Biglari Holdings (BH) risk factors, FY2025 10-K

Risks relating to Biglari Holdings

1. 01We are dependent on our Chairman and CEO
2. 02Sardar Biglari, Chairman and CEO, beneficially owns over 50% of our outstanding shares of common stock, enabling Mr. Biglari to exert control over matters requiring shareholder approval
3. 03We are a “controlled company” within the meaning of the New York Stock Exchange rules and thus can rely on exemptions from certain corporate governance requirements
4. 04Biglari Holdings’ access to capital is subject to restrictions that may adversely affect its ability to satisfy its cash requirements
5. 05Competition and technology may result in lower earnings
6. 06Deterioration of general economic conditions may significantly reduce our operating earnings
7. 07Epidemics, pandemics, or other outbreaks could hurt our operating businesses and investments
8. 08Potential changes in laws or regulations may have a negative impact on our Class A common stock and Class B common stock
9. 09Litigation could have a material adverse effect on our financial position, cash flows, and results of operations
10. 10There can be no assurance that the fees paid to the Biglari Entities will be commensurate with the benefits received
11. 11We have identified a material weakness in our internal control over financial reporting56% rewritten
12. 12Future sales of our common stock may cause the market price of our common stock to declineNew

Risks Relating to Our Restaurant Operations

1. 13Our restaurant operations face intense competition from a wide range of industry participants
2. 14Changes in economic conditions may have an adverse impact on our restaurant operations
3. 15Fluctuations in commodity and energy prices and the availability of commodities, including beef and dairy, could affect our restaurant business
4. 16Adverse weather conditions or losses due to casualties could negatively impact our operating performance
5. 17Changes in the availability of and the cost of labor could adversely affect our restaurant business
6. 18We are subject to health, employment, environmental, and other government regulations, and failure to comply with existing or future government regulations could expose us to litigation or penalties, damage our reputation, and lower profits
7. 19The development and construction of restaurants is subject to compliance with applicable zoning, land use, and environmental regulations. Difficulties in obtaining, or failure to obtain, the required licenses or approvals could delay or prevent the development of a new restaurant in a particular area

Risks Relating to Our Investment Activities

1. 20The majority of our investment activities are conducted through outside investment partnerships, The Lion Fund, L.P., and The Lion Fund II, L.P., which are controlled by Mr. Biglari
2. 21Our investments may be concentrated, and fair values are subject to a loss in value
3. 22We are subject to the risk of possibly becoming an investment company under the Investment Company Act of 1940

Risks Relating to Our Insurance and Reinsurance Business

1. 23Our success depends on our ability to underwrite risks accurately and to charge adequate rates to policyholders
2. 24Our insurance business is vulnerable to significant catastrophic property loss, which could have an adverse effect on its financial condition and results of operations
3. 25Our insurance business is subject to extensive existing state, local, and foreign governmental regulations that restrict its ability to do business and generate revenues

Risks Relating to Our Brand Licensing Business

1. 26Licensing opportunities for the Maxim brand may be difficult to maintain

Risks Relating to Our Oil and Gas Business

1. 27Our oil and gas business is exposed to the effects of volatile commodity prices
2. 28Our oil and gas business is subject to disruption by factors beyond its control
3. 29Our oil and gas business can be adversely affected by political or regulatory developments affecting our operations