Andersen Group (ANDG) risk factors, FY2025 10-K

Risks Related to Our Business, Operations and Industry

1. 01We may not be able to maintain or increase our historical revenue growth or achieve or maintain profitability in the future
2. 02Our business depends on generating and maintaining client demand, including through the adaptation and expansion of our services, and a significant reduction in such demand could materially affect our results of operations
3. 03We may be unable to effectively manage our growth, which could place significant strain on key personnel, as well as our systems and other resources
4. 04We may not be able to identify and complete acquisitions of additional businesses, or business combinations, including due to regulatory or legal restrictions, which may limit our ability to pursue our business strategy
5. 05We may not be successful at integrating or managing acquisitions or business combinations, and/or such acquisitions or business combinations may not otherwise perform to our expectations, which may increase the costs and reduce the benefits, if any, we receive from such acquisitions
6. 06Our competitiveness and success depend substantially on the continuing efforts of our CEO and Chairman, Mark Vorsatz, our senior Managing Directors and other key personnel
7. 07If we cannot maintain our firm culture as we grow and operate as a public company, our success and our business may be harmed
8. 08Failure to maintain our reputation and brand could impact our ability to attract and retain clients, employees and future acquisition targets or business combinations, and may harm our business
9. 09Our ability to staff client engagements, maintain relationships with clients and drive future growth depends on our ability to recruit, train and retain qualified professionals
10. 10If we were to be held liable for alleged errors, omissions, illegal practices or other misconduct in providing our services to clients, our brand and reputation could be harmed and we could incur significant costs, which may exceed available insurance, if any, and which could harm our business
11. 11We may enter into or invest in new lines of business or engage in other strategic initiatives that may fail to generate revenue and result in additional risks to our business
12. 12If we fail to compete effectively, we may miss business opportunities or lose existing clients, and our revenue may decline
13. 13Our revenue and profitability may vary based on the mix of the types of our client engagements and may be adversely affected by our failure to recover the expenses, time, and resources for our client engagements
14. 14manage and control these costs, our operating results could be adversely affected, and we may be unable to retain existing clients or secure future engagements
15. 15Our profitability could suffer if we are not able to effectively utilize our employees, maintain operational efficiencies or manage our cost structure
16. 16Claims or adverse publicity could harm our brand, reputation and ability to compete and attract and retain clients, talent and future acquisition targets and business combinations
17. 17Adverse judgments or settlements in legal disputes could result in monetary damages or injunctive relief that could damage our reputation and materially affect our results of operations
18. 18Consolidation in the professional services industry could have a material adverse effect on the competitiveness of our business, financial condition and results of operations
19. 19We have a relatively short operating history at our current scale in a competitive industry and, as a result, our past results may not be indicative of future operating performance
20. 20We may experience quarterly fluctuations in our operating results, as well as our key metrics, due to a number of factors that make our future results difficult to predict and could cause our operating results to fall below market expectations or guidance we provide
21. 21Our business activity and associated revenue is subject to seasonality, which could result in fluctuations in the market price of our Class A common stock
22. 22International expansion will subject us to additional costs and risks and our plans may not be successful
23. 23If we fail to continue to benefit from our existing business relationships and fail to establish new relationships in the future, our results of operations could be adversely affected
24. 24We are dependent on our existing client base and our ability to retain and expand our relationships with such clients. Our clients may terminate our engagements with little or no notice and without penalty, which may result in unexpected declines in our revenue or unexpected costs
25. 25Volatile, negative or uncertain economic and geopolitical conditions could adversely affect our business and materially reduce our revenue
26. 26War, terrorism, other acts of violence or natural or man-made disasters may affect the markets in which we operate in the future and our ability to service our clients
27. 27Payments by clients against open accounts receivable may be slower than expected, and we may face risks of fee non-payments, which could result in loss of engagements, fee write-offs, and reduced revenue
28. 28We could be subject to reputational and legal risk arising from, among other things, actual or perceived conflicts of interest
29. 29Our estimates of market opportunity and our ability to capture a meaningful share of this market may prove to be inaccurate, and even if the market in which we compete achieves the forecasted growth, our business could fail to grow at similar rates, if at all

Risks Related to Government Regulation

1. 30Government regulations, interpretations and fiscal, regulatory and other policies are subject to changes, which could impact our clients and materially reduce our revenue
2. 31Changes to tax laws, rules and regulations could impact our clients, decrease demand for our services, and materially reduce our revenue, and such changes, along with examinations of our tax returns, may negatively impact our effective tax rate and financial results and increase our cash tax payment obligations
3. 32The SEC oversees and directly regulates the activities of our subsidiary that is a registered investment advisor under the Advisers Act
4. 33Our failure or alleged failure to comply with all applicable laws and regulations may damage our reputation, cause us to lose employees or clients, result in legal liability, and have a material adverse effect on our business and results of operations

Risks Related to Information Technology, Infrastructure and Intellectual Property

1. 34Rapid technological changes, including the widespread adoption of AI, could significantly impact our competitive position, client relationships and results of operations
2. 35If we are unable to keep pace with the adoption and use of generative AI technology in our business and effectively implement generative AI, we could become less competitive in our industry
3. 36Our use of generative AI tools may pose risks to our business and could subject us to legal liability
4. 37A significant failure in our systems, telecommunications or IT infrastructure, or those of our data storage, software as a service, or cloud vendors, could disrupt our ability to perform our services or otherwise disrupt our business, which could result in a reduction of our revenue
5. 38If we or our consolidated subsidiaries or licensees are unable to protect or enforce our trademark rights, our business could be adversely affected
6. 39We are subject to risk as it relates to software that we license or cloud-based software that we subscribe to from third parties

Risks Related to Financial and Accounting Matters

1. 40We may require additional capital to support the growth of our business, and this capital might not be available on acceptable terms, or not available at all
2. 41Changes to accounting standards or the estimates and assumptions we make in connection with the preparation of our consolidated financial statements could adversely affect our financial results
3. 42Our goodwill and other intangible assets could become impaired, which could lead to material non-cash charges against earnings and a material impact on our future results of operations and statement of financial position
4. 43Fluctuations in foreign currency exchange rates could adversely affect our results

Risks Related to Being a Public Company

1. 44We are an “emerging growth company” and we expect to continue to rely on reduced public company reporting requirements, which could make our Class A common stock less attractive to investors
2. 45We will incur increased costs as a result of operating as a public company, and our management will be required to devote substantial time to new compliance initiatives and corporate governance practices

Risks Related to Our Organizational Structure

1. 46Our principal asset is our interest in AT Umbrella LLC and, accordingly, we depend on distributions from AT Umbrella LLC to pay our taxes and expenses, including payments under the Tax Receivable Agreement, which distributions AT Umbrella LLC may be restricted from making
2. 47Our organizational structure, including the Tax Receivable Agreement, confers certain benefits upon the other Class X Umbrella Unit holders (including LTIP Unit holders who can convert into Class X Umbrella Unit holders) that will not benefit the holders of our Class A common stock to the same extent
3. 48We may not be able to realize all or a portion of the tax benefits that are currently expected to result from the tax attributes covered by the Tax Receivable Agreement and from payments made under the Tax Receivable Agreement
4. 49The members of AT Umbrella LLC, including us, may have conflicting interests

Risks Related to Our Class A Common Stock

1. 50The market price of our Class A common stock could be volatile and you may lose all or part of your investment. Declines in the market price of Class A common stock could subject us to litigation
2. 51Sales of a substantial number of shares of our Class A common stock in the public market by our existing stockholders could cause the market price of our Class A common stock to decline
3. 52Additionally, shares of our Class A common stock or securities convertible into or exchangeable for shares of our Class A common stock issued pursuant to our 2025 Equity Incentive Plan will be available for sale in the open market upon the exercise or settlement of such equity awards
4. 53Future sales and issuances of our Class A common stock or rights to purchase or acquire common stock could result in additional dilution to our stockholders and could cause the market price of our Class A common stock to decline
5. 54We are a “controlled company” within the meaning of NYSE rules and, as a result, qualify for, and intend to rely on, exemptions and relief from certain corporate governance requirements. You do not have the same protections afforded to stockholders of companies that are subject to such requirements
6. 55If industry or financial analysts issue inaccurate or unfavorable research regarding our Class A common stock, our stock price and trading volume could decline
7. 56Anti-takeover provisions in our charter documents and under Delaware law could make an acquisition of our company more difficult, could limit attempts to make changes in our management, and could depress the market price of our Class A common stock
8. 57We do not currently intend to pay dividends on our capital stock, so any returns will be limited to increases in the value of our Class A common stock, if any