Item 1A. Risk Factors
RISK FACTORS
A description of risks and uncertainties facing our business is set forth below. Investing in our Class A common stock involves a high degree of risk. You should consider carefully the risks and uncertainties described below, as well as the other information in this Annual Report, including our financial statements and the related notes and Part II, Item 7 “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” before deciding whether to invest in shares of our Class A common stock. The risks and uncertainties described below are not the only ones we face. Additional risks and uncertainties that we are unaware of or that we deem immaterial may also become important factors that adversely affect our business. This Annual Report also contains forward-looking statements that involve risks and uncertainties. See the section titled “Special Note Regarding Forward-Looking Statements” in this Annual Report. If any of the following risks actually occur, our business, financial condition, liquidity, operating results, and prospects could be materially and adversely affected. In that event, the market price of our Class A common stock could decline, and you could lose part or all of your investment.
Risk Factors Summary
The following is a summary of the most significant risks, challenges and uncertainties facing our business. This summary should be read in conjunction with the risk factors described below and should not be considered an exhaustive list or summary of all of the significant or material risks, challenges and uncertainties that we face.
• We may not be able to maintain or increase our historical revenue growth or achieve or maintain profitability in the future.
• Our 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.
• We may be unable to effectively manage our growth, which could place significant strain on key personnel, as well as our systems and other resources.
• We may not be successful at integrating or managing future acquisitions or business combinations.
• Our competitiveness and success depend substantially on the continuing efforts of our CEO and Chairman, Mark Vorsatz, our senior Managing Directors and other key personnel.
• If we cannot maintain our firm culture as we grow and operate as a public company, our success and our business may be harmed.
• Failure to maintain our reputation and brand could impact our ability to attract and retain clients, employees and future acquisition targets and business combinations, and may harm our business.
• Our ability to staff client engagements, maintain relationships with clients and drive future growth depends on our ability to recruit, train and retain qualified professionals.
• If 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.
• We 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.
• If we fail to compete effectively, we may miss business opportunities or lose existing clients, and our revenue may decline.
• We 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 may provide.
• Rapid technological changes, including the widespread adoption of AI, could significantly impact our competitive position, client relationships and results of operations.
• We may face legal, reputational and financial risks relating to cybersecurity incidents or attacks affecting us.
• We have identified material weaknesses in our internal control over financial reporting. If our remediation of such material weaknesses is not effective, or if we experience additional material weaknesses in the future or otherwise fail to develop and maintain effective internal control over financial reporting, our ability to produce timely and accurate financial statements or comply with applicable laws and regulations could be impaired.
• Our 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.
• The dual-class structure of our common stock has the effect of concentrating voting control with Aggregator, which holds in the aggregate approximately 98.7 % of the combined voting power of our outstanding capital stock. This ownership will limit or preclude your ability to influence corporate matters, including the election of directors, amendments of our organizational documents, and any major corporate transaction requiring stockholder approval, including change of control transactions.
Risks Related to Our Business, Operations and Industry
We may not be able to maintain or increase our historical revenue growth or achieve or maintain profitability in the future.
We generated $838.7 million and $731.6 million of revenue in 2025 and 2024, respectively. We also generated a net loss of $(130.2) million in 2025, driven primarily by issuance of new profits interest units and equity restructuring costs as compared with net income of $134.8 million in 2024. Our ability to maintain or increase our historical revenue growth or achieve or maintain profitability depends on our ability to continue to generate and maintain client demand in the professional services industry, as well as to anticipate, gauge, and react to changing client preferences in a timely manner. You should not rely on the revenue growth or profitability of any prior quarterly or annual period as an indication of our future performance. Even if our revenue continues to increase, we expect that our revenue growth rate will fluctuate in the future as a result of a variety of factors and our profitability may not be maintained. We have encountered and will continue to encounter significant risks and uncertainties frequently experienced by growing companies. If our assumptions regarding these and other similar risks and uncertainties are incorrect or change, or if we do not address these , our operating and financial results could differ materially from our expectations and our business could . If we are to remain competitive, or if we to anticipate accurately and respond to trends and shifts in client needs, we could current clients, to attract new clients, or experience lower revenue or net income, any of which could have an effect on our results of operations and financial condition.
Our 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.
The professional services industry has been and continues to be impacted by significant competition, technological changes and innovation. Our success depends, in part, on our ability to continue to develop and implement service offerings that anticipate and respond to rapid and continuing changes to serve the evolving needs of our clients and to remain competitive. As we continue to adapt and also expand our service offerings, including to keep up with advanced technologies being deployed by our competitors, we may be exposed to operational, legal, regulatory, ethical, technological and other risks, which may negatively affect demand for our services.
Developments in the professional services industry, which may be rapid, also could shift demand to new services. If, as a result of new technologies or other changes, our clients demand new services, we may be less competitive in these new areas or need to make significant investment to meet that demand. If we do not sufficiently invest in new technology and adapt to industry developments, or evolve and expand our service offerings at sufficient speed and scale, or if we do not make the right strategic investments to respond to these developments and successfully drive innovation, our services, results of operations, and ability to develop and maintain a competitive advantage and to execute on our growth strategy could be adversely affected. See the risk factor titled “-Risks Related to Information Technology, Infrastructure and Intellectual Property-Rapid technological changes, including the widespread adoption of AI, could significantly impact our competitive position, client relationships and results of operations.”
We may be unable to effectively manage our growth, which could place significant strain on key personnel, as well as our systems and other resources.
Our growth in recent years has been both organic and through acquisitions, and we expect this growth to continue, including through acquisitions and business combinations, as we execute on our business strategy. This growth requires that we invest substantial amounts of cash in human capital and the infrastructure to support them, including recruiting, training, administration, and facilities. Significant and/or rapid growth places substantial strain on our key personnel and our administrative, operational and financial infrastructure, and creates challenges, including:
• recruiting, training and retaining sufficiently skilled professionals and other personnel;
• balancing headcount with client requirements;
• balancing an increase in the number of experienced personnel that have correspondingly higher billing rates with hiring, training, and deploying less experienced personnel;
• planning and maintaining resource utilization rates consistently and efficiently;
• maintaining our culture;
• developing and maintaining close and productive relationships with potential and existing clients;
• controlling costs and minimizing cost overruns and project delays;
• effectively maintaining productivity levels and implementing process improvements during periods of uneven client demand; and
• scaling and improving our information security and internal administrative, operational and financial infrastructure.
As we grow, whether through introducing new services, entering into new markets and client relationships, pursuing acquisitions and business combinations, or other inorganic growth opportunities or otherwise, our business will face new risks and challenges. If the challenges associated with expansion and new investments negatively impact our anticipated growth and margins, or if we are unable to effectively manage the human capital and infrastructure challenges related to such growth, our business, prospects, financial condition and results of operations could be materially adversely affected.
We 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.
Our business strategy involves the acquisition of additional businesses and business combinations that we believe will strategically complement our existing business. These activities will require us to identify suitable acquisition candidates and business combinations or other strategic investment opportunities that meet our criteria and are compatible with our growth strategy and culture. We expect to incur significant costs in connection with our acquisition and business combination strategy, including fees of our attorneys and other advisors and other costs related to these transactions.
In the first quarter of 2026, we entered into the proposed acquisitions of four Andersen member firms, and a business combination with one Andersen member firm, all of which are expected to close in the second quarter of 2026, subject to the satisfaction of certain closing conditions. Any proposed acquisitions or business combinations that we announce may not close on the timeline we expect or at all, and we may be unable to identify suitable acquisition or business combination candidates in the future or acquire or complete a business acquisition with them on acceptable terms, or at all. For example, while we are leveraging an AI platform to review due diligence materials, streamline process management and assist in contract negotiations in connection with our acquisition and business combination strategy, we may not be effective in using AI tools to identify and complete acquisitions or business combinations and such tools may not have the intended effect of improving transaction management or identification of risks. Our ability to acquire businesses or complete business combinations on favorable terms may be constrained by a number of factors, including competition from other potential acquirors with significantly more resources than us; regulatory or legal restrictions such as , foreign investment restrictions, and applicable labor law; changes in market conditions; or otherwise; which may result in higher expenses incurred without from the anticipated revenue growth of any such acquisitions or business combinations and could our growth strategy.
We 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.
During the first quarter of 2026, Andersen entered into definitive agreements for the acquisition of four member firms located in the strategically important areas of Africa and Latin America, and for a business combination with one member firm located in the strategically important area of Canada. These transactions are expected to close in the second quarter of 2026, subject to the satisfaction of certain closing conditions. While acquisitions are a key part of our growth strategy, these transactions involve significant risks. Acquired companies may not advance our business strategy or achieve a satisfactory return on our investment. Acquisitions and business combinations also may involve a number of financial, business and operational risks, such as difficulties in integrating diverse cultures and management styles; client relationship issues; decreased utilization during the integration process; loss of key existing or acquired personnel; increased costs to improve or coordinate operational, financial and administrative systems; dilutive issuances of equity securities; the assumption of legal liabilities, including malpractice and similar claims; future earn-out payments or other price adjustments; potential future write-offs relating to the of goodwill or other acquired intangible assets or the revaluation of assets; or to collect receivables; and liabilities. In addition, we may need to implement controls, processes, and policies appropriate for a public company at acquired companies that may have previously such controls, processes, and policies in areas such as cybersecurity, accounting, internal controls, IT,
and privacy. We may also face additional financial, business and operational risks as a result of acquisitions and business combinations designed to broaden our range of services and related client bases, such as from potential expansion of our relationship with Andersen Consulting. Any of these risks may be heightened in the context of the acquisition of an international business. See the risk factor titled “International expansion will subject us to additional costs and risks and our plans may not be successful.”
The process of managing and integrating acquisitions and business combinations into our existing operations may result in unforeseen operating difficulties and may require significant financial, operational and managerial resources that would otherwise be available for the operation, development and organic expansion of our existing operations. In addition, we may continue to seek to consummate multiple concurrent acquisitions or business combinations which may cause additional integrational difficulties and further strain our resources and capabilities. To the extent that we misjudge our ability to effectively manage and integrate acquisitions or business combinations, we may have difficulty achieving our operating, strategic and financial objectives.
Certain acquisition and business combination structures, including any that take the form of an asset purchase, may require us to enter into new client engagement agreements. All clients may not want to work with a new organization. In certain cases, the consent of clients may not be able to be solicited until after the acquisition or business combination has closed and therefore, we cannot assure you that clients of an acquired business will agree to work with us.
From time to time, we also hire groups of selected professionals from another company. In such event, there may be restrictions on the ability of the professionals who join us to compete and work on client engagements. In addition, we may enter into arrangements with the former employers of those professionals regarding limitations on their work until any time restrictions pass. In such circumstances, the utilization of such professionals may be limited after they are hired, and our financial results could be negatively affected until their restrictions end. We could also face litigation risks from group hires, which could result in increased costs, potential significant monetary damages and could further delay or restrict the ability of such new hires to provide services. In addition, businesses that we acquire, or with which we complete a business combination, or employees who join us may not be free to accept engagements they could have accepted prior to our acquisition or hire because of relationship issues or actual or perceived conflicts of interest.
If not effectively managed, the disruption of our ongoing business, increases in our expenses, including significant one-time expenses and write-offs; assumption of unknown liabilities, including tax, litigation, cybersecurity, and other commercial risks; and difficulty and complexity of effectively integrating acquired operations may adversely affect our overall growth and profitability.
Our competitiveness and success depend substantially on the continuing efforts of our CEO and Chairman, Mark Vorsatz, our senior Managing Directors and other key personnel.
Our future success heavily depends upon the expertise, reputation and continued services of our CEO and Chairman, Mark Vorsatz. If Mr. Vorsatz were no longer working at our company, our brand, reputation, and ability to attract and retain clients, senior Managing Directors and other employees, or to execute on our growth strategy, may be materially adversely affected. Although Mr. Vorsatz spends significant time with us and is highly active in our management, he also currently serves as Global Chairman of Andersen Global, a Swiss association of over 300 member and collaborating firms and of which we are a founding member. We believe our relationship with Andersen Global enhances our business through referrals and client introductions from these international partner firms and we do not believe that the time that Mr. Vorsatz currently spends on his Andersen Global duties directly impacts our operations or financial position. However, Mr. Vorsatz’s service with Andersen Global may detract from time otherwise available for his duties and role at our firm and he may be required to devote more time to Andersen Global in the future. In addition, effective management of future succession planning, including succession plans for Mr. Vorsatz and other senior Managing Directors and key personnel, is important for our future . succession planning or the departure of Mr. Vorsatz could cause substantial to our business operations, our institutional knowledge base and referral network, our ability to pursue our strategic expansion strategy, and our competitive .
Our success also depends on the continued service of our senior Managing Directors and other key personnel. Our senior professionals’ expertise, skill, reputation and relationships with clients, potential clients, member and collaborating firms of our global network, Andersen Global, and the leadership personnel of Andersen Consulting are critical elements in maintaining and expanding our businesses. If one or more of these personnel are unable or unwilling to continue in their present roles, we may not be able to replace them easily or at all. While we do not have a mandatory retirement age, if any of our senior Managing Directors or key personnel were to retire, or decide to resign, join an existing competitor, form a competing company or otherwise leave us, we may jeopardize client relationships and ultimately lose clients, know-how and other key personnel, particularly if we have not adequately hired or trained our junior professionals or appropriately staffed our client engagements. In addition, the departure of one or more professionals may lead to the departure of other
professionals who desire to continue to work together elsewhere or who decide to accelerate their retirement decision making. If we are unable to attract or retain our senior Managing Directors or key personnel due to the intense competition for talent in our industry, it could disrupt our business operations and growth.
If we cannot maintain our firm culture as we grow and operate as a public company, our success and our business may be harmed.
We have invested substantial time and resources into building our firm culture and believe that it has been a critical component of our success to date. As we continue to grow, including through geographical expansion, expansion into new services offerings, the acquisition of businesses or groups of professionals, business combinations, and developing the infrastructure associated with being a public company, we will need to maintain our culture across a larger number of employees, service offerings, and geographic regions. As we grow and operate as a public company, it may be difficult to maintain the collaboration, innovation, and values, such as commitment to transparency, that are important to our culture. Any failure to preserve our culture could negatively impact our operations, including our ability to retain and recruit personnel and to effectively focus on and pursue our business objectives. If we cannot maintain our firm culture as we grow and operate as a public company, it could have a material adverse effect on our financial condition and results of operations.
Failure 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.
As a professional services firm, our ability to secure new engagements depends heavily upon maintaining our reputation and brand and the individual reputations of our professionals. Any factor that diminishes our brand or reputation or that of our professionals, including not meeting client expectations or illegal practices or misconduct by our professionals, could make it substantially more difficult for us to attract new clients, employees and future acquisition targets or business combinations, or to retain existing clients and employees. Similarly, because we obtain many of our new engagements from former or current clients, or from referrals by those clients, any client that questions the quality of our work or that of our professionals could impair our ability to secure additional new engagements and clients, and could impair our ability to hire new employees or attract future acquisition targets and business combinations.
Further, because we provide our services primarily in connection with significant or complex matters that often involve confidential and sensitive information, and because our work is the product of myriad judgments of our professionals and other staff operating under significant time and other pressures, we may not always perform to the standards expected by our clients. In addition, we may face reputational damage from, among other things, litigation against us, SEC or other domestic or foreign governmental investigations or sanctions, professional licensing organization disciplinary investigations or actions, or our failure to protect confidential information. In the past, employee negligence or misconduct has adversely affected our business, and we cannot assure that this will not occur in the future. See the risk factor titled “-If we were to be held liable for alleged , , practices or other in providing our services to clients, our brand and reputation could be and we could incur significant costs, which may exceed available insurance, if any, and which could our business.” If our employees engage in actual or perceived or in the provision of client services we could be subject to regulatory sanctions and legal liability and could to our reputation, financial position, current client relationships and ability to attract future clients, and our insurance coverage may not be sufficient to fully compensate us for any we may incur. It is not always possible to or prevent employee or , and the precautions we take may not be in all cases. In addition, our professionals and other employees are responsible for the security of the information in our systems or under our control and for ensuring that non-public information is kept confidential. Should any employee not follow appropriate security measures, this could result in the release or use of confidential information. If our employees engage in or to follow appropriate security measures, we could be subject to legal liability and reputational , which could our ability to attract and retain clients and in turn materially affect our business.
Our ability to staff client engagements, maintain relationships with clients and drive future growth depends on our ability to recruit, train and retain qualified professionals.
We deliver sophisticated professional services to our clients and our business is highly labor-intensive. Our success and future growth is dependent, in large part, on our ability to keep our supply of skills and human resources in balance with client demand, particularly as we expand our service offerings and as the market and technological advancements continue to evolve. To attract and retain clients, we need to consistently demonstrate professional acumen and build trust and strong relationships. Our professionals have highly specialized skills. They also develop strong bonds with the clients they serve, which is a critical element in obtaining and maintaining client engagements. Our continued success depends upon our ability to continue to attract and retain professionals who have the expertise, reputation and client relationships
critical to maintaining and developing our business. We face intense competition in recruiting and retaining highly qualified professionals to drive our growth and support the expansion of our business. We incur significant expenses and expend significant time and resources to recruit, train, integrate and develop our professionals, and we expect these costs to continue as we grow. We also experience attrition of highly qualified professionals in the normal course of our business. We cannot assure you that we will be able to continue to attract or retain any particular qualified professionals or replace those that choose to leave us. Adverse labor and economic market conditions and intense competition for skilled personnel may inhibit our ability to recruit new employees or retain existing employees. In particular, there is a global talent shortage in the accounting sector, which makes these professionals in particularly high demand, and makes our ability to recruit and hire appropriately qualified professionals particularly time-consuming, competitive and expensive compared to many other industries. Additionally, there are challenges related to integrating personnel into our organization and ensuring a proper cultural fit, and these may increase as we continue to grow, particularly internationally. If we are to integrate, motivate, retain or replace qualified professionals, our ability to continue to secure or perform work for our clients may .
Our principal competition for talent comes from other large accounting and consulting firms, as well as from organizations seeking to staff their internal professional positions. If we successfully expand our service offerings to include legal services or investment banking, we would face competition for talent from law firms or investment banks providing the services we provide and in the geographies where we operate. Many of these competitors may be able to offer greater compensation and benefits or more attractive lifestyle choices, career paths, or geographic locations than we can offer. Therefore, we may not be successful in attracting and retaining the skilled professionals we require to conduct and expand our operations successfully. Increasing competition for these revenue-generating professionals may also significantly increase our labor costs, which could negatively affect our margins and results of operations.
If 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.
All of our services entail an inherent risk of claims of malpractice and other similar claims resulting from alleged errors, omissions, illegal practices or other misconduct in providing our services to clients. Actual or perceived errors, omissions, illegal practices and other misconduct by our professionals in the course of delivering services, or our failure to meet our contractual obligations to a client, have resulted and could in the future result in a reduction in our revenue, damage to our reputation, and in clients terminating our engagement or making claims for substantial us. In addition, our business strategy of seeking to acquire additional groups of professionals and businesses and seeking business combinations and affiliations with groups of professionals, may increase the probability of the occurrence of such . Although we maintain and insurance coverage, we cannot be certain that actual , judgments, settlements, or related legal expenses would not exceed the coverage amounts. In addition, if we expand our service offerings to include legal advice or other offerings, we cannot be certain that we will be to procure adequate insurance coverage to mitigate the increased risk of that may occur, including in regards to legal or of professional responsibility obligations. If judgments, settlements, or related legal expenses exceed insurance coverage by a substantial amount, they could have a material effect on our business, financial condition and operating results. In addition, we cannot be certain that the different insurance carriers which provide and coverage for different lines of our business will not their obligation to cover a particular claim. If we have a large claim, or a large number of , on our insurance, the rates for such insurance may increase, and amounts expended in defense or settlement of these prior to exhaustion of deductible or self-retention levels may become significant. Further, some contractual arrangements with clients may constrain our ability to incorporate such increases into our billing rates. Insurance rate increases, by carriers over coverage , payments by us within deductible or self-retention limits, as well as any underlying or settlement of such , along with any resultant publicity or to our brand, could have a material effect on our reputation, business, financial condition and results of operations.
We 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.
In addition to future acquisitions of, and business combinations with, businesses, we also plan to grow our business by entering into new lines of business or engaging in other strategic initiatives to significantly expand the scope and scale of our service offerings. For example, in the near-term, we plan to seek to expand the scope of our consulting services practice, including as to our relationship with Andersen Consulting. This growth strategy will subject us to numerous risks and uncertainties, including risks associated with actual or perceived conflicts of interest, the possibility that we have insufficient expertise to engage in such activities profitably or without incurring inappropriate amounts of risk, the required investment of capital and other resources and the loss of clients.
Entry into certain lines of business may also subject us to new laws, regulations and professional rules of responsibility with which we are not familiar, or from which we are currently exempt, and may lead to increased litigation and regulatory risk. We could also face new competition by entering into new lines of business, and we may not successfully overcome any barriers to entry. If a new service offering or other strategic initiative generates insufficient revenue or if we are unable to efficiently manage our expanded services offerings, our business, financial condition and results of operations could be materially adversely affected.
If we fail to compete effectively, we may miss business opportunities or lose existing clients, and our revenue may decline.
The market for our services is highly competitive. We do not compete against the same companies across all of our service offerings. Instead, we compete with different companies or businesses depending on the particular nature of an engagement. Our primary competitors include large global full-service financial advisory and consulting firms; accounting and advisory practices that focus on middle-market clients; full-service, boutique and specialized tax advisory firms; local providers in the tax, legal, financial advisory and consulting markets internationally; and in-house tax and accounting departments of our clients and potential clients. We compete on national, international and regional bases, and on the basis of a number of factors, including depth of client relationships, industry knowledge, transaction execution skills, our range of services, innovation, reputation and price. In addition, we could experience additional competition as we expand our service offerings, enter new geographic markets and acquire businesses, and complete business combinations, in the future. Some of our competitors have significantly more financial resources, a larger national or international network or presence that may enable them to respond to clients’ international needs more effectively, larger professional staffs and greater brand recognition than we do. Some have lower overhead and other costs and can compete through lower-cost service offerings. Our larger and capitalized competitors may be to respond to changes in the market, to compete for skilled professionals, to finance acquisitions and business combinations, to fund internal growth and technological and to compete for market share generally, which puts us at a competitive and could result in pricing pressures or of .
In addition, in our business, there are usually no long-term contracted sources of revenue and clients could seek similar services from a competitor at any time. If we are unable to compete successfully with our existing competitors or with any new competitors, we will not be able to implement our growth strategy, which could materially adversely affect our business, financial condition and results of operations.
Since our business depends in large part on professional relationships and networks, our business has relatively low barriers to entry for experienced professionals electing to start their own firms or work independently. In addition, it is relatively easy for professionals to change employers. As a result, we could face additional competition from new firms that may be formed in the future.
If we cannot compete effectively or if the costs of competing, including the costs of hiring and retaining professionals, become too expensive, our revenue growth and financial results could be adversely affected and may differ materially from our expectations. Additionally, our competitors may adopt and deploy new technologies, such as AI and machine learning, more rapidly or successfully than we do, which may materially adversely affect our competitive position, financial condition and results of operations.
Our 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.
We currently generate a substantial majority of our revenue on a time and materials basis, and to a lesser extent, by fixed-fee contracts, and contingent fee contracts. In the future, our revenue and profitability could vary materially depending on changes in the nature of services provided, as well as the stage of performance at which the right to receive fees is finally determined.
Our profitability could be adversely affected when we incur costs that we cannot bill to our clients. Each of our engagements involves a level of risk that we could underestimate the expenses, time and resources necessary for the client engagement. The rates we are able to charge for our services are affected by a number of factors, including general economic and political conditions; the competitive environment in our industry; the introduction of new technologies (such as generative AI), services or products by competitors, which could reduce our ability to obtain favorable pricing and impact our overall economics for the services we offer; our ability to accurately estimate our costs; and the procurement practices of our clients. There may also be fee adjustments if we cannot bill for the time incurred. Engagement costs may increase for many reasons, including technical challenges, delays, workforce-related issues, inaccurate initial cost estimates, inability to achieve efficiencies, changing laws or regulations, inflation and natural . If we are to
manage and control these costs, our operating results could be adversely affected, and we may be unable to retain existing clients or secure future engagements.
In the future, some clients could increasingly prefer alternative fee arrangements that may place limitations on our fee structure, or that may shift more of our revenue-generating potential to back-end contingent and success fee arrangements, particularly if we expand our service offerings to provide legal advice. With respect to such alternative fee arrangements, there is a risk that the cost of providing services exceeds the fees we collect during all or a portion of the term of the engagement. In such cases, our failure to manage the engagement efficiently or collect the success or performance fees could expose us to a greater risk of loss on such engagement than other fee arrangements or may cause variations in our revenue and operating results due to the timing of achievement of the performance-based criteria, if achieved at all. Our ability to service clients with these fee arrangements may not directly correlate to our costs incurred, which could impact or result in a of the of such engagements, and therefore could affect our financial results.
Our profitability could suffer if we are not able to effectively utilize our employees, maintain operational efficiencies or manage our cost structure.
Our failure to manage the utilization of our professionals who generally bill on an hourly basis, or maintain or increase the hourly rates we charge our clients for our services, could result in adverse consequences, such as non- or lower-revenue-generating professionals, increased employee turnover, fixed compensation expenses in periods of declining revenue, and the inability to appropriately staff engagements.
A number of factors affect the utilization of our professionals, some of which are outside our control, including general economic and financial market conditions; the complexity, number, type, size and timing of client engagements; the level of demand for our services; appropriate staffing levels in light of changing client demands, expectations or market conditions; our ability to transition our employees efficiently from completed engagements to new engagements; the transition period for new hires that results in a temporary drop in utilization; unanticipated changes in the scope of client engagements; our ability to forecast demand for our services; conditions affecting our clients’ businesses and industries as well as general economic conditions; competition, business combinations and acquisitions. In addition, our expansion into or within lines of business or geographic locations where our brand is not well-known or where demand for our services is not well-developed could also contribute to low or lower utilization rates in certain service offerings or locations.
Our people are our primary asset and account for the majority of our expenses. If we are unable to manage staffing levels on a timely basis in light of changing opportunities or conditions, which may include either insufficient or excess personnel than required to meet client demand, our ability to accept or service client engagements, take advantage of positive market and industry developments, expand into new service offerings, realize future growth or manage our cost structure could be negatively affected, which could negatively impact our client relationships, competitiveness, revenue and profitability.
Claims 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.
Our reputation is potentially susceptible to damage by actions or statements made by current or former clients and employees, competitors, vendors, adversaries in legal proceedings, government regulators, professional licensing organizations, as well as members of the investment community and the media. Our engagements may involve matters that may result in a severe impact on a client’s business, cause the client a substantial monetary loss or prevent the client from pursuing business opportunities. Additionally, some of our engagements may involve matters or clients that may be socially or politically unpopular, which could result in adverse publicity and harm our reputation. Our ability to retain existing clients and generate repeat engagements depends upon our ability to maintain a high degree of client satisfaction. Our ability to attract new clients and future acquisition targets or business combinations, and to hire and retain highly skilled professionals, depends upon our reputation in the professional services industry. As a result, any or publicity involving the quality of our services or the reputation of our professionals, matters or clients may be more than similar or publicity relating to businesses in other industries. There is a risk that information about us, even if untrue, could affect our business, could cause to our reputation and be to repair. Additionally, any or publicity involving Andersen Global member or firms, or the of Andersen Global to manage any internal between member or firms, may affect our brand and reputation. Similarly, any or publicity involving Andersen Consulting partner firms, or the of Andersen Consulting to manage any internal between partner firms, may affect our brand and reputation. See the risk factor titled “-If we to continue to from our existing business relationships and to establish new relationships in the future, our results of operations could be affected.”
Damage to our reputation could also reduce the value and effectiveness of our brand name and could reduce investor confidence in us. Any such claims, adverse publicity or negative connotations may adversely affect our reputation or the reputations of our professionals, or may otherwise harm our ability to attract or retain clients, employees and future acquisition targets and business combinations, all of which could have an adverse effect on our results of operations, business or prospects.
Adverse 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.
We are subject and party to, and may in the future become subject and a party to, a variety of litigation or other claims and suits that arise from time to time in the ordinary course of our business. Our business is subject to the risk of litigation involving current and former employees, clients, competitors, or others through private actions, class actions, whistleblower claims, administrative proceedings, regulatory actions, criminal proceedings or other litigation. Regardless of the merits of the claims, the cost to defend current and future litigation may be significant, and such matters can be time-consuming and divert management’s attention and resources. The results of litigation and other legal proceedings are inherently uncertain, and adverse judgments or settlements in some or all of these legal disputes may result in materially monetary , , , or injunctive relief us. Any or , even if fully indemnified or insured, could our reputation and make it more to compete effectively or to obtain adequate insurance in the future. Moreover, as we expand our service offerings into new areas, we may be to additional and evolving risks specific to these new areas.
The results of litigation and other legal proceedings are inherently uncertain and adverse judgments or settlements in some or all of such disputes may result in materially adverse monetary damages or injunctive relief against us. Any claims or litigation, even if fully indemnified or insured, could also damage our reputation and make it more difficult to compete effectively or obtain adequate insurance coverage in the future.
Consolidation in the professional services industry could have a material adverse effect on the competitiveness of our business, financial condition and results of operations.
Consolidation in the professional services industry could create increased pricing and competitive pressures for the industry as a whole and our business in particular. In addition, consolidation could also result in an increasing number of very large companies offering services across a wide variety of individual and business needs. Consolidation activity may result in new competitors with greater scale, a broader footprint or offerings that are more attractive than ours. We expect new and existing companies in the professional services industry to continually revise and improve their business models. The growth of these companies, which may have significantly more resources, market share and marketing power than we do, could also result in increased pricing and other competitive pressures for us. These companies could also be quicker or more effective at acquiring and integrating professionals or businesses in international markets than we are, which may impede our ability to grow. Accordingly, industry consolidation could harm our business.
We 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.
We have a relatively short history of operating at our current scale. As a result, we have limited financial and operational data that can be used to evaluate our future business and prospects. Our ability to accurately forecast our future results of operations is limited and subject to a number of uncertainties, including our ability to plan for and forecast future growth. Any evaluation of our business and prospects must be considered in light of our short operating history at our current scale, which may not be indicative of future performance. Because of our limited operating history at our current scale, we face increased risks, uncertainties, expenses, and challenges, including our ability to execute on our growth strategy and the other the risks and uncertainties discussed under this Part I, Item 1A “Risk Factors.”
We 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.
Our operating results and key metrics may fluctuate due to a variety of factors, many of which are outside of our control. As a result, comparing our operating results on a period-to-period basis may not be meaningful. Our past results should not be relied on as an indication of our future performance. If our revenue or operating results fall below the expectations of investors or research analysts, or below any guidance we provide to the market, the price of our Class A common stock could decline substantially.
Our operating results have varied in the past and are expected to continue to do so in the future. In addition to other risks and uncertainties discussed under this Part I, Item 1A “Risk Factors,” factors that may affect our quarterly operating results, business and financial condition include the following:
• failure to successfully manage or integrate any acquisitions or business combinations;
• demand for our services;
• failure to recruit or retain talent or key personnel;
• market acceptance of our current and future services;
• changes in the competitive dynamics of the professional services industry;
• our ability to control and predict costs, including our operating expenses;
• the impact of non-cash expenses, such as the equity-based compensation and restructuring expenses discussed under Part II, Item 7 “Management’s Discussion and Analysis of Results of Operation and Financial Condition”;
• our revenue mix in a particular quarter;
• the seasonality of our business;
• the timing and size of new engagements;
• timing of client payments;
• the outcome or publicity surrounding any pending or threatened lawsuits or professional licensing organization disciplinary action;
• general economic and political conditions;
• changes in the legal or regulatory environment; and
• unexpected events, including those resulting from climate change, public health emergencies, international or civil conflicts, wars or other hostilities, such as the 2026 conflict in Iran and escalating tensions in the Middle East, terrorism, tariffs or other trade actions, or other geopolitical events and any disruption these events may cause the global economy.
Based upon the factors described above and those discussed elsewhere under this Part I, Item 1A “Risk Factors,” we have a limited ability to forecast the amount and mix of future revenue and expenses, which may cause our operating results to fall below any guidance we provide to the market or the expectations of investors or research analysts. Fluctuations in our quarterly operating results could limit or prevent investors from readily selling their shares and may otherwise negatively affect the market price and liquidity of our Class A common stock. In addition, in the past, when the market price of a stock has been volatile, holders of that stock have sometimes instituted securities class action litigation against the company that issued the stock. If any of our shareholders brought a lawsuit against us, we could incur substantial costs defending the lawsuit. Such a lawsuit could also divert the time and attention of our management away from our business, which could significantly harm our profitability and reputation.
Our business activity and associated revenue is subject to seasonality, which could result in fluctuations in the market price of our Class A common stock.
Historically, our business activity and associated revenue has been highest in our first and third quarters, primarily driven by our tax services offerings. We expect that this seasonality will continue to be a factor in our results of operations and may reduce our ability to predict our cash flows and optimize the timing of our operating expenses. Additionally, our revenue in any given period is dependent on the number of fee-paying clients in such period and the size of engagements on which we are advising. As a result, we believe that comparisons of our results of operations between different quarters within a single fiscal year are not necessarily meaningful and that these comparisons cannot be relied upon as indicators of our future performance. In the event that any fluctuations in our revenue and results of operations result in our failure to meet our forecasts, or the forecasts of research analysts, the market price of our Class A common stock could fluctuate or decline.
International expansion will subject us to additional costs and risks and our plans may not be successful.
Currently, we only have offices in the United States, and historically the vast majority of our revenue has been derived from U.S. clients. During the first quarter of 2026, Andersen entered into definitive agreements for the acquisition of four member firms located in the strategically important areas of Africa and Latin America and for a business combination with one member firm located in the strategically important area of Canada. These transactions are expected to close in the second quarter of 2026, subject to the satisfaction of certain closing conditions. Further expansion into markets outside the United States is one of our key long-term strategies for the future growth of our business. There are, however, significant costs and risks inherent in providing our current or future services in international markets, including failure to effectively establish and maintain our brand and reputation; time and difficulty in building and maintaining a widespread client
network; increased costs, including compliance costs; potentially lower margins in some regions; potentially longer collection cycles in some regions; increased competition from local or regional providers of similar services; compliance with foreign laws, regulations and professional licensing rules, including taxes and enhanced privacy laws, rules and regulations; establishing and maintaining effective internal controls at foreign locations and the associated increased costs; the uncertainty of protection for intellectual property rights in some countries and practical difficulties of enforcing rights abroad; compliance with applicable anti-bribery, anti-corruption, sanctions, and anti-money laundering laws; currency exchange rate fluctuations and related effects on our results of operations; socioeconomic, labor or political instability in foreign economies and markets; compliance with tax, employment, immigration, and labor laws for employees living or traveling abroad; tariffs and trade actions; and other costs and risks of doing business internationally.
These and other factors could harm any future international operations and, consequently, our business, results of operations, and financial condition. Further, we may incur significant operating expenses as a result of any international expansion, and it may not be successful. We have limited experience with regulatory environments and market practices internationally, and we may not be able to penetrate or successfully operate in new markets. We also have limited operating experience outside of the United States and in our expansion efforts we may encounter obstacles we do not face in the United States, including cultural and linguistic differences; differences in regulatory environments, labor practices and market practices; differences in professional licensing rules; difficulties in keeping abreast of market, business and technical developments; and preferences of foreign clients. We may also encounter difficulty expanding into international markets because of limited brand recognition, leading to delayed or limited acceptance of our services in these markets and increased marketing costs to establish our brand. Accordingly, if we are to expand internationally, our financial condition and results of operations could be .
If 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.
Our success depends, in part, on continuing to benefit from our existing business relationships, including experienced professionals within the Andersen Global network, former clients and third-party vendors, as well as our existing client relationships. We depend on referrals within Andersen Global to attract new clients and to connect existing clients with experienced professionals outside the United States when the need arises. We also obtain many of our new engagements from former or current clients, or from referrals by those clients, and may increasingly depend on third-party service providers to support the infrastructure needed to effectively run and grow our business. We also plan to continue expanding our relationships with existing clients, including by offering additional services across our platform such as in connection with a potential expansion of our relationship with Andersen Consulting. If we fail to continue to benefit from these existing relationships, or fail to establish and maintain new relationships in the future, our results of operations could be adversely affected.
We 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.
Our ability to maintain continuing relationships with our clients and successfully obtain payment for our services is essential to the growth and profitability of our business. However, the volume of work performed for any specific client is likely to vary from year to year, and we generally do not have long-term commitments from clients to use our services. A client in one year may not provide the same level of revenue for us in any subsequent year. Further, one or more of our clients could be acquired, and there can be no assurance that the acquirer would choose to use our services in respect of such client to the same degree as previously, if at all. In addition, the services we provide to our clients, and the revenue and income from those services, may decline or vary as the type and quantity of services we provide changes over time. Our business model also depends on relationships our teams develop with our clients so that we can understand our clients’ needs and deliver services that are tailored to those needs. If a client is not satisfied with the quality of work performed by us, or with the services delivered, we could incur additional costs to address the situation, the profitability of that work might be impaired, and the client’s with our services could our ability to obtain additional work from that client. In particular, clients that are not might seek to existing contracts, which could mean that we could incur costs for the services performed with no associated revenue. This could also direct future business to our competitors.
We may also fail to assess the creditworthiness of our clients adequately or accurately. Our clients’ ability to terminate engagements with little or no notice, and our clients’ inability or unwillingness to pay for services we performed, can make our future revenue and profitability difficult to predict. Although a substantial majority of our revenue is generated from clients who also contributed to our revenue during the prior year, our engagements with our clients are typically for engagements that are singular in nature. Therefore, we must seek to obtain new engagements when our current engagements end.
The engagement letters that we typically enter into with clients do not obligate them to continue to use our services. Termination, non-renewal, delay or renegotiation of an engagement could cause us to experience a higher-than-expected number of unassigned employees and thus compress our margins until we are able to reallocate our headcount. Clients that delay payment, request modifications to their payment arrangements, or fail to meet their payment obligations to us could increase our cash collection time, cause us to incur bad debt expense, or cause us to incur expenses in collections actions. If we are unable to replace clients or revenue as engagements end, or if clients unexpectedly cancel engagements with us or curtail the scope of our engagements and we are unable to replace the revenue from those engagements, eliminate the costs associated with those engagements or find other engagements to utilize our professionals, our financial results could be materially affected.
Volatile, negative or uncertain economic and geopolitical conditions could adversely affect our business and materially reduce our revenue.
Global macroeconomic and geopolitical conditions can affect certain of our service offerings and our clients’ businesses. Volatile, negative and uncertain economic and geopolitical conditions have in the past undermined and could in the future cause our clients to reduce or defer their spending on new initiatives, resulting in clients reducing, delaying or eliminating spending under existing engagements, particularly in our mergers and acquisitions, or M&A, transactions services and other commercial service offerings involving transactional or operational initiatives, which would negatively affect our business.
We are not able to predict the positive or negative effects that future events or changes to the U.S. or global economies or political landscapes will have on our business, any particular service offerings, or any of our clients. These events and changes include fluctuations in U.S. and/or global economies, including economic downturns or recessions and the strength and rate of any general economic recoveries; the condition of the U.S. or global financial markets and the availability, costs, and terms of credit and credit modifications, including interest levels and inflationary pressures; levels of M&A activity; new and complex laws and regulations, repeals of existing laws and regulations or changes of enforcement of laws, rules and regulations; other economic, geographic or political factors; public health crises; tariffs and trade actions; the effects of climate change; and general business or other conditions. For example, the current U.S. administration has expressed strong concerns about imports from countries that it perceives as engaging in trade practices, and has imposed tariffs or other restrictions on products, components or raw materials sourced from those countries. Moreover, these new tariffs, or other changes in U.S. trade policy, have triggered and may in the future trigger actions by affected countries, including reciprocal tariffs, including the possibility of tariffs on services.
Any of these events or changes, as well as other events outside our control, may have adverse effects on one or more of our service offerings or our clients’ businesses or industries. Ongoing economic and geopolitical volatility and uncertainty and changes in client demands affect our business in a number of other ways, including making it difficult to accurately forecast client demand and revenue. Changing demand patterns and their impact on us and our clients could have a significant negative impact on our results of operations.
Global inflationary pressures have in the past increased and may in the future increase the prices of goods and services, which could raise the costs associated with providing our services, diminish our ability to compete for new clients, and/or reduce willingness of new or existing clients to fully utilize our services.
For a variety of reasons, including geopolitical factors, the global economy in which we operate has faced, and may continue to face, heightened inflationary pressure, impacting the cost of doing business. These inflationary pressures have been and could continue to be exacerbated by geopolitical turmoil and economic policy actions, including new or increased tariffs, and the duration of such pressures is uncertain. In the future, adjustments to our fee structure may be insufficient to counter inflationary cost pressures, which may result in significant cost overruns on our engagements or an unwillingness of clients to fully utilize our services. To the extent that inflationary pressure affects our cost of revenue and general overhead, we may face the choice of raising the rates we charge for our services to try and maintain our margins or reduce or maintain our price structure to generate business. This could result in reduced profitability, or even losses, as inflation increases and therefore could adversely affect our financial results.
War, 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.
Our business may be negatively affected by instability, disruption or destruction in the geographic regions where we operate or by volatile conditions worldwide, and any disruption these events may cause to the global economy. War or other hostilities, such as the 2026 conflict in Iran and escalating tensions in the Middle East, terrorism, riot, civil insurrection or social unrest, man-made and natural disasters, and pandemics, communicable disease outbreaks and other
regional or global health crises, may cause clients to delay their decisions on spending for our services. Our business continuity and disaster recovery plans may not be effective at preventing or mitigating the effects of any such disasters, particularly in the case of simultaneous or catastrophic events. These events pose significant security risks to our people, the facilities where they work, our operations, electricity and other utilities, communications, travel, and network services, and the disruption of any or all of them could adversely affect our ability to service our clients and materially adversely affect our financial results.
Payments 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.
Professional services firms like ours often experience higher average accounts receivable days outstanding compared to many other industries, which may be magnified if the general economy worsens. If our collections become slower, our liquidity may be adversely impacted. We monitor the aging of receivables regularly and make assessments of the ability of our clients to pay amounts due. We provide for potential bad debts and recognize additional reserves against bad debts as we deem it appropriate. Notwithstanding these measures, our clients may face unexpected circumstances that adversely impact their ability to pay their obligations to us and we may face unexpected losses as a result.
We typically do not receive a retainer before we begin performing services for a client. In the cases where we have received retainers, we cannot assure the retainers will adequately cover our fees for the services we perform on behalf of these clients. In some cases, we have pre-bill arrangements with clients, and the decline of client acceptance of these arrangements could result in a longer accounts receivable cycle. Additionally, from time to time we receive requests to discount our fees or to negotiate lower rates for our services and to agree to terms that may limit the size of an engagement or our ability to pass-through costs to our clients. We consider these requests on a case-by-case basis. We routinely receive these types of requests and expect this to continue in the future. In addition, our clients and prospective clients may not accept billing rate increases that we put into effect or implement in the future. Fee discounts, pressure not to increase or pressure to decrease our rates, and less advantageous contract terms could result in the loss of clients, lower revenue and operating income, higher costs and less profitable engagements. More discounts or write-offs than we expect in any period would have a impact on our results of operations. There is no assurance that significant client engagements will be renewed or replaced in a timely manner or at all, or that they will generate the same volume of work or revenue or be as as past engagements.
We could be subject to reputational and legal risk arising from, among other things, actual or perceived conflicts of interest.
We face the possibility of an actual, potential or perceived conflict of interest where we represent a client on a transaction in which an existing client is a party. We may be asked by two potential clients to act on their behalf on the same transaction, including by two clients as potential buyers in the same acquisition transaction. In each of these situations, we face the risk that our current policies, controls and procedures may not timely identify or appropriately manage such conflicts of interest. It is possible that actual, potential or perceived conflicts could give rise to client dissatisfaction or litigation. Appropriately identifying and managing actual or perceived conflicts of interest is complex and difficult, and our reputation could be damaged if we fail, or appear to fail, to deal appropriately with one or more potential or actual conflicts of interest. This risk could increase as we expand our service offerings, particularly if we begin providing legal advice and become subject to the professional licensing rules and ethical requirements related to those services. Reputational risk or arising from of interest could have a material effect on our reputation which could materially affect our business in a number of ways, including a of some potential clients to engage our services.
From time to time we decide that we cannot or should not accept an engagement from an existing or prospective client or represent multiple clients in connection with the same or competitive engagements. In addition, upon occasion, we decide that we should or must resign from a client engagement. Such decisions may negatively impact our revenue, growth and financial results. While we follow internal practices to assess real and potential issues in the relationships between and among our clients, engagements, services and professionals, such concerns cannot always be avoided.
Our 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.
Our estimates of market opportunity and forecasts of market growth, and our ability to capture a meaningful share of this market, may prove to be inaccurate. Market opportunity estimates and growth forecasts are subject to significant uncertainty and are based on assumptions and estimates that may not prove to be accurate. The variables that affect the calculation of our market opportunity are also subject to change over time.
We cannot assure you that any particular number or percentage of service offerings, clients or industries covered by our market opportunity estimates will purchase our services at all or generate any particular level of revenue for us. In addition, any expansion in our market opportunity depends on a number of factors, including the cost, performance and perceived value associated with our service offerings and those of our competitors. Even if the market in which we compete meets the size estimates and growth we forecast, our business could fail to achieve a substantial share of this market or grow at a similar rate, if at all. Our growth is subject to many risks and uncertainties. Accordingly, the estimates of market opportunity or forecasts of market growth we have made and may make should not be taken as indicative of our future growth.
Risks Related to Government Regulation
Government regulations, interpretations and fiscal, regulatory and other policies are subject to changes, which could impact our clients and materially reduce our revenue.
Changes in laws and regulations, or the interpretation and application thereof, as well as fiscal, regulatory and other policies, could result in changes in the amount or the type of services required by businesses and individuals, as well as our operations. Any changes in law, as well as regulations and policies, including by means of legislative changes and/or executive orders, could affect us or our clients in substantial and unpredictable ways. Compliance with such requirements, if and when applicable to us, may be time-consuming and resource-intensive and may require us to hire or retain additional personnel or consultants and to implement additional controls. Our business may face increased scrutiny, including from investors and clients, related to these activities and our related disclosures and compliance efforts. We cannot be sure that future laws, regulations and policies, or the interpretation and application thereof, will provide the same or similar opportunities for us to provide our services to current or potential clients, or to meet our operational, financial and strategic objectives. Additionally, extensive and evolving regulation to which our clients are subject, including changes in tax laws, regulations and interpretations thereof, could increase potential risk of omissions, errors or other compliance failures, which could increase our costs and may result in us.
Changes 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.
Significant changes to tax laws, rules and regulations, and, in particular, a radical simplification of tax laws, rules and regulations, could impact our clients, decrease demand for our services and negatively impact our business. In addition, changes to tax laws, rules and regulations could negatively affect our reported financial results and increase our cash tax payment obligations, including by reason of changes that increase tax rates, eliminate or reduce deductions, or affect the utility or value of deferred tax assets or liabilities. We cannot predict future changes in the tax laws, regulations, administrative guidance or judicial decisions to which we are subject or that could apply to our clients or our business.
In addition, as our business continues to grow and if we become more profitable, our tax obligations could significantly increase. Additionally, from time to time in the normal course of business we may be subject to audit by the tax authorities. Such tax authorities may disagree with tax positions we take, and if any such tax authority were to successfully challenge any such position, this may adversely affect our effective tax rate, tax payments or financial condition.
We and the third parties with whom we work are subject to stringent and evolving U.S. and foreign laws, regulations, and rules, contractual obligations, industry standards, policies and other obligations related to data privacy and security. Actual or perceived failure to comply with such obligations could harm our business.
In the ordinary course of business, we collect, receive, store, process, generate, use, transfer, disclose, make accessible, protect, secure, dispose of, transmit, and share (collectively, process) personal data and other sensitive information, including proprietary and confidential business data, trade secrets, intellectual property, sensitive third-party data, and other sensitive data, for example such as business plans, transactions and financial information. Our data processing activities subject us to numerous data privacy and security obligations, such as various laws, regulations, guidance, industry standards, external and internal privacy and security policies, contractual requirements, and other obligations relating to data privacy and security.
U.S. and non-U.S. governmental authorities have proposed or adopted or are considering proposing or adopting data security and/or data privacy statutes or regulations. Numerous U.S. states have enacted comprehensive privacy laws that impose certain obligations on covered businesses, including providing specific disclosures in privacy notices and affording
residents with certain rights concerning their personal data. As applicable, such rights may include the right to access, correct, or delete certain personal data, and to opt-out of certain data processing activities, such as targeted advertising, profiling, and automated decision-making. The exercise of these rights may impact our business and ability to provide our products and services. Certain states also impose stricter requirements for processing certain personal data, including sensitive information, such as conducting data privacy impact assessments. These state laws allow for statutory fines for noncompliance. For example, the California Consumer Privacy Act of 2018 (CCPA) applies to personal data of consumers, business representatives, and employees who are California residents, and requires businesses to provide specific disclosures in privacy notices and honor requests of such individuals to exercise certain privacy rights. The CCPA provides for fines and allows private litigants affected by certain data breaches to recover significant statutory damages.
Several countries have established specific legal requirements for cross-border data transfers and governmental authorities and privacy advocates around the world continue to propose new regulatory actions concerning data protection. For example, the General Data Protection Regulation (GDPR) regulates the collection, use, and retention of personal information in the EU. In addition, the evolution of global privacy treaties and frameworks has created compliance uncertainty and increased complexity, and client sensitivity to privacy continues to increase. Moreover, several jurisdictions are considering regulatory frameworks for AI that implicate data protection laws. Each of these privacy, security and data protection requirements imposes limitations on us, some of which could be significant, requires changes to our business practices, requires notification to clients or employees of a security incident, restricts our use or storage of personal information, possibly limits our use of third-party tools and vendors, or could cause changes in client behavior that may make our services more costly or less efficient, causing clients to become less likely to enter into engagements with us and may harm our future financial results. Additionally, any actual or alleged with these laws and regulations, or to meet client expectations would result in publicity or to our reputation and subject us to , or other remedies, including demands that we modify or existing business practices, and us to significant , and other . We have experienced data security in the past, and while none of these have had a material impact on our business, we cannot guarantee that there will not be any material security in the future. The increased emphasis on information security and the requirements to comply with applicable data security and privacy standards and protocols imposed by law, regulation, industry standards and contractual obligations has increased, and could continue to increase, our related costs of doing business and could impact our financial results.
Additionally, under various privacy laws and other obligations, we may be required to obtain certain consents to process personal data. For example, some of our data processing practices may be challenged under wiretapping laws, if we obtain consumer information from third parties through various methods, including chatbot and session replay providers, or via third-party marketing pixels. These practices may be subject to increased challenges by class action plaintiffs. Our inability or failure to obtain consent for these practices could result in adverse consequences, including class action litigation and mass arbitration demands.
We are subject to the FCPA, other applicable anti-corruption, anti-bribery laws, and trade control laws. Compliance with these laws requires significant resources, may impact our ability to service clients in certain countries in the future, and non-compliance may result in civil or criminal penalties and other remedial measures.
We are subject to the U.S. Foreign Corrupt Practices Act (FCPA) and other anti-bribery and anti-corruption laws in the countries in which we conduct activities. Anti-corruption and anti-bribery laws prohibit companies and their employees, agents, contractors, and other intermediaries from authorizing, promising, offering, or providing, directly or indirectly, improper payments or anything else of value to recipients in the public or private sector. Some of our client relationships outside of the U.S. are with governmental entities and are therefore subject to such anti-bribery laws. In addition, we are subject to U.S. and other applicable trade control laws, including export and import controls and trade sanctions, such as the U.S. sanctions regulations administered by the U.S. Department of the Treasury’s Office of Foreign Assets Controls, which may prohibit or restrict the sale or supply of certain products and services to certain governments, persons, entities, countries, and territories, including those that are the target of comprehensive sanctions.
Our compliance program contains controls and procedures designed to ensure our compliance with the FCPA and other anti-corruption, anti-bribery, and trade control laws and regulations. The continuing implementation and ongoing development and monitoring of our compliance program may be time consuming, expensive, and could result in the discovery of compliance issues or violations by us or our employees of which we were previously unaware.
Any violations of these or other laws, regulations and procedures by our employees or agents, including companies we acquire, could expose us to administrative, civil or criminal penalties, fines or business restrictions, which could have a material adverse effect on our results of operations and financial condition and would adversely affect our reputation.
The SEC oversees and directly regulates the activities of our subsidiary that is a registered investment advisor under the Advisers Act.
Our subsidiary, Andersen Tax LLC, is registered with the SEC as an investment advisor under the U.S. Investment Advisers Act of 1940 (the Advisers Act). Our SEC-registered investment advisor subsidiary is subject to the requirements and regulations of the Advisers Act that include anti-fraud provisions, upholding fiduciary duties to advisory clients, maintaining an effective compliance program, managing conflicts of interest, record-keeping and reporting requirements, and disclosure requirements. In addition, our registered investment advisor subsidiary is subject to routine periodic and other examinations by the staff of the SEC. The Advisers Act generally grants the SEC broad administrative powers, including the power to limit or restrict an investment advisor from conducting advisory activities if it fails to comply with federal securities laws. Additional sanctions that may be imposed for failure to comply with applicable requirements include the prohibition of individuals from associating with an investment advisor, the revocation of registrations and other censures and fines. Any adverse findings resulting from such examination may result in administrative enforcements or significant reputational . to comply with the obligations imposed by the Advisers Act could result in , sanctions, restrictions on the activities of us or our personnel and reputational .
Our 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.
Our business is subject to regulation and oversight by governmental authorities. The laws and regulations governing our operations, and interpretations of those laws and regulations, are increasing in number and complexity, change frequently and can be inconsistent or conflict with one another. Our ability to conduct our business may be adversely affected as a result of any new requirements imposed by any governmental authorities that have jurisdiction over us. We may be adversely affected by changes in the interpretation or enforcement of existing laws and rules by these governmental authorities. Our failure to comply with applicable laws or regulations could result in adverse publicity and reputational harm as well as fines and suspensions of personnel, could cause us to lose clients, and could impair the retention or recruitment of employees or our ability to attract future acquisition targets or business combinations.
Risks Related to Information Technology, Infrastructure and Intellectual Property
Rapid technological changes, including the widespread adoption of AI, could significantly impact our competitive position, client relationships and results of operations.
The professional services industry has been and continues to be impacted by significant technological changes and innovation. Those technological changes may reduce demand for our services, enable or accelerate the development of competitive products or services, or enable our current clients to reduce or bypass the use of our services. Additionally, rapid changes in AI, block chain-based technology, automation and related innovations are increasing the competitiveness landscape. We may not be successful in anticipating or responding to these changes and demand for our services could be further reduced by advanced technologies being deployed by our competitors, many of whom have greater resources than we do. Risks related to AI, including our use of third-party products incorporating AI, include the generation of factually incorrect or biased results, also known as hallucinations, data security vulnerabilities, potential IP infringement, and mishandling of confidential information. Poor implementation of new technologies, including AI, by us or our third-party service providers or technology vendors, could subject us to additional risks we cannot mitigate, which could have a impact on our results of operations and financial condition.
Our ability to anticipate developments in our industry, enhance our existing service offerings, develop and introduce new service offerings, and keep pace with changes and developments are critical to meeting changing client needs and expectations. Our ability to keep pace with, anticipate or respond to changes and developments is subject to a number of risks, including that:
• we may not be able to develop new, or update existing services, applications, tools and software quickly or inexpensively enough to meet our clients’ needs and expectations;
• it may be difficult or costly to make existing software work effectively and securely with new or changed operating systems or protocols;
• it may be difficult or costly to update existing software or develop new services to keep pace with evolving industry standards, methodologies, technologies, and regulatory developments at a pace and cost that is acceptable to our clients; and
• we may find it difficult to deliver high-quality client services consistently with new technologies and methodologies.
Technological developments may materially affect the nature of how we generate revenue. Some of these technological developments may reduce or replace, in whole or in part, the need for some of our services, which may cause clients to reduce or delay spending under existing engagements, delay entering into new engagements, or result in increased pricing pressure for our offerings. Such technological developments and spending delays or reductions can negatively impact our results of operations if we are unable to introduce new pricing models that reflect the value of these technological developments or if the pace and level of spending on new technologies are not sufficient to make up any revenue shortfall. The effort to gain technological expertise and develop new technologies in our business has required and may continue to require us to incur significant expenses. We may not be successful in anticipating or responding to these developments in a timely manner, or if we do respond, the services, products, technologies or methodologies we develop or implement may not be successful or competitive. Further, services, products, technologies or methodologies that our competitors develop may render our services non-competitive or . Our to our existing services and to develop and introduce new services to promptly and effectively address the needs of our clients could have a material effect on our business.
If 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.
We expect that we will need to integrate generative AI into our business to remain competitive in a rapidly evolving market. Generative AI is a type of AI that can take different types of inputs (such as text, image, audio, video, code, etc.) and generate new content using a variety of different modalities and based on a sophisticated and advanced set of rules. We expect to continue to make significant investments to build and support AI capabilities, either by developing proprietary technology or licensing the use of such technology, so that we can meet the needs of our clients and remain competitive, but there can be no assurance that our efforts will be successful or that we will be able to recoup the costs of such investments. If we are unable or slow to develop, license third-party or open source, adopt, and deploy generative AI technologies in our business, our competitiveness will suffer.
Generative AI technologies could disrupt the significant effort we put into identifying, recruiting, hiring, retaining, and efficiently utilizing our professionals and our ability to charge for their services. Our clients have asked, and may come to expect that we use generative AI to work on certain engagements for them at comparatively lower costs than human personnel. As we plan, develop, and implement changes to our business to balance those services that can only be performed by humans against those that can be performed by generative AI, we may have insufficient or excess personnel than required to meet client demand, and employee morale and our firm culture could suffer. Additionally, clients may be unwilling to pay rates for human personnel if they perceive that the same services can be performed by less expensive generative AI, and may seek other service providers or price concessions to retain their business, which could adversely affect our financial results.
Our use of generative AI tools may pose risks to our business and could subject us to legal liability.
We expect to use generative AI tools in the future. Using generative AI tools to produce content that can be indistinguishable from that generated by humans is a relatively novel development, with many of the benefits, risks and liabilities still unknown. Recent decisions of the U.S. Copyright Office suggest that we would not be able to claim copyright ownership in any text, images, or other materials that we develop through use of generative AI tools, and the availability of such protections in other countries is unclear. As a result, we could have no remedy if third parties reused those same materials, or similar materials also generated by AI tools.
We may face claims from third parties claiming infringement of their intellectual property rights or non-compliance with open source software or other license terms. We could also be subject to claims from providers of generative AI tools if, for example, we use any of the generated materials in a manner inconsistent with their terms of use. Any of these claims could result in legal proceedings and could require us to purchase a costly license, comply with the requirements of open source software license terms, or limit or cease using the implicated software, or other materials or content. Our use of generative AI tools may also present additional security risks because the generated source code may have been modeled from publicly available code, which may make it easier for hackers and other third parties to determine how to breach our systems that rely on the code. Any of these risks could be to eliminate or manage, and, if not addressed, could have a material effect on our business, results of operations, financial condition and future prospects.
We may face legal, reputational and financial risks relating to cybersecurity incidents or attacks affecting us. If our information technology systems, or those of third parties with whom we work, are compromised, we could face legal, reputational and financial risks, and the failure to protect our or any of our clients’ information against misuse or disclosure could materially and adversely harm our reputation and our business.
Our systems are vulnerable to cybersecurity risks, and we are subject to potential disruption caused by such activities. We are subject to and routinely face cyber-based attacks and attempts by hackers and similar unauthorized users to gain access to or corrupt our information technology systems. Such attacks may have various goals, from seeking confidential information to causing operational disruption. We cannot assure you that we will not experience material disruptions or suffer material adverse effects in the future. Any future significant violations of our data security or privacy would result in serious consequences the loss of business, litigation, regulatory investigations, , and expenses, any of which could our reputation and affect the growth of our business. While we have deployed resources that are responsible for maintaining what we consider to be appropriate levels of cybersecurity, and while we utilize third-party technology products and services to help identify and protect our information technology systems and infrastructure security and cyber-, we do not believe such resources, products or services can provide absolute protection all potential risks and . These measures may not be adequate or to prevent, identify, or mitigate attacks by hackers, foreign governments, or other actors or caused by human , , or other . For example, cyber-attacks, internet-based activity, online and offline , and other similar activities the confidentiality, , and availability of our sensitive information and information technology systems, and those of the third parties with whom we work. Such are prevalent and continue to rise, are increasingly to detect, and come from a variety of sources, including traditional computer “hackers,” actors, “hacktivists,” organized actors, personnel (such as through theft or ), sophisticated nation states, and nation-state-supported actors.
We and the third parties with whom we work are subject to a variety of evolving threats, including but not limited to social-engineering attacks (including through deep fakes, which may be increasingly more difficult to identify as fake, and phishing attacks), malicious code (such as viruses and worms), malware (including as a result of advanced persistent threat intrusions), denial-of-service attacks, credential stuffing attacks, credential harvesting, personnel misconduct or error, ransomware attacks, supply-chain attacks, software bugs, server malfunctions, software or hardware failures, loss of data or other information technology assets, adware, telecommunications failures, earthquakes, fires, floods, attacks enhanced or facilitated by AI, and other similar threats.
In particular, severe ransomware attacks are becoming increasingly prevalent and can lead to significant interruptions in our operations, ability to provide our products or services, loss of sensitive data and income, reputational harm, and diversion of funds. Extortion payments may alleviate the negative impact of a ransomware attack, but we may be unwilling or unable to make such payments due to, for example, applicable laws or regulations prohibiting such payments.
We are also dependent on security measures that some of our third-party data storage, software as a service, or cloud vendors and clients are taking to protect their own systems and infrastructures. There can be no assurance that we will not experience material disruptions or suffer material adverse effects in the future if our third-party vendors do not maintain adequate security measures, do not require their sub-contractors to maintain adequate security measures, do not perform as anticipated and in accordance with contractual requirements, or become targets of cyber-attacks.
In providing services to clients, we often manage, utilize and store sensitive or confidential client or other third-party data, including personal data and proprietary information. Maintaining the confidentiality of proprietary, confidential and trade secret information is critical to maintaining the trust of our clients, the success of our business and the reputation of our company. Our systems, which include those of third parties on whom we rely, can fail or may not operate properly or become disabled as a result of network security failures. We are dependent on information technology networks and systems to securely process, transmit and store electronic information and to communicate with our people, clients, and vendors. As the breadth and complexity of this infrastructure continues to grow, including as a result of the increasing reliance on, and use of, mobile technologies, social media and cloud-based services, and as cyberattacks become increasingly sophisticated, we expect the risk of security incidents and cyberattacks to continue to increase.
Threat actors may leverage emerging AI technologies to develop new hacking tools and attack vectors, exploit vulnerabilities, obscure their activities, and increase the difficulty of threat attribution. Such incidents could lead to shutdowns or disruptions of or damage to our systems and those of our clients and vendors, and unauthorized disclosure of sensitive or confidential information, including personal data and proprietary business information. Such attacks, if successful, could harm our reputation, disrupt our or our clients’ business operations, cause us to incur unanticipated losses or expenses, result in unauthorized disclosures of confidential or proprietary information, cause us to clients and result in significant financial exposure and legal liability. Similarly, access to or through, of access to, or other involving, our systems and third-party data storage, software as a service, or cloud vendors, could result in publicity, significant remediation costs, legal liability, and to our reputation, and could have a material effect on our results of operations.
Cybersecurity threats are constantly expanding and evolving, and are becoming increasingly sophisticated and complex, increasing the difficulty and cost of detecting and defending against them and of maintaining effective security
measures and protocols. There is no certainty that we or the third-party vendors on whom we rely can maintain the confidentiality or prevent the misuse of our own or our clients’ information, or mitigate related damages. If we fail to effectively protect our clients’ or our own confidential or proprietary information from disclosure or misuse, our financial results and our reputation would be adversely affected.
Our engagements may not contain limitations of liability, and even where they do, there can be no assurance that these are sufficient to protect us from liabilities, damages, or claims related to our data privacy and security obligations. Further, we cannot be sure that our insurance coverage will be adequate or sufficient to protect us from or to mitigate liabilities arising out of our privacy and security practices, that such coverage will continue to be available on commercially reasonable terms or at all, or that such coverage will pay future claims. In addition to experiencing a security incident, third parties may gather, collect, or infer sensitive information about us from public sources, data brokers, or other means that reveals competitively sensitive details about our organization and could be used to undermine our competitive advantage or market position.
A 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.
Our business relies on maintaining well-functioning voice and data communications, online resource management, financial, billing, timekeeping and operational record management, and client service and data processing systems. Delays in modernizing any of our information systems, whether in-house or provided by any of our third-party data storage, software as a service, and cloud vendors, or failure of any such system to work properly, could require us to expend substantial time, effort and costs to adjust our processes, implement changes or corrections, or repair or replace such systems, in order to carry out our operations, including the preparation of our financial statements. Additionally, our business activities may be materially disrupted in the event of a partial or complete failure of any of these technologies, which could be due to software malfunction, computer virus attacks, conversion errors due to system upgrades, damage from flood or fire, earthquake, power loss, telecommunications failure, human , insider theft or , technical , entry, hackers, ransomware, terrorism, war or other hostilities, such as the 2026 in Iran and tensions in the Middle East, demands placed on internet infrastructure by growing numbers of users and time spent online, increased bandwidth requirements or other events beyond our control. Such events could result in in service to our clients, to our reputation, to our client relationships, and reduced revenue and .
Although we have disaster recovery procedures in place and insurance to protect against such contingencies, we cannot be sure that insurance or these services will continue to be available, cover all our losses or compensate us for the possible loss of clients occurring during any period that we are unable to provide business services. Additionally, our crisis management procedures, business continuity plans and disaster recovery capabilities may not be effective at preventing or mitigating the effects of such disruptions, particularly in the case of a catastrophic event. Loss of all or part of our IT infrastructure or systems for a period of time could hinder our performance or our ability to complete client projects on time which, in turn, could cause us to clients, lead to a reduction in revenue or otherwise materially affect our business and reputation.
If we or our consolidated subsidiaries or licensees are unable to protect or enforce our trademark rights, our business could be adversely affected.
We believe that developing and maintaining our brand is critical to achieving widespread acceptance of our services and is an important element in attracting new clients, employees and potential acquisition targets or business combinations, and retaining existing clients. We rely on our brand names, trademarks, trade names and service marks to distinguish our business and services from our competitors. If we or our consolidated subsidiaries or licensees are unable to adequately protect our brand, trademarks and related intellectual property rights, third parties may use brand names or trademarks similar to ours in a manner that may cause confusion or dilute our brand or trademarks, which could decrease the value of our brand. We may face uncertainties regarding the ownership, validity, and enforceability of certain trademarks that we use. For example, we have acquired certain trademarks, but we cannot guarantee that the assignors of those trademarks had a valid and enforceable right to these trademarks to assign to us. Further, in cases where our trademarks have been used by licensees, we may not have exercised sufficient quality control over their use of the marks.
If we do enforce our trademarks and our other intellectual property rights through litigation, we may not be successful and the litigation may result in substantial costs and diversion of resources and management attention. In the event that our trademarks are successfully challenged, the legal challenges may result in substantial costs, failure of pending trademark applications to mature to registration, cancellation of existing trademark registrations, monetary damages, and injunctions
pursuant to which we could be forced to rebrand the affected services and solutions, which could result in loss of brand recognition and could have a material adverse impact on our business.
We are subject to risk as it relates to software that we license or cloud-based software that we subscribe to from third parties.
We rely on third-party service providers for certain aspects of our businesses, including third-party data storage, software as a service, and cloud vendors, to host applications and for key financial and operational systems, and we expect to expand their use in the future. Operational risks could increase as such vendors increasingly offer mobile and cloud-based software services, as certain aspects of the security of such technologies may be complex, unpredictable or beyond our control. While we conduct due diligence on these providers with respect to their security and business controls, if these controls do not operate effectively, we may not be able to rely on their software and cyber attackers may be able to exploit vulnerabilities. The usage of cloud-based software increases the risk of operational disruption should internet service be interrupted. While we have implemented business contingency and other plans to facilitate continuous internet access, sustained or concurrent service denials or similar failures could limit our ability to service our clients or otherwise operate our business. Any such event or could have a material effect on our business, financial condition and results of operations.
Additionally, we license software from third parties, much of which is integral to our systems and our business. The licenses are generally terminable if we breach our obligations under the license agreements. If any of these relationships were terminated or if any of these vendors were to cease doing business or cease to support the applications we currently utilize, we may be forced to spend significant time and expense to replace the licensed software, and necessary replacements may not be available on reasonable terms, if at all.
Risks Related to Financial and Accounting Matters
We have identified material weaknesses in our internal control over financial reporting. If our remediation of such material weaknesses is not effective, or if we experience additional material weaknesses in the future or otherwise fail to develop and maintain effective internal control over financial reporting, our ability to produce timely and accurate financial statements or comply with applicable laws and regulations could be impaired.
As a public company, we are subject to various reporting requirements and obligations, including the Sarbanes-Oxley Act. The Sarbanes-Oxley Act requires, among other things, that we maintain effective disclosure controls and procedures, and internal control over financial reporting. In order to maintain and improve the effectiveness of our internal controls and procedures, we have expended, and anticipate that we will continue to expend, significant resources, including accounting-related costs and significant management oversight.
As a public company, we are required to maintain internal control over financial reporting and to evaluate and determine the effectiveness of our internal control over financial reporting. Beginning with our second Annual Report, we will be required to provide a management report on internal control over financial reporting and our auditors may be required to formally attest to the effectiveness of our internal control over financial reporting once we are no longer an “emerging growth company.” As previously disclosed, in connection with the audit of our consolidated financial statements as of and for the years ended December 31, 2023 and 2024, we and our independent registered public accounting firm identified certain material weaknesses. A material weakness is a deficiency, or a combination of deficiencies, in internal control over financial reporting such that there is a reasonable possibility that a material misstatement of our annual or interim financial statements will not be prevented or detected on a timely basis. The material weaknesses identified relate to (i) information technology general controls, including in the areas of restriction of privileged access, user provisioning and de-provisioning, periodic user access reviews, authentication settings, and change management, and (ii) design and maintenance of detective controls over period end financial reporting, including review controls over journal entries, reconciliations and account analyses, and evaluation of technical accounting matters. We have concluded that these material arose because, as a private company, we did not have the necessary business processes, systems, personnel, and related internal controls necessary to the accounting and financial reporting requirements of a public company.
We have taken and will continue to take action to improve our internal control over financial reporting and remediate these material weaknesses, including:
• increased communication among our personnel and third-party professionals with whom we consult regarding complex accounting application;
• performed a risk assessment over the organization and information technology systems used as part of financial reporting, and identifying control activities to be implemented in response to the identified risks, which will
include improving information technology general controls, period end financial reporting controls including journal entries, reconciliations, account analysis, and evaluation of technical accounting matters;
• engaged a third-party provider to help us assess and improve our internal control over financial reporting in preparation for compliance with Section 404;
• hired additional qualified accounting and financial reporting personnel and engaged external accounting experts to support improving our accounting processes and procedures; and
• designed, implemented and began testing of internal controls to address the material weaknesses and improve our internal controls environment.
While management is making improvements to our control environment and business processes to support and scale with our growing operations, the identified material weaknesses remain un-remediated. We may not be able to fully remediate these material weaknesses until these steps have been completed and the internal controls have been operating effectively for a sufficient period of time. This evaluation process, including testing the effectiveness of the remediation efforts was designed and implemented during the year ended December 31, 2025, and will continue during 2026. Additionally, as stated above, we have not performed an evaluation of our internal control over financial reporting; accordingly, we cannot ensure that we have identified all, or that we will not in the future have additional, material weaknesses. Material weaknesses may still exist when we report on the effectiveness of our internal control over financial reporting as required under Section 404 of the Sarbanes-Oxley Act, beginning with our second Annual Report.
If during the evaluation and testing process we identify additional material weaknesses in our internal control over financial reporting or determine that existing material weaknesses have not been remediated, our management will be unable to assert that our internal control over financial reporting is effective. Even if our management concludes that our internal control over financial reporting is effective, our independent registered public accounting firm may conclude that there are material weaknesses with respect to our internal control over financial reporting. If we are unable to assert that our internal control over financial reporting is effective, or when required in the future, if our independent registered public accounting firm is unable to express an unqualified opinion as to the effectiveness of our internal control over financial reporting, investors may lose confidence in the accuracy and completeness of our financial reports, the market price of our Class A common stock could be affected and we could become subject to or by the NYSE, the SEC, or other regulatory authorities, which could require additional financial and management resources.
We 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.
We may require additional cash resources due to changed business conditions or other future developments to support the growth of our business, including any investments, new or enhanced service offerings, or acquisitions or business combinations that we pursue. We maintain a $20.0 million revolving line of credit (the Credit Agreement) with a financial institution, which is collateralized by substantially all the assets of Andersen Tax Holdings LLC and contains certain financial and liquidity covenants. Andersen Tax Holdings LLC had no uncured events of default with respect to the financial covenants, and had no cash borrowings under the Credit Facility, during the year ended December 31, 2025. If our resources are insufficient to satisfy our cash requirements, we may seek to sell additional equity or debt securities or obtain another credit facility, and we cannot be certain that such additional financing would be available on terms acceptable to us or at all. The sale of additional equity securities could result in dilution to our stockholders, and additional indebtedness would result in increased debt service costs and obligations and could impose operating and financial covenants that would further restrict our operations.
Changes 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.
Our financial statements have been prepared in accordance with GAAP. It is possible that changes in accounting standards could have a material adverse effect on our results of operations and financial position. The application of generally accepted accounting principles requires us to make estimates and assumptions about certain items and future events that affect our reported financial condition and results of operations, and our accompanying disclosure with respect to, among other things, revenue recognition and income taxes. We base our estimates on historical experience, current commitments and various other assumptions that we believe to be reasonable under the circumstances and at the time they are made. These estimates and assumptions involve the use of judgment and are subject to significant uncertainties, some of which are beyond our control. If our estimates, or the assumptions underlying such estimates, are not correct, actual results may differ materially from our estimates, and we may need to, among other things, adjust revenue or accrue additional costs that could adversely affect our results of operations.
Our 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.
As of December 31, 2025, the net carrying value of our goodwill and other intangible assets totaled $30.1 million and $2.5 million, respectively. We assess these assets, including client lists, as required under GAAP to determine if there is any indication of impairment. Goodwill is required to be tested for impairment at least annually. Significant negative industry or economic trends, disruptions to our business, adverse changes resulting from new governmental policies or regulations, divestitures and sustained market capitalization declines may result in recognition of impairments. Additionally, a significant portion of the purchase price of any businesses we acquire in the future may be allocated to acquired goodwill and other intangible assets. Any impairment of goodwill or intangible assets would result in a non-cash charge against current earnings, which could lead to a material impact on our results of operations and statements of financial position.
Fluctuations in foreign currency exchange rates could adversely affect our results.
If we are successful in expanding our business and operations internationally, our international sales may be denominated in foreign currencies, and this revenue could be materially affected by currency fluctuations. A substantial majority of our revenue to date has been denominated in U.S. dollars and, therefore, we have not historically been subject to foreign currency risk. In addition, as we continue to expand internationally, we expect to incur increased expenses for employee compensation and other operating expenses at non-U.S. locations in the local currency. Fluctuations in the exchange rates between the U.S. dollar and other currencies could result in the dollar equivalent of such expenses being higher. The volatility of exchange rates depends on many factors that we cannot forecast with reliable accuracy. Moreover, significant and unforeseen changes in foreign currency exchange rates may cause us to fail to achieve any financial projections we make in the future, which could have an adverse effect on the market price of our Class A common stock. Although we may in the future decide to undertake foreign exchange hedging transactions to cover a portion of our foreign currency exchange exposure, we currently do not hedge our exposure to foreign currency exchange risks. We cannot that any hedging techniques we may implement in the future will be or that our business, financial condition, and results of operations will not be materially affected by fluctuations in foreign currency exchange rates.
Risks Related to Being a Public Company
We 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.
We are an “emerging growth company,” as defined in the JOBS Act. For as long as we continue to be an emerging growth company, we are eligible for certain exemptions from various public company reporting requirements. These exemptions include, but are not limited to, (i) not being required to comply with the auditor attestation requirements of Section 404 of Sarbanes-Oxley, (ii) reduced disclosure obligations regarding executive compensation in our periodic reports, proxy statements and registration statements, and (iii) exemptions from the requirements of holding a nonbinding advisory vote on executive compensation and shareholder approval of any golden parachute payments not previously approved. We could be an emerging growth company for up to five years after our IPO. However, if certain events occur prior to the end of such five-year period, including if we become a “large accelerated filer,” our annual gross revenue exceed $1.235 billion, or we issue more than $1.0 billion of non-convertible debt securities in any three-year period, we would cease to be an emerging growth company prior to the end of such five-year period. We have made certain elections with regard to the reduced disclosure obligations regarding executive compensation in our filings and may elect to take advantage of other reduced disclosure obligations in future filings. As a result, the information that we provide to holders of our Class A common stock may be different than you might receive from other public reporting companies in which you hold equity interests. We cannot predict if investors will find our Class A common stock less as a result of our reliance on these exemptions. If some investors find our Class A common stock less as a result of any choice we make to reduce disclosure, there may be a less active trading market for our Class A common stock and the market price for our Class A common stock may be more .
In addition, Section 107 of the JOBS Act provides that an emerging growth company can use the extended transition period provided in Section 7(a)(2)(B) of the Securities Act to delay adoption of new or revised accounting standards until such time as those standards apply to private companies. We have elected to “opt-in” to this extended transition period for complying with new or revised accounting standards and, therefore, we will not be subject to the same new or revised accounting standards as other public companies that comply with such new or revised accounting standards on a non-delayed basis. As a result of this election, our financial statements may not be comparable to companies that comply with public company effective dates.
We 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.
As a public company, and particularly after we are no longer an “emerging growth company,” we will incur significant legal, accounting, and other expenses that we did not incur as a private company, including costs resulting from public company reporting obligations under the Securities Act, the Exchange Act, or the regulations regarding corporate governance practices. The Sarbanes-Oxley Act, the Dodd-Frank Wall Street Reform and Consumer Protection Act, the rules of the SEC, stock exchange listing requirements, and other applicable securities rules and regulations impose various requirements on public companies, including establishment and maintenance of effective disclosure and financial controls and corporate governance practices. Our management and other personnel will devote a substantial amount of time to compliance with these requirements. Moreover, these rules and regulations will increase our legal and financial compliance costs and will make some activities more time-consuming and costly. We cannot predict or estimate the amount of additional costs we will incur as a public company or the specific timing of such costs.
Most of our management and other key personnel have little experience managing a public company and preparing public filings. In addition, we expect that our management and other key personnel will need to divert attention from other business matters to devote substantial time to the reporting and other requirements of being a public company. In particular, we expect to incur significant expense and devote substantial management effort to complying with the requirements of Section 404 of the Sarbanes-Oxley Act. We have hired, and expect to continue to hire, additional accounting and financial staff with appropriate public company experience and technical accounting knowledge.
As a result of disclosure of information in filings required of a public company, our business and financial condition has become more visible than it was when we operated as a private company, which may result in threatened or actual litigation, including by stockholders and competitors. If such claims are successful, our business and operating results could be adversely affected, and even if the claims do not result in litigation or are resolved in our favor, these claims, and the time and resources necessary to resolve them, could divert the resources of our management and adversely affect our business and operating results.
As a public company, we are obligated to develop and maintain proper and effective internal controls over financial reporting, and if we fail to develop and maintain an effective system of internal controls over financial reporting, our ability to produce timely and accurate financial statements or to comply with applicable laws and regulations could be impaired.
Pursuant to Sarbanes-Oxley Act Section 404, we will be required to furnish a report by our management on our internal control over financial reporting beginning with our second filing of an Annual Report on Form 10-K with the SEC after we become a public company. However, while we remain an emerging growth company, we will not be required to include an attestation report on internal control over financial reporting issued by our independent registered public accounting firm. To achieve compliance with Sarbanes-Oxley Act Section 404 within the prescribed period, we will be engaged in a process to document and evaluate our internal control over financial reporting, which is both costly and challenging. There is a risk that we will not be able to conclude, within the prescribed timeframe or at all, that our internal control over financial reporting is effective as required by Sarbanes-Oxley Act Section 404.
In addition to the material weaknesses in internal control over financial reporting identified in connection with the preparation of our financial statements as of and for the years ended December 31, 2023 and 2024, subsequent testing by us or our independent registered public accounting firm may reveal additional deficiencies in our internal control over financial reporting that are deemed to be material weaknesses. During the evaluation and testing process of our internal controls, if we identify additional material weaknesses in our internal control over financial reporting, we will be unable to certify that our internal control over financial reporting is effective. We cannot assure you that there will not be additional material weaknesses or significant deficiencies in our internal control over financial reporting in the future. Any failure to maintain internal control over financial reporting could severely inhibit our ability to accurately report our financial condition or results of operations. to remedy any material in our internal control over financial reporting, or to implement or maintain other control systems required of public companies, could also restrict our future access to the capital markets.
Risks Related to Our Organizational Structure
If we were deemed an “investment company” under the Investment Company Act of 1940 (the 1940 Act) as a result of our ownership of AT Umbrella LLC and its consolidated subsidiaries, applicable restrictions could make it impractical for us to continue our business as contemplated and could have a material adverse effect on our business.
Under the Investment Company Act of 1940, as amended (the Investment Company Act), absent an applicable exemption, a company generally will be deemed to be an “investment company” if (a) it is in the business of investing, reinvesting, owning, holding, or trading in securities and (b) it owns or proposes to acquire “investment securities” having a value exceeding 40% of its total assets (other than U.S. government securities and cash items) on an unconsolidated basis. We do not believe that we or any of our subsidiaries are an “investment company” for purposes of the Investment Company Act, including in part, because neither we nor any of our subsidiaries are in the business of investing, reinvesting, owning, holding, or trading in securities. However, if we were deemed to be an “investment company” as a result of our ownership of AT Umbrella LLC and its consolidated subsidiaries, we would have to comply with a variety of substantive requirements under the Investment Company Act that impose, among other things, limitations on capital structure, restrictions on specified investments, prohibitions on transactions with affiliates, and compliance with reporting, record keeping, voting, proxy disclosure and other rules and regulations that would increase our operating and compliance costs, could make it impractical for us to continue our business as contemplated, and could have a material adverse effect on our business.
Our 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.
Andersen Group Inc. is a holding company, and its sole material asset is its indirect ownership interests in Andersen Tax Holdings LLC through its ownership of approximately 11.4% of the Class X Umbrella Units in AT Umbrella LLC as of December 31, 2025, which in turn owns all ownership interests in Andersen Tax LLC. As such, we have no independent means of generating revenue or cash flow, and our ability to pay our taxes, satisfy our obligations under the Tax Receivable Agreement, pay operating expenses or declare and pay dividends, if any, in the future depends on the financial results and cash flows of AT Umbrella LLC and its subsidiaries. There can be no assurance that AT Umbrella LLC and its subsidiaries will generate sufficient cash flow to distribute funds to us or that applicable state law and contractual restrictions, including negative covenants in debt instruments of AT Umbrella LLC and its subsidiaries, will permit such distributions.
AT Umbrella LLC is treated as a partnership for U.S. federal income tax purposes and, as such, is not subject to any entity-level U.S. federal income tax. Instead, for U.S. federal income tax purposes, taxable income of AT Umbrella LLC is allocated to holders of economic interests in AT Umbrella LLC (including holders of Class X Umbrella Units, LTIP Units, the CA Notes and the HO Note). Accordingly, we will incur income taxes on the distributive share of any net taxable income of AT Umbrella LLC. Under the terms of the AT Umbrella Limited Liability Company Agreement, AT Umbrella LLC is obligated to make tax distributions to holders of economic interests in AT Umbrella (including holders of Class X Umbrella Units, LTIP Units, the CA Notes and the HO Note). In addition to tax expenses, we will incur expenses related to our operations, including obligations to make payments under the Tax Receivable Agreement. Due to the uncertainty of various factors, we cannot reasonably quantify the likely tax benefits we may realize as a result of the purchases of Class X Umbrella Units from the other Class X Umbrella Unit holders or as a result of Class X Umbrella Unit exchanges in the future or other tax benefits related to our entering into or making payments under the Tax Receivable Agreement, and therefore we cannot reasonably quantify the resulting amounts we are likely to pay out to other holders of Class X Umbrella Units pursuant to the Tax Receivable Agreement; however, we estimate that such payments will be substantial.
We expect that AT Umbrella LLC will make distributions to holders of economic interests in AT Umbrella (including holders of Class X Umbrella Units, LTIP Units, the CA Notes and the HO Note), in respect of the U.S. federal, state and local income tax liability attributable to each holder’s allocable share of taxable income of AT Umbrella LLC, calculated using an assumed tax rate equal to the highest marginal tax rate for an individual or corporation resident in the state of the United States that has the highest individual income or corporate income tax rates. Tax distributions will be made quarterly, on an estimated basis. Tax distributions made in respect of Class X Umbrella Units (but not LTIP Units) generally will be made pro rata in respect of such Units, as described in the AT Umbrella Limited Liability Company Agreement. Tax distributions made to a member of AT Umbrella LLC generally will be treated as an advance of and shall be credited against future distributions to such member, and no adjustments will be made to the exchange ratio of Class X Umbrella Units for shares of our Class A common stock upon the exercise of the redemption rights described above to account for prior tax distributions (and tax distributions paid prior to such an exercise of redemption rights will not reduce distributions otherwise payable to us in respect of Class X Umbrella Units acquired in connection with the exercise of such redemption rights).
However, AT Umbrella LLC’s ability to make such distributions may be subject to various limitations and restrictions, such as restrictions on distributions that would violate either any contract or agreement to which AT Umbrella LLC or any of its subsidiaries is then a party, including debt agreements, or any applicable law, or that would have the effect of rendering AT Umbrella LLC or its subsidiaries insolvent. If we do not have sufficient funds to pay our taxes or other liabilities or to fund our operations, we may have to borrow funds, which could materially adversely affect our liquidity
and financial condition and subject us to various restrictions imposed by any such lenders. To the extent that we are unable to make payments under the Tax Receivable Agreement, such payments generally will be deferred and will accrue interest until paid. Nonpayment for a specified period, however, may constitute a breach of a material obligation under the Tax Receivable Agreement and therefore accelerate payments due under the Tax Receivable Agreement, unless, generally, such nonpayment is due to a lack of sufficient funds or is prevented by any debt agreement to which AT Umbrella LLC or its subsidiaries is a party. See “-Risks Related to Our Class A Common Stock,” and Part II, Item 5 “Dividend Policy.”
The Tax Receivable Agreement with the TRA Parties requires us to make cash payments to them in respect of certain tax benefits to which we may become entitled, and the CA Notes and HO Note require AT Umbrella LLC to make cash payments to Aggregator. We expect that the payments we and AT Umbrella LLC will be required to make under these arrangements will be substantial.
In connection with our IPO, we entered into the Tax Receivable Agreement with Aggregator, which requires us to pay to certain holders of Class X Umbrella Units who are or may become parties to the Tax Receivable Agreement from time to time 85% of the tax benefits, if any, that we actually realize, or, in some circumstances, are deemed to realize, as a result of (i) any increase in tax basis in the assets of AT Umbrella LLC and its flow-through subsidiaries resulting from purchases of Class X Umbrella Units from such Class X Umbrella Unit holders with the proceeds of our IPO or resulting from exchanges of Class X Umbrella Units for shares of our Class A common stock or cash in the future; and (ii) certain other tax benefits related to our entering into the Tax Receivable Agreement, including tax benefits attributable to payments that we make under the Tax Receivable Agreement. Due to the uncertainty of various factors, we cannot reasonably quantify the likely tax benefits we may realize as a result of the purchases of Class X Umbrella Units from such Class X Umbrella Unit holders or as a result of Class X Umbrella Units exchanges in the future or other tax benefits related to our entering into or making payments under the Tax Receivable Agreement, and therefore we cannot reasonably quantify the resulting amounts that we are likely to pay out pursuant to the Tax Receivable Agreement; however, we estimate that such payments will be substantial. Assuming that all units eligible to be redeemed for cash or Class A common stock would be exchanged for Class A common stock by Andersen Group Inc. and that we will have sufficient taxable income to utilize all of the tax attributes covered by the Tax Receivable Agreement when they are first available to be utilized under applicable law, we estimate that payments under the Tax Receivable Agreement would aggregate to approximately $694.9 million over the next 15 years and for yearly payments over that time to range between approximately $39.4 million to $70.2 million per year, based on the price of our Class A common stock of $25.93 per share on December 31, 2025.
Payments under the Tax Receivable Agreement will be based on the tax reporting positions that we determine. Any payments made by us under the Tax Receivable Agreement generally will reduce the amount of overall cash flow that otherwise might have been available to us (including for reinvestment). To the extent that we are unable to make payments under the Tax Receivable Agreement, such payments generally will be deferred and will accrue interest until paid. Nonpayment for a specified period, however, may constitute a breach of a material obligation under the Tax Receivable Agreement and therefore accelerate payments due under the Tax Receivable Agreement, unless, generally, such nonpayment is due to a lack of sufficient funds or is prevented by any debt agreement to which AT Umbrella LLC or any of its subsidiaries is a party. The payments under the Tax Receivable Agreement also are not conditioned upon the beneficiaries thereof maintaining a continued ownership interest in AT Umbrella LLC or us.
The actual amount and timing of any payments under the Tax Receivable Agreement will vary depending upon a number of factors, including the timing of exchanges by AT Umbrella LLC, the amount of gain recognized by the other Class X Umbrella Unit holders upon exchanges or purchases of Class X Umbrella Units, the amount and timing of the taxable income we generate in the future and the federal tax rates then applicable.
In connection with our IPO, AT Umbrella LLC issued two types of promissory notes to Aggregator representing (1) the HO Note and (2) the CA Notes. The HO Note, which has a principal amount of $162.3 million, accrues interest at 7.63% payable over eight years. The CA Notes, which have an aggregate principal amount of $187.8 million, accrue interest between 6.31% to 7.50% payable over two to seven years. To the extent that AT Umbrella LLC is unable to make payments under the CA Notes and HO Note, such payments generally will be deferred and will accrue interest until paid. Any payments made by AT Umbrella LLC under the CA Notes and HO Note generally will reduce the amount of overall cash that otherwise might have been available for our use (including for reinvestment).
In certain cases, payments under the Tax Receivable Agreement may be accelerated and significantly exceed the actual benefits, if any, we realize in respect of the tax attributes subject to the Tax Receivable Agreement and may impair our ability to consummate change of control transactions or negatively impact the value received by holders of our Class A common stock.
The Tax Receivable Agreement provides that if (i) certain mergers, asset sales, other forms of business combination or other changes of control were to occur, (ii) we breach any of our material obligations under the Tax Receivable Agreement
or (iii) at any time, we elect an early termination of the Tax Receivable Agreement, then the Tax Receivable Agreement will terminate and our obligations, or our successor’s obligations, to make payments under the Tax Receivable Agreement will accelerate and become immediately due and payable. The amount due and payable in that circumstance is based on certain assumptions, including an assumption that we will have sufficient taxable income to fully utilize all potential future tax benefits that are subject to the Tax Receivable Agreement. We may need to incur debt to finance payments under the Tax Receivable Agreement to the extent our cash resources are insufficient to meet our obligations under the Tax Receivable Agreement as a result of timing discrepancies or otherwise.
As a result of a change in control, material breach or our election to terminate the Tax Receivable Agreement early, (i) we could be required to make cash payments to the TRA Parties that are greater than the specified percentage of the actual benefits we ultimately realize in respect of the tax benefits that are subject to the Tax Receivable Agreement and (ii) we would be required to make an immediate cash payment equal to the anticipated future tax benefits that are the subject of the Tax Receivable Agreement discounted in accordance with the Tax Receivable Agreement which payment may be made significantly in advance of the actual realization, if any, of such future tax benefits. In these situations, our obligations under the Tax Receivable Agreement could have a substantial negative impact on our liquidity and could have the effect of delaying, deferring or preventing certain mergers, asset sales, other forms of business combination, or other changes of control, or reducing the consideration in connection with any such change of control transaction than the consideration that would have been paid in the absence of such obligations. There can be no assurance that we will be to finance our obligations under the Tax Receivable Agreement.
Our 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.
Our organizational structure, including the Tax Receivable Agreement, confers certain benefits upon the other Class X Umbrella Units 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. We entered into a Tax Receivable Agreement with Aggregator, which requires us to pay to certain holders of Class X Umbrella Units who are or may become parties to the Tax Receivable Agreement from time to time 85% of the amount of tax benefits, if any, that we actually realize, or in some circumstances are deemed to realize, as a result of (i) any increase in tax basis in the assets of AT Umbrella LLC and its flow-through subsidiaries resulting from purchases of Class X Umbrella Units from such Class X Umbrella Unit holders with the proceeds of our IPO or resulting from exchanges of Class X Umbrella Units for shares of our Class A common stock or cash in the future; and (ii) certain other tax benefits related to our entering into the Tax Receivable Agreement, including tax benefits attributable to payments that we make under the Tax Receivable Agreement. Due to the uncertainty of various factors, we cannot reasonably quantify the likely tax benefits we may realize as a result of the purchases of Class X Umbrella Units from the other Class X Umbrella Unit holders or as a result of the Class X Umbrella Units exchanges in the future or other tax benefits related to our entering into or making payments under the Tax Receivable Agreement and therefore we cannot reasonably quantify resulting amounts that we are likely to pay out pursuant to the Tax Receivable Agreement; however, we estimate that such payments will be substantial. Although we will retain 15% of the amount of such tax benefits, this and other aspects of our organizational structure may impact the trading market for the Class A common stock. In addition, our organizational structure, including the Tax Receivable Agreement, imposes additional compliance costs and requires a substantial amount of resources that would not be required of a company with a simpler organizational structure.
We 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.
Our ability to realize the tax benefits that we currently expect as a result of the tax attributes covered by the Tax Receivable Agreement, the payments made pursuant to the Tax Receivable Agreement, and the interest deductions imputed under the Tax Receivable Agreement all depend on a number of assumptions, including that we will earn sufficient taxable income each year during the period over which such deductions are available and that there are no adverse changes in applicable law or regulations. If our actual taxable income were insufficient or there were adverse changes in applicable law or regulations, we may be unable to realize all or a portion of the expected tax benefits and our cash flows and shareholders’ equity could be negatively affected.
The U.S. Internal Revenue Service (the IRS) might challenge the tax benefits we receive in connection with our IPO and related transactions or in connection with future acquisitions of Class X Umbrella Units. As a result, it is possible that we could make cash payments under the Tax Receivable Agreement that are substantially greater than our actual cash tax savings.
Payments under the Tax Receivable Agreement will be based on the tax reporting positions that we determine at the time of the payments. Although we are not aware of any issue that would cause the IRS to challenge a tax basis increase, we will not be reimbursed for any cash payments previously made under the Tax Receivable Agreement if any tax benefits initially claimed by us are subsequently disallowed, in whole or in part, by the IRS or other applicable taxing authority. For example, if the IRS later asserts that we did not obtain a tax basis increase, among other potential challenges, then we would not be reimbursed for any cash payments previously made under the Tax Receivable Agreement with respect to such tax benefits that we had initially claimed. Instead, any excess cash payments made by us to a party to the Tax Receivable Agreement will be netted against future cash payments, if any, that we otherwise would be required to make to such party under the terms of the Tax Receivable Agreement. Any tax benefits initially claimed by us may not be disallowed for a number of years following the initial time of such payment or, even if challenged earlier, such excess cash payment may be than the amount of future cash payments that we otherwise might be required to make under the terms of the Tax Receivable Agreement. Accordingly, there may not be sufficient future cash payments which to net. The applicable U.S. federal income tax rules are complex and their application to certain aspects of our structure are uncertain and there is no explicit authority in this regard. Therefore, there can be no assurance that the IRS or a court will not with our tax reporting positions. As a result, it is possible that we could make cash payments under the Tax Receivable Agreement that are substantially than our actual cash tax savings.
AT Umbrella LLC may make distributions of cash to us in excess of the amounts we use to make distributions to our stockholders and pay our expenses (including our taxes and payments under the Tax Receivable Agreement). To the extent we do not distribute such excess cash as dividends on our Class A common stock, the other Class X Umbrella Unit holders would benefit from any value attributable to such cash as a result of their ownership of Class A common stock upon a redemption or exchange of their Class X Umbrella Units.
We are entitled to receive a portion of any distributions made by AT Umbrella LLC to us, Aggregator and the LTIP Unit holders. Any cash received by us from such distributions will first be used by us to satisfy any tax liability and then to make any payments required under the Tax Receivable Agreement. Subject to limitations imposed by applicable law and contractual restrictions (including pursuant to our debt instruments and any future debt instruments) and our having available cash, the AT Umbrella Limited Liability Company Agreement requires AT Umbrella LLC to make certain distributions to holders of economic interests in AT Umbrella LLC to facilitate the payment of taxes with respect to the income of AT Umbrella LLC that is allocated to them. These distributions are based on an assumed tax rate, and to the extent the distributions we receive exceed the amounts actually required by us to pay taxes, Tax Receivable Agreement payments, and other expenses, we will not be required to distribute such excess cash to our stockholders. Our board of directors may, in its sole discretion, choose to use such excess cash for any purpose, including (i) to make distributions to the holders of our Class A common stock, (ii) to acquire additional newly issued Class X Umbrella Units, and/or (iii) to repurchase outstanding shares of our Class A common stock. Unless and until our board of directors chooses, in its sole discretion, to declare a distribution, we will have no obligation to distribute such cash (or other available cash other than any declared dividend) to our stockholders.
No adjustments to the redemption or exchange ratio of Class X Umbrella Units for shares of our Class A common stock will be made as a result of either (i) any cash distribution by us or (ii) any cash that we retain and do not distribute to our stockholders. To the extent we do not distribute such cash as dividends on our Class A common stock and instead, for example, hold such cash balances, buy additional Class X Umbrella Units or lend them to AT Umbrella LLC, this may result in shares of our Class A common stock increasing in value relative to the Class X Umbrella Units. The other holders of Class X Umbrella Units (including LTIP Unit holders who can convert into Class X Umbrella Unit holders) may benefit from any value attributable to such cash balances if they acquire shares of Class A common stock in redemption of or exchange for their Class X Umbrella Units or if we acquire additional Class X Umbrella Units (whether from AT Umbrella LLC or from other holders of Class X Umbrella Units) at a price based on the market price of our Class A common stock at the time, notwithstanding that such holders may have participated previously as holders of Class X Umbrella Units in distributions that resulted in such cash balances to us.
If we retain such excess cash, we may implement measures to mitigate any disproportionate benefits to the other holders of Class X Umbrella Units (including LTIP Unit holders who can convert into Class X Umbrella Unit holders) and to maintain the equal value of Class X Umbrella Units relative to the shares of Class A common stock into which they are exchangeable. Such measures may require consent from Aggregator, amendment to the Limited Liability Company Agreement of AT Umbrella LLC or our amended and restated certificate of incorporation or approvals required under our governing documents, third-party agreements, including our debt agreements, or applicable law. No assurance can be given that we will be able to obtain the required consents or approvals or that we will be able to maintain the equal value of Class X Umbrella Units and corresponding shares of Class A common stock at all times. To the extent we are unable to fully eliminate any value disparity, members of Aggregator who hold Class X Aggregator Units which are redeemable in a one-to-one ratio with Class X Umbrella Units held by Aggregator may disproportionately benefit if they acquire shares of Class A common stock in redemption or exchange of such Class X Umbrella Units.
The members of AT Umbrella LLC, including us, may have conflicting interests.
Holders of Class X Umbrella Units have the right to consent to certain amendments to the AT Umbrella Limited Liability Company Agreement, as well as to certain other matters. Holders of these voting rights may exercise them in a manner that conflicts with the interests of our shareholders. Circumstances may arise in the future when the interests of the other Class X Umbrella Unit holders conflict with the interests of our shareholders. Since we are the managing member of AT Umbrella LLC, we have certain obligations to the other members of AT Umbrella LLC that may conflict with fiduciary duties our officers and directors owe to our shareholders. These conflicts may result in decisions that are not in the best interests of our shareholders.
If AT Umbrella LLC were to become a publicly traded partnership for U.S. federal income tax purposes, we and AT Umbrella LLC might be subject to potentially significant tax inefficiencies, and we would not be able to recover payments previously made under the Tax Receivable Agreement even if the corresponding tax benefits were subsequently determined to have been unavailable due to such publicly traded partnership status. Even as a partnership for U.S. federal income tax purposes, AT Umbrella LLC could become liable for amounts resulting from adjustments to its tax returns for prior years.
We intend to continue to operate such that AT Umbrella LLC does not become a publicly traded partnership taxable as a corporation for U.S. federal income tax purposes. A “publicly traded partnership” is a partnership the interests of which are traded on an established securities market or are readily tradable on a secondary market or the substantial equivalent thereof. Under certain circumstances, transfers of units of AT Umbrella LLC could cause AT Umbrella LLC to be treated as a publicly traded partnership. Applicable U.S. Treasury regulations provide for certain safe harbors to avoid treatment as a publicly traded partnership, and we intend to continue to operate such that AT Umbrella LLC qualifies for one or more of such safe harbors or is otherwise subject to similar trading restrictions that prevent its units from being readily tradeable, although it may be unable to do so, or satisfaction of a safe harbor may be subject to varying interpretation. In addition, from time to time the U.S. Congress has considered legislation to change the tax treatment of partnerships and there can be no assurance that any such legislation will not be enacted or if enacted will not be adverse to us.
If AT Umbrella LLC were to become a publicly traded partnership taxable as a corporation for U.S. federal income tax purposes, we might be subject to potentially significant tax inefficiencies, including as a result of our inability to file a consolidated U.S. federal income tax return with AT Umbrella LLC. In addition, we may not be able to realize tax benefits covered under the Tax Receivable Agreement and would not be able to recover any payments previously made by us under the Tax Receivable Agreement, even if the corresponding tax benefits (including any claimed increase in the tax basis of AT Umbrella LLC’s assets) were subsequently determined to have been unavailable. Even if AT Umbrella LLC continues to be treated as a partnership for U.S. federal income tax purposes, certain adjustments to AT Umbrella LLC’s tax return (or any tax returns of any subsidiary of AT Umbrella LLC that is treated as a partnership for U.S. federal income tax purposes) for prior years may result in liabilities for AT Umbrella LLC. Legislation that is effective for taxable years beginning after December 31, 2017, may impute liability for adjustments to a partnership’s tax return on the partnership itself with respect to taxable years of the partnership that are open to adjustment in certain circumstances, absent an election to the . AT Umbrella LLC (or any subsidiary of AT Umbrella LLC that is treated as a partnership for U.S. federal income tax purposes) may be subject to material liabilities pursuant to this legislation and related guidance if, for example, its calculations of taxable income are .
Risks Related to Our Class A Common Stock
The 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.
The trading prices of the securities of many companies have historically been highly volatile, and the financial and other capital markets have been unusually volatile. Accordingly, the market price of our Class A common stock could be subject to wide fluctuations for many reasons, many of which are beyond our control, including those described under this Part I, Item 1A “Risk Factors” and others such as:
• actual variations in our operating results and other financial and operational metrics, including the key business metrics, as well as how those results and metrics compare to analyst and investor expectations;
• speculation about our operating results;
• failure of analysts to initiate or maintain coverage of our company, changes in their estimates of our operating results or changes in recommendations by analysts that follow our Class A common stock;
• the financial projections we may provide to the public, any changes in these projections or our failure to meet these projections;
• announcements of new services, business combinations, strategic initiatives or significant agreements or other developments by us or our competitors;
• announcements by us or our competitors of mergers, acquisitions or business combinations or rumors of such transactions involving us or our competitors;
• rumors and market speculation involving us or other companies in our industry, which may include short seller reports;
• the impact of regulatory changes, tariffs or other trade actions;
• changes in our senior management or other key personnel or departures of large groups of our Managing Directors;
• cybersecurity breaches or other issues;
• the strength of the global economy or the economy in the jurisdictions in which we operate, and market conditions in our industry;
• any coordinated trading activities or large derivative positions in our Class A common stock;
• litigation or other claims against us;
• unfavorable news or other events regarding us which negatively affect our brand or reputation;
• the number of shares of our Class A common stock that are available for public trading; and
• any other factors discussed under this Part I, Item 1A “Risk Factors.”
In addition, if the market for the stock of professional services companies or the stock market in general experiences a loss of investor confidence, the market price of our Class A common stock could decline for reasons unrelated to our business, results, and growth prospects. The market price of our Class A common stock might also decline in reaction to events that affect other companies, even if those events do not directly affect us. Some companies that have experienced volatility in the trading price of their stock have been the subject of securities class action litigation. If we are the subject of such litigation, it could result in substantial costs and could divert our management’s attention and resources, which could adversely affect our business.
The dual-class structure of our common stock has the effect of concentrating voting control with Aggregator, which holds in the aggregate approximately 98.7% of the combined voting power of our outstanding capital stock. This ownership will limit or preclude your ability to influence corporate matters, including the election of directors, amendments of our organizational documents, and any major corporate transaction requiring stockholder approval, including change of control transactions.
Our Class B common stock has ten votes per share, and our Class A common stock has one vote per share. Aggregator holds all outstanding shares of our Class B common stock. Aggregator holds approximately 98.7% of the combined voting power of our outstanding capital stock as of December 31, 2025, and therefore will be able to control all matters submitted to our stockholders for approval.
This concentrated control will limit or preclude your ability to influence corporate matters for the foreseeable future, including the election of directors, amendments of our organizational documents, and any merger, consolidation, sale of all or substantially all of our assets, or other major corporate transaction requiring stockholder approval. In addition, this may prevent or discourage unsolicited acquisition proposals or offers for our capital stock that you may feel are in your best interests as one of our stockholders.
Further, we cannot predict whether our dual-class structure, combined with the concentrated control of Aggregator, will result in a lower or more volatile market price of our Class A common stock or in negative publicity or other adverse consequences.
Sales 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.
As of December 31, 2025, we had 12,650,000 shares of Class A common stock outstanding, excluding 99,166,563 shares of Class A common stock that would be issued if all outstanding Class X Umbrella Units held by Aggregator or LTIP Units were exchanged for a corresponding number of newly issued shares of Class A common stock. The 99,166,563 shares of Class A common stock that would be issued if all outstanding Class X Umbrella Units held by Aggregator or LTIP Units were exchanged for a corresponding number of newly issued shares of Class A common stock, will be deemed “restricted securities,” as that term is defined under Rule 144 of the Securities Act.
In connection with our IPO, our executive officers and directors and substantially all of our securityholders are subject to lock-up restrictions with the underwriters or are subject to market standoff arrangements during the period ending 180 days after December 16, 2025 that prevent them from selling their shares prior to the expiration of this lock-up period, subject to certain exceptions. Morgan Stanley & Co. LLC and UBS Securities LLC may permit our executive officers or directors to sell shares prior to the expiration of the restrictive provisions contained in the “lock-up” agreements with the underwriters. In addition, Mr. Vorsatz, our Chairman and Chief Executive Officer, has entered into an additional lock-up restriction with us that prevents him from selling his shares during a period ending 18 months after December 16, 2025, which restriction may only be waived by our board of directors. Further, the Aggregator Limited Liability Company Agreement contractually restricts the ability of Andersen Managing Directors to sell their shares during the period ending 180 days after December 16, 2025, subject to certain exceptions. We agreed with the IPO underwriters to enforce and not to amend or waive any such transfer restrictions during the period ending 180 days after December 16, 2025 without their consent.
After the lock-up agreements and related transfer restrictions pertaining to our IPO expire, up to an additional 99,163,563 shares of Class A common stock (which are issuable upon exchange of an equal amount of Class X Umbrella Units or LTIP Units and forfeiture of corresponding shares of Class B common stock) will be eligible for sale in the public market as of December 31, 2025, subject to various vesting and transfer restrictions. The market price of our Class A common stock could decline as a result of the sale of a substantial number of our shares in the public market or the perception in the market that the holders of a large number of shares intend to sell their shares.
Additionally, 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.
In the future, we may also issue our securities in connection with investments, acquisitions or business combinations. The number of shares of our Class A common stock (or securities convertible into or exchangeable for our Class A common stock) issued in connection with an investment or acquisition or business combinations could constitute a material portion of our then-outstanding shares of Class A common stock. As restrictions on resale end, the market price of our shares of Class A common stock could drop significantly if the holders of these restricted shares sell them or are perceived by the market as intending to sell them. These factors could also make it more difficult for us to raise additional funds through future offerings of our Class A common stock or other securities or to use our Class A common stock as consideration for acquisitions of other businesses, business combinations, investments or other corporate purposes.
Future 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.
As of December 31, 2025, we had 987,350,000 shares of Class A common stock authorized but unissued, including 99,166,563 shares of Class A common stock issuable upon exchange of Class X Umbrella Units or LTIP Units and forfeiture of corresponding shares of Class B common stock that will be held by Aggregator. We may issue additional Class A common stock, convertible securities, preferred stock or other equity in the future. We will also admit new Managing Directors from time to time, who we currently expect will become indirect owners of Class X Umbrella Units or LTIP Units of AT Umbrella LLC along with paired shares of Class B common stock, each held indirectly through Aggregator. LTIP Units are exchangeable into Class X Umbrella Units when certain conditions are met. We may alternatively admit new Managing Directors to whom we will issue Class A common stock and/or Class B common stock. We also issue Class A common stock to our employees, directors, and other service providers pursuant to our 2025 Equity Incentive Plan. Such issuances could be dilutive to investors and could cause the market price of our Class A common stock to decline. New investors in such issuances could also receive rights senior to those of holders of our Class A common stock. Similarly, the AT Umbrella Limited Liability Company Agreement permits AT Umbrella LLC to issue an unlimited number of additional limited liability company interests of AT Umbrella LLC with designations, preferences, rights, powers and duties that are different from, and may be senior to, those applicable to the Class X Umbrella Units, and which may be exchangeable for shares of our Class A common stock. In the future, we may also issue additional securities if we need to raise capital, including, but not limited to, in connection with acquisitions or business combinations, which could constitute a material portion of our then-outstanding shares of Class A common stock. Any such issuance could substantially dilute the ownership and voting power of our existing stockholders and cause the market price of our Class A common stock to .
We 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.
Aggregator holds approximately 98.7% of the combined voting power of our outstanding capital stock as of December 31, 2025. Aggregator therefore has the ability to determine all matters requiring approval by our stockholders, including the election of our directors, amendment of our governing documents, and approval of major corporate transactions. Because Aggregator controls a majority of the voting power of our outstanding capital stock, we are a “controlled company” within the meaning of the NYSE corporate governance standards. Under these corporate governance standards, a company of which more than 50% of the voting power in the election of directors is held by an individual, group or another company is a “controlled company” and may elect not to comply with certain corporate governance requirements, namely the requirements to have a majority of directors be independent, to have a compensation committee and to have an independent nominating function. A majority of our board of directors are independent and we have an independent compensation committee in addition to an independent audit committee. While our compensation committee is fully independent, certain actions typically taken by a compensation committee under NYSE rules are instead taken by the full board in reliance on the “controlled company” exemption, including that our full board of directors determines and approves our CEO’s compensation, based on recommendations from our compensation committee. In addition, we do not have a nominating committee. The typical functions of this committee are addressed by our full board of directors. For as long as the “controlled company” exemption is available, our board of directors in the future may not consist of a majority of independent directors and may not have an independent nominating committee or compensation committee. As a result, you may not have the same protections afforded to stockholders of companies that are subject to all of the NYSE rules regarding corporate governance. Use of the controlled company exemptions could cause our Class A common stock to be less to certain investors or otherwise cause the market price of our Class A common stock to .
If industry or financial analysts issue inaccurate or unfavorable research regarding our Class A common stock, our stock price and trading volume could decline.
The market for our Class A common stock is influenced by the research and reports that industry or financial analysts publish about us or our business. We do not control these analysts or the content and opinions included in their reports. As a new public company, we may be slow to attract research coverage and the analysts who publish information about our Class A common stock will have had relatively little experience with our company, which could affect their ability to accurately forecast our results and make it more likely that we fail to meet their estimates. If any of the analysts who cover us issues an inaccurate or unfavorable opinion regarding the market price of our Class A common stock, our stock price would likely decline. In addition, the stock prices of many companies have declined significantly after those companies have failed to meet, or significantly exceed, the financial guidance publicly announced by the companies or the expectations of analysts. If our financial results fail to meet, or significantly exceed, our announced guidance or the expectations of analysts or public investors, analysts could our Class A common stock or publish research about us. If one or more of these analysts coverage of our company or to publish reports on us regularly, our visibility in the financial markets could decrease, which in turn could cause our stock price or trading volume to .
Anti-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.
Provisions in our amended and restated certificate of incorporation and amended and restated bylaws may have the effect of delaying or preventing a change in control of our company or limiting changes in our management. Among other things, they provide:
• a dual-class structure which provides holders of our Class B common stock with ten votes per share until the date on which Aggregator and its designees and affiliates cease to beneficially own 50% of the voting power of our common stock entitled to vote generally in the election of directors (the Triggering Event), giving Aggregator the ability to significantly influence the outcome of matters requiring stockholder approval until the date of the Triggering Event;
• authorization of the issuance of “blank check” preferred stock that our board of directors could use to implement a stockholder rights plan;
• from and after the Triggering Event, our board of directors will be divided into three classes with members of each class serving staggered three-year terms;
• from and after the Triggering Event, our stockholders may not call special meetings of the stockholders;
• from and after the Triggering Event, our stockholders will only be able to take action at a meeting of stockholders and not by written consent; and
• advance notice requirements for nominations for election to our board of directors or for proposing matters that can be acted upon by stockholders at annual stockholder meetings.
These provisions may delay or prevent attempts by our stockholders to replace members of our management by making it more difficult for stockholders to replace members of our board of directors, which is responsible for appointing the members of our management. We have opted out of Section 203 of the Delaware General Corporation Law, or the DGCL; however, our amended and restated certificate of incorporation contains similar provisions that shall apply to us after the Triggering Event, providing that we may not engage in certain “business combinations” with any “interested stockholder” for a three-year period following the time that the stockholder became an interested stockholder, subject to certain exceptions. Anti-takeover provisions could depress the market price of our Class A common stock by acting to delay or prevent a change in control of our company.
Our amended and restated certificate of incorporation provides that the Court of Chancery of the State of Delaware and the federal district courts of the United States of America will be the exclusive forums for substantially all disputes between us and our stockholders, which could limit our stockholders’ ability to obtain a favorable judicial forum for disputes with us or our directors, officers, or employees.
Our amended and restated certificate of incorporation provides that the Court of Chancery of the State of Delaware will be the exclusive forum for actions or proceedings brought under Delaware statutory or common law: (i) any derivative claim or cause of action brought on our behalf; (ii) any action asserting a claim of a breach of fiduciary duty; (iii) any action asserting a claim against us arising under the DGCL; (iv) any action arising under or seeking to interpret, apply, enforce, or determine the validity of our amended and restated certificate of incorporation or our amended and restated bylaws (as either may be amended from time to time); (v) any claim or cause of action against us that is governed by the internal affairs doctrine; or (vi) any action asserting an “internal corporate claim” as defined in the DGCL, in all cases to the fullest extent permitted by law and subject to the court’s having personal jurisdiction over the indispensable parties named as defendants.
Our amended and restated certificate of incorporation further provides that the federal district courts of the United States of America will be the exclusive forum for resolving any complaint asserting a cause or causes of action arising under the Securities Act, including all causes of action asserted against any defendant to such complaint. Some companies that adopted a similar federal district court forum selection provision were subject to a suit in the Chancery Court of Delaware by stockholders who asserted that the provision is not enforceable. While the Delaware Supreme Court held that such federal district court forum selection provision was in fact valid, there can be no assurance that federal courts or other state courts will follow the holding of the Delaware Supreme Court or determine that the our federal district court forum selection provision should be enforced in a particular case. These choice of forum provisions do not apply to actions brought to enforce a duty or liability created by the Exchange Act. We intend for the choice of forum provision regarding claims arising under the Securities Act to apply despite the fact that Section 22 of the Securities Act creates concurrent jurisdiction for federal and state courts over all actions brought to enforce any duty or liability created by the Securities Act or the rules and regulations thereunder. There is uncertainty as to whether a court would enforce such provision with respect to under the Securities Act. Our forum provision does not relieve us of our duties to comply with the federal securities laws and the rules and regulations thereunder, and our stockholders will not be deemed to have waived our compliance with these laws, rules and regulations.
For the avoidance of doubt, this provision is intended to benefit and may be enforced by us, our officers and directors, the underwriters to any offering giving rise to such complaint, and any other professional entity whose profession gives authority to a statement made by that person or entity and who has prepared or certified any part of the documents underlying the offering. These exclusive forum provisions may limit the ability of our stockholders to bring a claim in a judicial forum that such stockholders find favorable for disputes with us or our directors, officers or employees, which may discourage such lawsuits against us and our directors, officers, and employees. Alternatively, if a court were to find such provisions contained in our certificate of incorporation to be inapplicable or unenforceable in an action, we may incur additional costs associated with resolving such action in other jurisdictions. These exclusive forum provisions would not apply to suits brought to enforce a duty or liability created by the Exchange Act.
We 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.
We have never declared or paid any cash dividends on our capital stock, and except as described under Part II, Item 5 “Dividend Policy,” we do not currently expect to pay any dividends or other distributions on our Class A common stock in the foreseeable future. The declaration, amount, and payment of any future dividends will be at the sole discretion of our board of directors, and will depend on, among other things, general and economic conditions, our results of operations and financial condition, our available cash and current and anticipated cash needs, capital requirements, contractual, legal, tax and regulatory restrictions and implications on the payment of dividends by us to our stockholders or by our subsidiaries to us, including restrictions under any future credit facility or financing we may obtain, and such other factors as our board of
directors may deem relevant. See the risk factor titled “-AT Umbrella LLC may make distributions of cash to us in excess of the amounts we use to make distributions to our stockholders and pay our expenses (including our taxes and payments under the Tax Receivable Agreement). To the extent we do not distribute such excess cash as dividends on our Class A common stock, the other Class X Umbrella Unit holders would benefit from any value attributable to such cash as a result of their ownership of Class A common stock upon a redemption or exchange of their Class X Umbrella Units” and Part II, Item 5 “Dividend Policy.”
