Red Violet (RDVT) risk factors, FY2025 10-K

Cybersecurity and Technology Risks

1. 01Our products and services are highly technical and if they contain undetected errors, our business could be adversely affected and we may have to defend lawsuits or pay damages in connection with any alleged or actual failure of our products and services
2. 02If we fail to respond to rapid technological changes in the data and analytics sector, we may lose customers and/or our products and/or services may become obsolete
3. 03the possibility that a third party, after establishing a foothold on an internal network without being detected, might obtain access to other networks and systems
4. 04If we fail to maintain and improve our systems, our certifications, our technology, and our interfaces with data and customers, demand for our services could be adversely affected
5. 05transition customers and data sources successfully to new interfaces or other technologies
6. 06Issues in the development and use of artificial intelligence and generative artificial intelligence may result in reputational harm, liability, or other adverse consequences to our business66% rewritten

Legal, Regulatory and Compliance Risks

1. 07Our business is subject to various governmental regulations, laws, and orders, compliance with which may cause us to incur significant expenses or reduce the availability or effectiveness of our solutions, and the failure to comply with which could subject us to civil or criminal penalties or other liabilities25% rewritten
2. 08failure of our solutions to adapt to changes in the regulatory environment in an efficient, cost-effective manner
3. 09The outcome of litigation, inquiries, investigations, examinations, or other legal proceedings in which we are involved, in which we may become involved, or in which our customers or competitors are involved, could subject us to significant monetary damages or restrictions on our ability to do business
4. 10While we maintain various insurance policies that we believe provide us with suitable coverage and protection in the event of litigation or other legal proceedings, those policies may contain exclusions or limitations, resulting in some cases in us retaining all or a portion of the risk of loss

Business and Operations Risks

1. 11Our future operating results remain uncertain
2. 12We depend, in part, on strategic alliances and joint ventures to grow our business. If we are unable to develop and maintain these strategic alliances and joint ventures, our growth may be adversely affected
3. 13If we consummate any future acquisitions, we will be subject to the risks inherent in identifying, acquiring, and operating a newly acquired business
4. 14our successfully operating the acquired business
5. 15Our relationships with key customers may be materially diminished or terminated, which could adversely affect our business, financial condition, and results of operations
6. 16If we lose the services of key personnel, it could adversely affect our business
7. 17We could lose our access to data sources which could prevent us from providing our services
8. 18We must adequately protect our intellectual property in order to prevent loss of valuable proprietary information
9. 19We face intense competition from both start-up and established companies that may have significant advantages over us and our products
10. 20There may be further consolidation in our end-customer markets, which may adversely affect our revenue
11. 21To the extent the availability of free or relatively inexpensive consumer and/or business information increases, the demand for some of our services may decrease
12. 22If our newer products do not achieve market acceptance, revenue growth may suffer26% rewritten
13. 23Our products and services can have long sales and implementation cycles, which may result in substantial expenses before realizing any associated revenue
14. 24If our outside service providers and key vendors are not able to or do not fulfill their service obligations, our operations could be disrupted and our operating results could be harmed
15. 25Consolidation in the data and analytics sector may limit market acceptance of our products and services
16. 26We may incur substantial expenses defending the Company against claims of infringement
17. 27Environmental issues, including any future reporting obligations in connection with environmental issues, may adversely impact our business and operations

Risks Related to Our Common Stock

1. 28Our stock price has been and may continue to be volatile, and the value of an investment in our common stock may decline48% rewritten
2. 29political instability, natural disasters, pandemics, war, and/or events of terrorism
3. 30Future issuances of shares of our common stock in connection with acquisitions or pursuant to our stock incentive plans could have a dilutive effect on your investment56% rewritten
4. 31The concentration of our stock ownership may limit individual stockholder ability to influence corporate matters41% rewritten
5. 32We are a “smaller reporting company,” and the reduced disclosure requirements applicable to smaller reporting companies may make our common stock less attractive to investors
6. 33There is no assurance that we will continue to declare or pay dividends on our common stock in the future43% rewritten