve the value of an investment.

At times, clients have conditioned future capital commitments on the taking or refraining from taking of such actions.

Such clients’ focus and activism related to sustainability and similar matters may constrain investment opportunities we evaluate for them.

Such clients’ focus and advocacy related to sustainability and similar matters may constrain investment opportunities we evaluate for them.

In addition, institutional clients may decide to not commit capital to future fundraises as a result of their assessment of our approach to and consideration of the sustainability-related cost of investments made by us.

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The initiative covers all federal-funding recipients or contractors that certify compliance with civil rights laws, and will involve collaboration among federal and state law enforcement agencies.

The memorandum directs divisions within the DOJ to establish partnerships with state attorneys general and local law enforcement to share information and coordinate enforcement activities and further highlights that Congress authorized private parties to litigate FCA claims and to share in any monetary recovery.

authorized private parties to litigate FCA claims and to share in any monetary recovery.

A number of our contracts with state pensions require us to comply with all applicable state and federal laws and regulations.

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In the likely event that divergent sustainable investing disclosure obligations arise between the U.S., UK and the EU, this may also present an increased compliance risk if we are required to comply with different regulatory standards.

In the U.S., California passed legislation relating to greenhouse gas emissions, climate-related financial risk, and climate-related emissions claims and other states have proposed similar legislation, although the current U.S.

In the U.S., the SEC adopted climate-related disclosure rules for public companies;

however, such rules have been subject to litigation, and the SEC has elected to end its defense of such rules and stayed their implementation.

Furthermore, the SEC recently indicated that it has initiated steps to rescind the rules.

Additionally, California enacted SB 253 and SB 261, which impose climate reporting requirements, including requirements related to greenhouse gas emissions and climate-related financial risk.

Certain provisions of these California statutes have been the subject of judicial challenge, including an injunction issued with respect to SB 261, and the ultimate scope and enforceability of these requirements remain uncertain.

Other states have proposed similar legislation, although the current U.S.

presidential administration has identified deregulation of greenhouse gas emissions as a priority, including at the state level.

Additionally, a lack of harmonization globally in relation to sustainability and corporate responsibility-related legal and regulatory reform leads to a risk of fragmentation in group level priorities across global jurisdictions.

Additionally, a lack of harmonization globally in relation to sustainability and corporate responsibility-related legal and regulatory reform, combined with ongoing revisions in many of the regulations noted above, leads to a risk of fragmentation in group level priorities across global jurisdictions.

This may create conflicts across our global business which could risk inhibiting our future implementation of, and compliance with, rapidly developing standards and requirements.

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Moreover, positions we take or do not take on social issues may be unpopular with some of our employees or with our clients or potential clients, which may in the future impact our ability to attract or retain employees or clients.

While we strive to implement sustainability practices, there can be no assurance that we will be able to identify all sustainability and corporate responsibility issues or will be able to successfully implement our sustainability and corporate responsibility policies.

While we strive to implement sustainability practices, there can be no assurance that

we will be able to identify all sustainability and corporate responsibility issues or will be able to successfully implement our sustainability and corporate responsibility policies.

In addition, the use of sustainability and corporate responsibility metrics in the investment process could be subjective and they are not subject to uniform standards, and, as such, there is no guarantee that we will be able to accurately assess and measure the sustainability and corporate responsibility risks and compliance of its investments and potential investments.

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Risks Related to Our Organizational Structure

We are currently a “controlled company” within the meaning of the Nasdaq Global Select Market listing standards and, as a result, qualify for, and rely on, exemptions from certain corporate governance requirements.

You will not have the same protections afforded to stockholders of companies that are subject to such requirements for as long as we qualify for such exemptions.

Holders of our Class B common stock continue to control a majority of the voting power of our outstanding common stock.

So long as no Sunset (as defined below) has occurred and the Class B stockholders who are party to the Stockholders’ Agreement hold at least approximately 16.7% of all of the outstanding shares of the Company’s common stock, the Class B stockholders are expected to hold a majority of the Company’s outstanding voting power and thereby will control the outcome of matters submitted to a stockholder vote.

As a result of the voting power held by those Class B stockholders who are party to the Stockholders’ Agreement, we currently qualify as a “controlled company” within the meaning of the corporate governance standards of the Nasdaq Global Select Market.

Under these rules, a listed company of which more than 50% of the voting power with respect to the election of directors is held by an individual, group or another company is a “controlled company” and may elect not to comply with certain corporate governance requirements, including the requirement that (i) a majority of our board of directors consist of independent directors, (ii) director nominees be selected or recommended to the board entirely by independent directors and (iii) the compensation committee be composed entirely of independent directors.

A “Sunset” is triggered upon the earliest to occur of the following:

(i) Monte Brem, Scott Hart, Jason Ment, Jose Fernandez, Johnny Randel, Michael McCabe, Mark Maruszewski, Thomas Keck, Thomas Bradley, David Jeffrey and Darren Friedman (including their respective family trusts and any other permitted transferees, the “Sunset Holders”) collectively cease to maintain direct or indirect beneficial ownership of at least 10% of the outstanding shares of Class A common stock (determined assuming all outstanding Class B units have been exchanged for Class A common stock);

(ii) the Sunset Holders cease collectively to maintain direct or indirect beneficial ownership of an aggregate of at least 25% of the aggregate voting power of our outstanding Class A common stock and Class B common stock, before giving effect to a Sunset;

and (iii) September 18, 2025.

At this time, the Company anticipates that the Sunset will occur on September 18, 2025.

We rely on and intend to continue to rely on some or all of these exemptions.

As a result, we do not have a majority of independent directors, our compensation committee does not consist entirely of independent directors and our directors will not be nominated or selected entirely by independent directors.

Accordingly, you will not have the same protections afforded to stockholders of companies that are subject to all of the corporate governance requirements of the Nasdaq Global Select Market, until we are no longer a controlled company and phase-in periods for compliance with non-controlled company governance provisions under Nasdaq rules have expired.

We were previously a “controlled company” within the meaning of the Nasdaq Global Select Market listing standards and, as a result, we qualified for, and relied on, exemptions from certain corporate governance requirements.

As of September 18, 2025, we are no longer a “controlled company” under Nasdaq rules and are required to comply with Nasdaq’s applicable corporate governance requirements no later than September 18, 2026.

Unless and until we are fully compliant with such requirements, you will not have the same protections afforded to stockholders of companies that are subject to such requirements.

Prior to September 18, 2025, we qualified as a “controlled company” within the meaning of the corporate governance standards of the Nasdaq Global Select Market, and, consequently, we previously qualified for, and relied on, certain exemptions from corporate governance requirements, including the requirements that (i) a majority of our board of directors consist of independent directors, (ii) director nominees be selected or recommended to the board entirely by independent directors and (iii) the compensation committee be composed entirely of independent directors.

However, as of September 18, 2025, we are no longer a controlled company and thus these exemptions are no longer available to us, and we are required to come into compliance with Nasdaq’s corporate governance requirements no later than September 18, 2026.

We do not currently satisfy all of Nasdaq’s corporate governance requirements applicable to non-controlled companies, and, accordingly, we must take actions to achieve compliance by September 18, 2026.

We currently do not have a majority of independent directors, our compensation committee does not consist entirely of independent directors, and our directors will not be nominated or selected entirely by independent directors.

Accordingly, unless and until we have fully implemented changes necessary to comply with Nasdaq’s corporate governance requirements, you will not have the same protections afforded to stockholders of companies that are subject to, and compliant with, all of the corporate governance requirements of the Nasdaq Global Select Market.

SSG depends on distributions from the Partnership to pay any dividends, if declared, taxes and other expenses, including payments under the Tax Receivable Agreements.

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Each Tax Receivable Agreement provides that if (i) SSG exercises its right to early termination of such Tax Receivable Agreement in whole (that is, with respect to all benefits due to all beneficiaries under such Tax Receivable Agreement) or in part (that is, with respect to some benefits due to all beneficiaries under such Tax Receivable Agreement), (ii) SSG experiences certain changes in control, (iii) such Tax Receivable Agreement is rejected in certain bankruptcy proceedings, (iv) SSG fails (subject to certain exceptions) to make a payment under such Tax Receivable Agreement within 180 days after the due date or (v) SSG materially breaches its obligations under such Tax Receivable Agreement, SSG will be obligated to make an early termination payment to holders of rights under such Tax Receivable Agreement equal to the present value of all payments that would be required to be paid by SSG under such Tax Receivable Agreement.

The amount of such payments will be determined on the basis of certain assumptions in each Tax Receivable Agreement, including (i) the assumption that SSG would have enough taxable income in the future to fully utilize the tax benefit resulting from the tax assets that are the subject of such Tax Receivable Agreement, (ii) the assumption that any item of loss deduction or credit generated by a basis adjustment or imputed interest arising in a taxable year preceding the taxable year that includes an early termination will be used by SSG ratably from such taxable year through the earlier of (x) the scheduled expiration of such tax item or (y) 15 years;

The amount of such payments will be determined on the basis of certain assumptions in each Tax Receivable Agreement, including (i) the assumption that SSG would have

enough taxable income in the future to fully utilize the tax benefit resulting from the tax assets that are the subject of such Tax Receivable Agreement, (ii) the assumption that any item of loss deduction or credit generated by a basis adjustment or imputed interest arising in a taxable year preceding the taxable year that includes an early termination will be used by SSG ratably from such taxable year through the earlier of (x) the scheduled expiration of such tax item or (y) 15 years;

(iii) in the case of the Reorganization Tax Receivable Agreement, the assumption that any net operating loss (and similar items) inherited from certain pre-IPO institutional investors (the “Blocker Companies”), will be used by SSG ratably from the taxable year that includes an early termination through the earlier of (x) the scheduled expiration of such net operating loss (or similar item) or (y) 15 years (or longer, to the extent that SSG is prevented from fully utilizing such net operating loss (or similar item) under certain U.S.

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Because tax distributions will be determined based on the partner who is allocated the largest amount of taxable income on a per unit basis and on an assumed tax rate that is the highest possible rate applicable to any partner, but will be made pro rata based on ownership of Partnership units, the Partnership will be required to make tax distributions that, in the aggregate, will likely exceed the amount of taxes that it would have paid if it were taxed on its net income at the assumed rate.

In addition, changes to the deductibility of compensation under Section 162(m), including rules that may expand the scope of covered employees and aggregation across affiliated groups, could reduce deductible compensation and increase taxable income allocable to the Partnership and SSG, which could increase the amount of required tax distributions.

Funds used by the Partnership to satisfy its tax distribution obligations will not be available for reinvestment in our business.

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Pursuant to the regulations with respect to Section 162(m) of the Code issued by the IRS, SSG will not be permitted to deduct its distributive share of compensation expense allocated to it, to the extent that such distributive share plus the amount of any compensation paid directly by SSG exceeds $1,000,000 with respect to a covered employee, even if the Partnership, rather than SSG, pays the compensation to SSG’s covered employees.

In addition, for tax years beginning after December 31, 2025, changes to affiliated group aggregation rules may increase the number of individuals whose compensation is subject to the $1,000,000 limitation, which could increase the amount of compensation expense that is non-deductible to SSG.

Accordingly, to the extent that SSG is disallowed a deduction for its distributive share of compensation expense under Section 162(m) of the Code, it may result in additional U.S.

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to be deemed to be an investment company under the Investment Company Act, requirements imposed by the Investment Company Act, including limitations on our capital structure, ability to transact business with affiliates (including us) and ability to compensate key employees, could make it impractical for us to continue our business as currently conducted, impair the agreements and arrangements between and among the Partnership, the General Partner, us or our senior leadership team, or any combination thereof and materially and adversely affect our business, financial condition and results of operations.

A change of control of our company, including the effect of a “Sunset,” could result in an assignment of our investment advisory agreements.

A change of control of our company could result in an assignment of our investment advisory agreements.

Under the Investment Advisers Act, each of the investment advisory agreements for the funds and other accounts we manage must provide that it may not be assigned without the consent of the particular fund or other client.

An assignment may occur under the Investment Advisers Act if, among other things, the Partnership undergoes a change of control.

After a “Sunset” becomes effective (which the Company currently anticipates will occur on September 18, 2025), the Class B common stock will have one vote per share instead of five votes per share, and the Stockholders Agreement will expire, meaning that the Class B stockholders will no longer have the right to control the appointment of directors or to direct the vote on all matters that are submitted to our stockholders for a vote.

As of September 18, 2025, the Class B common stock no longer has the right to control the appointment of directors or to direct the vote on all matters that are submitted to our stockholders for a vote.

If a third party acquired a sufficient number of shares to be able, alone or with others, to control the appointment of directors and other matters submitted to our stockholders for a vote, there could be deemed a change of control of the Partnership, and thus an assignment.

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Because members of our senior leadership team hold their economic interest through other entities, conflicts of interest may arise between them and the holders of our Class A common stock or with us.

The Sunset Holders, who are members of our senior leadership team, beneficially owned

approximately 27.1% of the outstanding Partnership units as of March 31, 2025.

Because they hold their economic interest in the Partnership directly, the members of our senior leadership team may have interests that do not align with, or conflict with, those of the holders of Class A common stock or with us.

Certain members of our senior leadership team hold significant economic interest in the Partnership directly, and as a result, they may have interests that do not align with, or conflict with, those of the holders of Class A common stock or with us.

For example, members of our senior leadership team will have different tax positions from Class A common stockholders, which could influence their decisions regarding whether and when to dispose of assets, whether and when to incur new or refinance existing indebtedness, and whether and when to terminate either Tax Receivable Agreement and accelerate the obligations thereunder.

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If control over these subsidiaries and their operations is exerted less effectively by StepStone, our ability to conduct our business and our results of operations may be adversely affected.

The disparity in the voting rights among the classes of our common stock and inability of the holders of our Class A common stock to influence decisions submitted to a vote of our stockholders may have an adverse effect on the price of our Class A common stock.

Holders of our Class A common stock and Class B common stock vote together as a single class on almost all matters submitted to a vote of our stockholders.

Shares of our Class A common stock and Class B common stock entitle the respective holders to identical non-economic rights, except that each share of our Class A common stock entitles its holder to one vote on all matters to be voted on by stockholders generally, while each share of our Class B common stock entitles its holder to five votes on all matters to be voted on by stockholders generally until a Sunset becomes effective.

After a Sunset becomes effective (which the Company currently anticipates will occur on September 18, 2025), each share of our Class B common stock will entitle its holder to one vote.

Certain of the holders of our Class B common stock have agreed to vote all of their shares in accordance with the instructions of the Class B Committee, and therefore will exercise control over all matters requiring the approval of our stockholders, including the election of our directors and the approval of significant corporate transactions.

The difference in voting rights could adversely affect the value of our Class A common stock to the extent that investors view, or any potential future purchaser of our company views, the superior voting rights and implicit control of the Class B common stock to have value.

Distributions made by the Partnership to us may be substantial, and our ability to use the cash we receive in such distributions may be limited.

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The dual class structure of our common stock may adversely affect the trading market for our Class A common stock.

Several stockholder advisory firms and large institutional investors oppose the use of multiple class structures.

We have a dual class structure, with shares of Class A common stock and Class B common stock outstanding.

Although our Class B common stock currently has one vote per share, and therefore does not provide its holders with a disproportionate voting multiple relative to our Class A common stock, certain stockholder advisory firms, institutional investors and other market participants may nonetheless disfavor, or have policies that discourage investment in, companies with multiple classes of common stock.

As a result, the dual class structure of our common stock may cause stockholder advisory firms to publish negative commentary about our corporate governance practices or otherwise seek to cause us to change our capital structure and may result in large institutional investors not purchasing shares of our Class A common stock.

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We currently pay dividends to our stockholders, but our ability to do so is subject to the discretion of our board of directors and may be limited by our holding company structure and applicable provisions of Delaware law.

In addition, any repurchases of our Class A common stock are discretionary and may be limited by applicable legal requirements and other considerations.

We have paid quarterly cash dividends consistently since the fourth quarter of fiscal 2021and have occasionally declared supplemental dividends.

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If, as a consequence of these various limitations and restrictions, we are unable to generate sufficient distributions from our business, we may not be able to make, or may be required to reduce or eliminate, the payment of dividends on our Class A common stock.

In addition, we may, from time to time, repurchase shares of our Class A common stock pursuant to repurchase authorizations, including our stock repurchase program adopted in March 2026 authorizing the repurchase of up to $100 million of our Class A common stock.

The timing and amount of any repurchases are determined at the discretion of our management based on business, economic and market conditions, including the availability of capital, other capital allocation alternatives and prevailing stock prices, as well as applicable legal requirements and other considerations.

The stock repurchase program may be modified, suspended or discontinued at any time, and does not obligate us to acquire any amount of stock.

Any stock repurchases could reduce the cash available for dividends and other corporate purposes.

General Risk Factors

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During fiscal 2026, the closing price of our Class A common stock ranged from a low of $42.46, and to a high closing price of $76.27.

The closing price of our Class A common stock ranged from a low of $42.46, and to a high of $59.56 through May 21, 2025.

The closing price of our Class A common stock ranged from a low of $45.91, and to a high of $56.31, from April 1, 2026 through May 20, 2026.

The price of our Class A common stock may continue to be volatile in the future.

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Anti-takeover provisions in our charter documents and under Delaware law could make an acquisition of us more difficult, limit attempts by our stockholders to replace or remove our current management and may adversely affect the market price of our Class A common stock.

Provisions in our amended and restated certificate of incorporation and bylaws may have the effect of delaying or preventing a change of control or changes in our management.

Our amended and restated certificate of incorporation and bylaws include provisions that:

Provisions in our restated certificate of incorporation and bylaws may have the effect of delaying or preventing a change of control or changes in our management.

Our restated certificate of incorporation and bylaws include provisions that:

• provide that vacancies on our board of directors shall be filled only by a majority of directors then in office, even though less than a quorum, or by a sole remaining director;

• establish that our board of directors is divided into three classes, with each class serving three-year staggered terms, subject to a specified Sunset;

• provide that our directors can be removed (i) for cause only as long as our board of directors is classified and (ii) following such time as our board of directors is no longer classified, with or without cause, but only upon the affirmative vote of holders of at least 66 2⁄3% of the voting power of the outstanding shares of our capital stock entitled to vote generally in the election of directors;

• provide that our directors can be removed with or without cause, but only upon the affirmative vote of holders of at least 66 2⁄3% of the voting power of the outstanding shares of our capital stock entitled to vote generally in the election of directors;

• provide that any action required or permitted to be taken by the stockholders must be effected at a duly called annual or special meeting of stockholders and may not be effected by any consent in writing in lieu of a meeting of such stockholders;

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• authorize our board of directors to issue, without further action by the stockholders, shares of undesignated preferred stock;

• reflect two classes of common stock, with Class B common stock having five votes per share and Class A common stock having one vote per share, until a Sunset becomes effective, as discussed above.

• reflect two classes of common stock, as discussed above.

These and other provisions may frustrate or prevent any attempts by our stockholders to replace or remove our current management by making it more difficult for stockholders to replace members of our board of directors, which is responsible for appointing the members of our management.

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In general, Section 203 of the DGCL, an anti-takeover law, prohibits a publicly held Delaware corporation from engaging in a business combination, such as a merger, with a person or group owning 15% or more of the corporation’s voting stock, which person or group is considered an interested stockholder under the DGCL, for a period of three years following the date the person became an interested stockholder, unless (with certain exceptions) the business combination or the transaction in which the person became an interested stockholder is approved in a prescribed manner.

We have elected in our amended and restated certificate of incorporation not to be subject to Section 203.

However, our amended and restated certificate of incorporation contains provisions that have the same effect as Section 203, except that they provide that the Sunset Holders, their affiliates and their respective successors (other than the Company or any of our subsidiaries), as well as their direct and indirect transferees, will not be deemed to be “interested stockholders,” regardless of the percentage of our voting stock owned by them, and accordingly will not be subject to such restrictions.

Our amended and restated certificate of incorporation designates the Court of Chancery of the State of Delaware as the sole and exclusive forum for certain types of actions and proceedings that may be initiated by our stockholders, and the federal district courts as the exclusive forum for Securities Act claims, which could limit our stockholders’ ability to obtain what such stockholders believe to be a favorable judicial forum for disputes with us or our directors, officers or other employees.

Our amended and restated certificate of incorporation provides that, unless we select or consent to the selection of an alternative forum, all complaints asserting any internal corporate claims, which include claims in

We have elected in our restated certificate of incorporation not to be subject to Section 203.

However, our restated certificate of incorporation contains provisions that have the same effect as Section 203, except that they provide that the Principal Holders (as defined below), their affiliates and their respective successors (other than the Company or any of our subsidiaries), as well as their direct and indirect transferees, will not be deemed to be “interested stockholders,” regardless of the percentage of our voting stock owned by them, and accordingly will not be subject to such restrictions.

The “Principal Holders” are Monte Brem, Scott Hart, Jason Ment, Jose Fernandez, Michael McCabe, Mark Maruszewski, Thomas Keck, Thomas Bradley, David Jeffrey and Darren Friedman (including their respective family trusts and any other permitted transferees).

Our restated certificate of incorporation designates the Court of Chancery of the State of Delaware as the sole and exclusive forum for certain types of actions and proceedings that may be initiated by our stockholders, and the federal district courts as the exclusive forum for Securities Act claims, which could limit our stockholders’ ability to obtain what such stockholders believe to be a favorable judicial forum for disputes with us or our directors, officers or other employees.

Our restated certificate of incorporation provides that, unless we select or consent to the selection of an alternative forum, all complaints asserting any internal corporate claims, which include claims in

the right of our company (i) that are based upon a violation of a duty by a current or former director, officer, employee or stockholder in such capacity or (ii) as to which the DGCL confers jurisdiction upon the Court of Chancery, shall, to the fullest extent permitted by law, be exclusively brought in the Court of Chancery of the State of Delaware or, if such court does not have subject matter jurisdiction thereof, another state court or a federal court located within the State of Delaware.

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Our choice-of-forum provision will not apply to suits brought to enforce any liability or duty created by the Exchange Act, and investors cannot waive compliance with the federal securities laws and the rules and regulations thereunder.

Any person or entity purchasing or otherwise acquiring an interest in any shares of our capital stock shall be deemed to have notice of and to have consented to the forum provisions in our amended and restated certificate of incorporation.

These choice-of-forum provisions may limit a stockholder’s ability to bring a claim in a judicial forum that he, she or it believes to be favorable for disputes with us or our directors, officers or other employees, which may discourage such lawsuits.

Alternatively, if a court were to find these provisions of our amended and restated certificate of incorporation inapplicable or unenforceable with respect to one or more of the specified types of actions or proceedings, we may incur additional costs associated with resolving such matters in other jurisdictions, which could materially adversely affect our business, financial condition and results of operations and result in a diversion of the time and resources of our management and board of directors.

Alternatively, if a court were to find these provisions of our restated certificate of incorporation inapplicable or unenforceable with respect to one or more of the specified types of actions or proceedings, we may incur additional costs associated with resolving such matters in other jurisdictions, which could materially adversely affect our business, financial condition and results of operations and result in a diversion of the time and resources of our management and board of directors.

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 1A. Risk Factors