TRUPANION, INC.

Current report

Our substantial indebtedness could adversely affect our financial condition and prevent us from fulfilling our obligations.

Current report

We maintain borrowing arrangements to fund certain of our operations. In November 2025, we repaid the outstanding balance under the Credit Facility with the proceeds from our PNC Facility. The PNC Facility provides us with $120.0 million in credit consisting of a term loan in an aggregate principal amount of $100.0 million and commitments for revolving loans in an aggregate principal amount at any time outstanding not in excess of $20.0 million. We expect to use a substantial portion of our cash flow to pay interest and principal on our outstanding indebtedness, and we may be unable to generate sufficient cash flow from operations, or have future borrowings available, to enable us to repay our indebtedness or to fund other liquidity needs.

Current report

Among other consequences, our level of indebtedness could:

Current report

•require us to use a significant percentage of our cash flow from operations for debt service and the satisfaction of repayment obligations, and not for other purposes that could grow our business;

Current report

•limit our ability to borrow money or issue equity to fund our working capital, capital expenditures, acquisitions and debt service requirements;

Current report

•cause our interest expense to increase if there is a general increase in interest rates, because a portion of our indebtedness bears interest at floating rates;

Current report

•limit our flexibility in planning for or reacting to changes in our business and future business opportunities;

Current report

•cause us to be more highly leveraged than some of our competitors, which may place us at a competitive disadvantage;

Current report

•make us more vulnerable to a downturn in our business or the economy; and

Current report

•limit our ability to exploit business opportunities.

Current report

Volatility in the credit markets, including due to bank failures as well as the U.S. Federal Reserve Bank’s interest rate decisions may impact our interest payments. We have secured overnight financing rate (“SOFR”)-based floating rate borrowings under the PNC Agreement, which expose us to variability in interest payments due to changes in the reference interest rates. SOFR is a relatively new reference rate and has a limited history, and changes in SOFR have, on occasion, been more volatile than changes in other benchmark or market rates. As a result, the amount of interest we may pay on our variable rate indebtedness is difficult to predict.

Current report

Further, the PNC Agreement contains several affirmative and negative covenants that could restrict our operations, require us to pay the outstanding balance under the PNC Facility if we are unable to comply with such covenants, or limit our ability to enter into particular transactions and to engage in other actions that we may believe are advisable or necessary for our business. Although the PNC Agreement restricts our ability to incur additional indebtedness, these restrictions are subject to a number of qualifications and exceptions, and we could incur substantial additional indebtedness in compliance with these restrictions. This could reduce our ability to satisfy our obligations and further exacerbate the risks to our financial condition.