TWFG, Inc.

Cautionary Note Regarding Forward-Looking Statements

We have made statements in this Annual Report on Form 10-K (this “Annual Report”) that are forward-looking statements. In some cases, you can identify these statements by forward-looking words such as “may,” “might,” “will,” “should,” “expects,” “plans,” “anticipates,” “believes,” “estimates,” “predicts,” “potential” or “continue,” the negative of these terms and other comparable terminology. These forward-looking statements, which are subject to risks, uncertainties and assumptions about us, may include projections of our future financial performance, our anticipated growth strategies and anticipated trends in our business. These statements are only predictions based on our current expectations and projections about future events. There are important factors that could cause our actual results, level of activity, performance or achievements to differ materially from the results, level of activity, performance or achievements expressed or implied by the forward-looking statements, including those factors discussed under the captions entitled Part I, Item 1A “Risk factors” and Part II, Item 7 “Management’s Discussion and Analysis of Financial Condition and Results of Operations”.

Although we believe the expectations reflected in the forward-looking statements are reasonable, we cannot guarantee future results, level of activity, performance or achievements. Moreover, neither we nor any other person assumes responsibility for the accuracy and completeness of any of these forward-looking statements. We undertake no obligation to publicly update or revise any forward-looking statement, whether as a result of new information, future developments or otherwise, except as may be required by law.

Commonly Used Defined Terms:

•“we,” “us,” “our,” the “Company,” “TWFG,” and similar references refer to: (i) TWFG, Inc. and, unless otherwise stated or the context otherwise requires, all of its subsidiaries, including TWFG Holding Company, LLC (“TWFG Holding”), for periods following the consummation of the Reorganization Transactions (as defined herein), including our initial public offering (“IPO”), and (ii) TWFG Holding and, unless otherwise stated or the context otherwise requires, all of its subsidiaries, for periods prior to the completion of the Reorganization Transactions, including our IPO;

•Adjusted Diluted Earnings Per Share: Adjusted Net Income divided by diluted shares outstanding after adjusting for the effect of (i) the exchange of 100% of the outstanding Class B common stock of the Company (the “Class B Common Stock”) and Class C common stock of the Company (the “Class C Common Stock”) (together with the related LLC Units) into shares of Class A common stock of the Company (“Class A Common Stock”) and (ii) the vesting of 100% of the unvested equity awards and exchange into shares of Class A Common Stock;

•Adjusted EBITDA: EBITDA adjusted to exclude equity-based compensation and other non-operating items, including certain nonrecurring or non-operating gains or losses;

•Adjusted EBITDA Margin: Adjusted EBITDA divided by total revenues;

•Adjusted Free Cash Flow: Cash flow from operating activities (the most directly comparable GAAP measure) less cash payments for tax distributions, purchases of property, plant, and equipment and acquisition-related costs;

•Adjusted Net Income: Net income (the most directly comparable GAAP measure) before amortization, non-recurring or non-operating income and expenses, including equity-based compensation, adjusted to assume a single class of stock (Class A) and assuming noncontrolling interests do not exist;

•Adjusted Net Income Margin: Adjusted Net Income divided by total revenues;

•Admitted: The insurance market comprising insurance carriers licensed to write business on an “admitted” basis by the insurance commissioner of the state in which the risk is located. Insurance rates and forms in this market are highly regulated by each state and coverages are largely uniform;

•Book of Business: Active Client list;

•Branch: An independent agency that contracts with our Insurance Services offering, operates its agency through TWFG’s “Agency-in-a-Box” and with TWFG’s branding, and receives all benefits of working with TWFG, including a work and revenue share, TWFG back-office support, marketing and access to a fully integrated agency management system. TWFG branding is restricted to the Branches and Corporate Branches, all of which are listed on our website and can be found using the location filter. Branches and Corporate Branches are exclusive to TWFG, meaning that they can only write certain insurance business through TWFG;

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•Client: Individual or entity that purchases an insurance policy or seeks to purchase an insurance policy from TWFG Agencies;

•Corporate Branch: An agency within our Insurance Services offering that is wholly owned by TWFG;

•EBITDA: Earnings before interest, income taxes, depreciation and amortization;

•E&O: Errors and omissions;

•E&S: Excess and surplus lines. In this insurance market, insurance carriers are licensed on a “non-admitted” basis. The excess and surplus lines market often offers insurance carriers more flexibility in terms, conditions and rates than does the admitted market;

•M&A: Mergers and acquisitions;

•MGA: Managing general agency;

•MGA Agencies: Independent agencies that contract with TWFG MGA to obtain access to additional insurance carriers or programs. TWFG MGA Agencies do not include TWFG branding and are not exclusive to TWFG;

•Organic Revenue: Total revenues (the most directly comparable GAAP measure) for the relevant period, excluding contingent income, fee income, other income and those revenues generated from acquired businesses;

•Organic Revenue Growth: Organic Revenue Growth is the change in Organic Revenue period-to-period;

•P&C: Property and casualty insurance;

•Total Written Premium: The total amount of current premium (net of cancellations) placed with insurance carriers;

•TWFG Agencies: Branches, Corporate Branches and MGA Agencies;

•TWFG MGA: TWFG’s managing general agency.

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Summary of risk factors

Our business is subject to a number of risks of which you should be aware before making an investment decision. Some of the more significant challenges and risks relating to an investment in our Class A Common Stock include those associated with the following:

•an overall decline in economic activity;

•changes in prevailing interest rates or U.S. monetary policies that affect interest rates could adversely affect our ability to generate new business;

•volatility, declines in premiums, or other adverse trends in the insurance industry that may undermine profitability;

•decreases in premiums and commissions set by insurance carriers;

•the cyclicality of, and the economic conditions, in the markets in which we operate;

•decreases in contingent commissions;

•risks associated with international operations;

•the occurrence of natural or man-made disasters resulting in declines in business and increases in claims;

•pandemics or other outbreaks of disease impacting the global economy and normal business operations;

•climate risks and risks associated with physical effects of climate change;

•risks related to legal proceedings, governmental inquiries, regulation by state insurance departments, and changes in U.S. and other appliable laws and regulations;

•risks associated with E&O claims;

•significant competitive pressure in the insurance industry;

•consolidation within the retail insurance brokerage industry;

•the termination of our relationships with our primary insurance carriers;

•failure to raise additional capital or generate cash flows harming our ability to compete;

•impairment of intangible assets;

•handling of Client funds and surplus lines taxes and related fiduciary regulation;

•changes in the mode of compensation in the insurance industry;

•risks related to effectively applying technology-based solutions and reliance on third parties for technology services;

•unavailability or inaccuracy of data provided by Clients, third parties and insurance carriers;

•risks related to our outstanding indebtedness, which is secured by substantially all of our assets (including rights to future commissions) and the ability to borrow significantly greater amounts under our Revolving Credit Agreement (as defined below), all of which subject us to restrictions and limitations that could significantly affect our ability to operate, refinance or service our indebtedness;

•changes to our ownership, including the ownership of TWFG Holding or our other subsidiaries could trigger a change of control default under our Credit Agreements (as defined below);

•changes in interest rates or deterioration of credit quality;

•termination of or changes to our MGA programs;

•delays in remittance from insurance carriers and our inability to collect receivables from insurance carriers;

•risks associated with the acquisition or disposition of businesses and the integration of acquired businesses;

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•any failure to maintain, protect and enhance our brand or prevent damage to our reputation;

•increasing scrutiny from investors, Clients and employees with respect to ESG practices;

•risks related to our independent branch business;

•failure to protect our intellectual property rights, or allegations that we have infringed on the intellectual property rights of others;

•we are a “controlled company” under the Nasdaq rules, and as a result, qualify for, and rely on, exemptions from certain corporate governance requirements; and

•we are controlled by Bunch Family Holdings, LLC (“Bunch Holdings”) whose interests in our business may be different than yours. Due to the high vote stock held by Bunch Holdings, we will continue to be controlled by Bunch Holdings even though it may in the future own less than a majority of our common stock outstanding.

Before you invest in our Class A Common Stock, you should carefully consider all the information in this Annual Report, including matters set forth under the heading Item 1A. “Risk factors.”

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