Q - Porch Group,

Current report

Risks Related to our 2030 Notes

Current report

The conditional conversion feature of the 2030 Notes, if triggered, may adversely affect our financial condition and operating results.

Current report

We completed an offering of the Convertible Senior Unsecured Notes due in 2030 (the “2030 Notes”) in May 2025. In the event the conditional conversion feature of the 2030 Notes is triggered, holders of 2030 Notes will be entitled to convert the 2030 Notes at any time during specified periods at their option. If one or more holders elect to convert their 2030 Notes, unless we elect to satisfy our conversion obligation by delivering solely shares of our common stock (other than paying cash in lieu of delivering any fractional share), we would be required to settle a portion or all of our conversion obligation through the payment of cash, which could adversely affect our liquidity. In addition, even if holders do not elect to convert their 2030 Notes, we could be required under applicable accounting rules to reclassify all or a portion of the outstanding principal of the 2030 Notes as a current rather than long-term liability, which would result in a material reduction of our net working capital.

Current report

Conversion of our 2030 Notes may dilute the ownership interest of our stockholders or may otherwise depress the price of our common stock.

Current report

The conversion of some or all of our 2030 Notes may dilute the ownership interests of our stockholders. Upon conversion of the 2030 Notes, we have the option to pay or deliver, as the case may be, cash, shares of our common stock, or a combination of cash and shares of our common stock. If we elect to settle our conversion obligation in shares of our common stock or a combination of cash and shares of our common stock, any sales in the public market of our common stock issuable upon such conversion could adversely affect prevailing market prices of our common stock. Additionally, the existence of the 2030 Notes may encourage short selling by market participants that engage in hedging or arbitrage activity, and anticipated conversion of the 2030 Notes into shares of our common stock could depress the price of our common stock.

Current report

Certain provisions in the indenture governing the 2030 Notes may delay or prevent an otherwise beneficial takeover attempt of us.

Current report

Certain provisions in the indenture governing the 2030 Notes may make it more difficult or expensive for a third party to acquire us. For example, the indenture governing the 2030 Notes requires us to repurchase the 2030 Notes for cash upon the occurrence of a fundamental change (as defined in the indenture governing the 2030 Notes) of us and, in certain circumstances, to increase the conversion rate for a holder that converts their 2030 Notes in connection with a make-whole fundamental change (as defined in the indenture governing the 2030 Notes). A takeover of us may trigger the requirement that we repurchase the 2030 Notes and/or increase the conversion rate, which could make it more costly for a potential acquirer to engage in such takeover. Such additional costs may have the effect of delaying or preventing a takeover of us that would otherwise be beneficial to investors.

Current report

The accounting method for the 2030 Notes could adversely affect our reported financial condition and results.

Current report

The accounting method for reflecting the 2030 Notes on our balance sheet, accruing interest expense for the 2030 Notes and reflecting the underlying shares of our common stock in our reported diluted earnings per share may adversely affect our reported earnings and financial condition. We expect that the 2030 Notes will be reflected as a liability on our balance sheets, with the initial carrying amount equal to the principal amount of the 2030 Notes, net of issuance costs. The issuance costs attributable to the 2030 Notes will be treated as a debt discount for accounting purposes, which will be amortized into interest expense over the term of the 2030 Notes. As a result of this amortization, the interest expense that we expect to recognize for the 2030 Notes for accounting purposes will be greater than the cash interest payments we will pay on the 2030 Notes, which will result in lower reported income. In addition, we expect that the shares underlying the 2030 Notes will be reflected in our diluted earnings per share using the “if converted” method. However, if reflecting the 2030 Notes in diluted earnings per share is anti-dilutive, then the shares underlying the 2030 Notes will not be reflected in our diluted earnings per share. Accounting standards may change in the future in a manner that may adversely affect our diluted earnings per share. Furthermore, if any of the conditions to the convertibility of the 2030 Notes is satisfied, then we may be required under applicable accounting standards to reclassify the liability carrying value of the 2030 Notes as current, rather than a long-term, liability. This reclassification could be required even if no noteholders convert their 2030 Notes and could materially reduce our reported working capital.