Health In Tech (HIT) risk factors, FY2024 10-K

Risks Related to our Business and Industry

1. 01Our success and ability to grow our business depend in part on retaining and expanding our network of brokers, TPAs MGUs, and other third-party agents. If we fail to add to our network, or retain our current one, our business, revenue, operating results, and financial condition could be harmed
2. 02Our growth strategy includes, without limitation, the acquisition of additional clients in existing and new markets and states, introducing new services and plans, and monetizing our technology
3. 03We rely on the ability of our insurance carriers to service our clients
4. 04We may not be able to maintain profitability in the future
5. 05Failure to accurately perform underwriting actuarial reviews and adjustments to our underwriting tools could result in an increase in the cost and pricing of health plans we are able to program in the future, which could negatively impact the reputation of our eDIYBS platform and our financial results
6. 06Failure of HI Card to properly function and provide an interface for medical claims for clients on our platform could negatively affect our clients and could lead to them terminating our services
7. 07If the number of members utilizing our platforms decreases or the number of services to which they subscribe, our revenue will decrease
8. 08If the number of individuals using our platforms decreases for any reason, our revenue will likely decrease. Failure to manage our continued growth effectively could increase our expenses, decrease our revenue, and prevent us from implementing our business strategy
9. 09We rely on the health of the U.S. health insurance industry and benefits of self-insurance plans
10. 10Changes or developments in the health insurance markets in the United States, including passage and implementation of a law to create a single-payer or government-run health insurance program, could materially and adversely harm our business and operating results
11. 11In addition, changes to government policies not specifically targeted to the healthcare industry, such as a change in tax laws and the corporate tax rate or government spending cuts, could have significant impacts on our business, results of operations, financial condition and liquidity
12. 12Our limited operating history makes it difficult to evaluate our current business performance, implementation and growth of our business model, and our future prospects
13. 13We are subject to risks associated with outsourcing services and functions to third parties
14. 14If we are unable to integrate and manage our information systems effectively, our operations could be disrupted
15. 15From time to time, we may become involved in costly and time-consuming litigation and regulatory actions, which require significant attention from our management
16. 16We rely on the experience and expertise of our Founder, senior management team, highly-specialized technology and insurance experts, key technical employees, and other highly skilled personnel
17. 17Our customers’ sensitive, proprietary, or confidential information could be leaked, disclosed, or revealed as a result of or in connection with our employees’, personnel’s, or vendors’ use of generative AI technologies
18. 18There can be no assurances that our Artificial Intelligence Governance Policy and other measures will prevent risks related to our use of AI
19. 19Real or perceived errors, failures or bugs in our systems, website, or app could impair our operations, damage our reputation and brand, and harm our business and operating results
20. 20Failure to secure, protect, or enforce our intellectual property rights could harm our business, results of operations, and financial condition
21. 21The use of open source software in our services and solutions may expose us to additional risks and harm our intellectual property rights
22. 22We might require additional capital to support business growth

Risks Related to Ownership of Our Class A Common Stock

1. 23Our Class A Common Stock price may be volatile or may decline regardless of our operating performance, and you may not be able to resell your shares at or above the initial public offering price
2. 24We cannot predict the effect our dual class structure may have on the market of our Class A Common Stock
3. 25We do not intend to pay dividends on our Class A Common Stock for the foreseeable future
4. 26Our management team has limited experience managing a public company
5. 27The obligations associated with being a public company require significant resources and management attention, and we have and will continue to incur increased costs as a result of becoming a public company
6. 28Claims for indemnification by our directors and officers may reduce our available funds to satisfy successful stockholder claims against us and may reduce the amount of money available to us
7. 29Provisions in our Bylaws and Nevada law may have the effect of discouraging lawsuits against our directors and officers
8. 30Anti-takeover provisions in our governing documents and under Nevada law could make an acquisition of our company more difficult, limit attempts by our stockholders to replace or remove our current management, and depress the market price of our Class A Common Stock
9. 31These provisions, alone or together, could delay or prevent hostile takeovers and changes in control or changes in our management
10. 32An active trading market for our Class A Common Stock may not be sustained
11. 33If securities analysts do not publish research or reports about our company, or if they issue unfavorable commentary about us or our industry or downgrade our Class A Common Stock, the price of our Class A Common Stock could decline
12. 34If our operating and financial performance in any given period does not meet the guidance that we provide to the public, the market price of our Class A Common Stock may decline
13. 35We are a “controlled company” within the meaning of the Nasdaq listing rules, and we may follow certain exemptions from certain corporate governance requirements that could adversely affect our shareholders