Ethos Technologies (LIFE) risk factors, FY2025 10-K

Risks Related to Our Business

1. 01We have a history of losses, and while we have recently achieved profitability, we may not sustain it in the future
2. 02We have a limited history operating our business at its current scale, scope, and complexity, which makes it difficult to plan for future operations and growth initiatives and predict future results
3. 03Our business could be harmed if we fail to manage our growth effectively
4. 04If we are unable to scale our support and operational processes effectively, the quality of the experience for consumers, agents, and agencies could suffer. This may negatively impact agent engagement and retention as well as our relationships with carriers and agencies, conversion rates, and consumer satisfaction
5. 05Our business may be harmed if we lose relationships with carriers, fail to maintain good relationships with carriers, become even more dependent upon a limited number of carriers or fail to develop new carrier relationships
6. 06We rely on a limited number of carriers, and if we are unable to maintain these relationships or diversify the carriers with whom we work, our business and results of operations could be harmed
7. 07We rely on a limited number of agency counterparties, and if we are unsuccessful in maintaining relationships with these and new agencies and their ultimate owners, our results of operations will be harmed
8. 08Our success depends on individual agent adoption and engagement, and if agents do not engage with or adopt our platform, our results of operations will be harmed
9. 09Our business depends in part on third-party data, technology, and infrastructure providers and failure to maintain these relationships or changes in their services could adversely affect our operations, revenue, and growth
10. 10Our business is subject to risks related to disputes, legal proceedings, and governmental inquiries
11. 11There have been a number of revisions to existing, or proposals to modify or enact new laws and regulations regarding insurance agents, brokers, and distribution platforms. These actions have imposed or could impose additional obligations on us with respect to products sold on our platform
12. 12Competition in our industry is intense, and our inability to compete effectively may adversely affect our business, financial condition, and results of operations
13. 13Cyber attacks, data breaches, security incidents, systems failures, and resulting interruptions in the availability of our websites, mobile applications, platform, or services could adversely affect our business, financial condition, and results of operations
14. 14Our brand awareness and marketing efforts to help grow our business may not be effective
15. 15We expect a number of factors to cause our results of operations and operating cash flows to fluctuate on a quarterly and annual basis, which may make it difficult to predict our future performance
16. 16the seasonality of our business
17. 17Changes in our accounting estimates and assumptions could negatively affect our financial position and operating results
18. 18Our ability to recoup payments from agents and the timing of those recouped payments may impact our business and operating results
19. 19Non-compliance with or changes in laws, regulations or licensing requirements applicable to us could restrict our ability to conduct our business and impact our results of operations and financial condition
20. 20Fluctuations or an overall decline in economic activity, or any adverse trends in the life insurance industry, could have a material adverse effect on the financial condition and results of operations of our business
21. 21Our inability to successfully recover should we experience a disaster or other business continuity problem could cause material financial loss, loss of human capital, regulatory actions, reputational harm or legal liability
22. 22If we do not continue to innovate and further develop our platform, our platform developments do not perform, we do not successfully manage our platform strategy, or we are not able to keep pace with technological developments, we may not remain competitive and our business and results of operations could suffer
23. 23Our inability to retain or hire qualified employees, as well as the loss of any of our executive officers, could negatively impact our ability to retain existing business and generate new business
24. 24If any of our key professionals were to join an existing competitor or form a competing company, some of our carriers, agency counterparties, and consumers could choose to use the services of that competitor instead of our services
25. 25Any failure to offer high-quality support for our platform may harm our relationships with consumers, agents, and carriers and could adversely affect our business, financial condition, and results of operations
26. 26We use third-party cloud service providers to deliver our platform services. Any disruption of services from our cloud service providers could harm our business
27. 27Our business, financial condition, and results of operations may be negatively affected by E&O claims
28. 28In connection with the implementation of our corporate strategies, we face risks associated with the acquisition or disposition of businesses, the entry into new lines of business, the integration of acquired businesses, and the growth and development of these businesses
29. 29If we fail to improve and enhance the functionality, performance, reliability, design, security, and scalability of our platform and innovate and introduce new solutions in a manner that responds to our consumers’ evolving needs, our business may be adversely affected
30. 30Our results may be adversely affected by changes in the mode of compensation in the insurance industry
31. 31Internet search engines drive traffic to our platform and our new user growth could decline if we fail to appear prominently in search results
32. 32Damage to our reputation could have a material adverse effect on our business

Risks Related to Intellectual Property, Data Privacy, and Security

1. 33actors, “hacktivists,” organized criminal threat actors, personnel (such as through theft or misuse), AI agents, sophisticated nation states, and nation-state-supported actors
2. 34We utilize artificial intelligence in connection with our business, which may expose us to regulatory, operational, or reputational risk
3. 35We employ third-party licensed software for use in our business, and the inability to maintain these licenses or errors in the software we license could result in increased costs or reduced service levels, which would adversely affect our business
4. 36Our platform contains third-party open source software components, and failure to comply with the terms of the underlying open source software licenses could restrict our ability to provide our platform and services and subject us to costly litigation or other disputes

Risks Related to Ownership of Our Common Stock

1. 37In addition, each outstanding share of Class
2. 38the death or disability of such co-founder
3. 39Proxy, one co-founder would then be able to significantly influence or determine any action requiring approval of stockholders in his sole discretion, including all matters referred to above
4. 40Our stock price may be volatile, and the value of our Class A common stock may decline
5. 41general political, social, economic, and market conditions, in both domestic and our foreign markets, including effects of increased interest rates, inflationary pressures, bank failures, and macroeconomic uncertainty and challenges
6. 42An active public trading market for our Class A common stock may not develop or be sustained
7. 43Future sales of our Class A common stock in the public market could cause the market price of our Class A common stock to decline
8. 44We may require additional capital to support the growth of our business, and this capital might not be available on acceptable terms, if at all
9. 45We do not intend to pay dividends for the foreseeable future and, as a result, your ability to achieve a return on your investment will depend on appreciation in the price of our Class A common stock
10. 46We are an “emerging growth company,” and the reduced reporting and disclosure requirements applicable to emerging growth companies could make our Class A common stock less attractive to investors
11. 47We incur costs as a result of operating as a public company, and our management is required to devote substantial time to compliance with our public company responsibilities and corporate governance practices
12. 48Anti-takeover provisions in our charter documents and under Delaware law could make an acquisition of our company more difficult, limit attempts by our stockholders to replace or remove our current management, and limit the market price of our Class A common stock
13. 49require the approval of our board of directors or the holders of at least 66 2/3% of our outstanding shares of voting stock to amend our bylaws and certain provisions of our certificate of incorporation
14. 50If securities or industry analysts do not publish research or publish unfavorable or inaccurate research about our business, the market price and trading volume of our Class A common stock could decline

General Risks

1. 51We and our employees have and may continue to be subject to claims alleging violations of our employees’ contractual obligations to their prior employers. These claims may be costly to defend, and if we do not successfully do so, our business could be harmed
2. 52Our ability to use our net operating losses to offset future taxable income may be subject to certain limitations
3. 53We may be subject to additional tax liabilities, including as a result of changes in tax laws or regulations, which could adversely affect our financial condition and results of operations
4. 54Our management team has limited experience managing a public company
5. 55Climate risks, including the risk of an economic crisis, risks associated with the physical effects of climate change, and disruptions caused by the transition to a low-carbon economy, could adversely affect our business, results of operations and financial condition