Porch Group, Inc.

Current report

The following risk factors relate to the pending acquisition by Homeowners of America Holding Corporation (“HOA Holdco”) and Porch Insurance Reciprocal Exchange (the “Reciprocal”) of Allied Trust Insurance Company (“ATIC”), Allied Underwriters LLC (“AU MGA”), and Lonestar Lagniappe Reinsurance Holdings, LLC (“Lonestar”) pursuant to the Stock and Membership Interest Purchase Agreement, dated as of October 13, 2026 (the “Purchase Agreement” and such acquisition, the “Acquisition”). These risk factors supplement, and should be read together with, the risk factors set forth in Part I, Item 1A of our Annual Report on Form 10-K for the year ended December 31, 2025.

Current report

The Acquisition is subject to closing conditions, including required insurance regulatory approvals, and may not be completed on the anticipated timeline or at all.

Current report

Completion of the Acquisition is subject to conditions, including the receipt of required approvals from the Texas Department of Insurance and other applicable insurance regulators, the absence of any legal restraint, and the accuracy of representations and the performance of covenants by the parties. Insurance holding company laws require prior regulatory approval of any acquisition of control of a domestic insurer. The review process may take longer than we expect, and regulators may impose conditions in connection with their approval, including requirements relating to capital maintenance, restrictions on dividends or intercompany transactions, or limitations on the conduct of business, any of which could reduce the anticipated benefits of the Acquisition or, if sufficiently adverse, permit HOA Holdco and the Reciprocal not to close.

Current report

If the Acquisition has not been completed by April 1, 2027, as such date may be extended, either party may terminate the Purchase Agreement, and the Purchase Agreement may also be terminated by mutual consent, following an uncured breach, or upon a final and non-appealable legal restraint. We will incur significant transaction costs whether or not the Acquisition is completed, and the pendency of the Acquisition may divert management’s attention and, through pre-closing operating covenants, limit the acquired businesses’ ability to respond to competitive or market developments. A failure to complete the Acquisition could adversely affect the trading price of our common stock and our ability to pursue other opportunities.

Current report

We may not realize the anticipated benefits of the Acquisition, including because of difficulties integrating the acquired businesses or operating in new markets.

Current report

Realizing the anticipated benefits of the Acquisition depends on our ability to integrate the underwriting, claims, policy administration, actuarial and reserving, reinsurance, distribution, and financial reporting functions of ATIC, AU MGA, and Lonestar with our existing insurance operations, including the Reciprocal and HOA, while complying with the regulatory requirements applicable to multiple insurance entities within a holding company system. Integration may take longer, cost more, or prove more complex than we expect, and may result in the loss of key employees, agents, or policyholders of the acquired businesses and the diversion of management’s attention from our existing operations.

Current report

The acquired businesses underwrite and write insurance policies in states in which we do not currently operate, including Louisiana, which will require us to maintain licenses, build distribution, and price risks in markets where we have limited operating experience and where regulatory, catastrophe, and litigation environments differ from those in which we operate today. Our proprietary property data may prove less predictive in those markets. In addition, the financial and operating results of the acquired businesses, once integrated and reported on a basis consistent with ours, may differ from the results reflected in our due diligence, and we expect to record goodwill and intangible assets that may become impaired.

Current report

A portion of the purchase price may be paid in shares of our common stock, which would dilute our existing stockholders, and may negatively affect the market price of our common stock.

Current report

HOA Holdco may elect to satisfy up to $20.0 million of the amount payable at the closing of the Acquisition in shares of our common stock, which we expect would be newly issued from our authorized but unissued shares. The Reciprocal may elect to satisfy up to $50.0 million of the deferred payments in shares of our common stock that it already holds, a significant portion of the value of which is treated as a non-admitted asset in the Reciprocal’s statutory filings. Shares held by the Reciprocal are treated as treasury shares for accounting purposes and are not considered outstanding under Delaware law for quorum or voting purposes; however, shares delivered to the seller would become outstanding shares held by an unaffiliated third party. The issuance of new shares by us, as well as the transfer of existing shares held by the Reciprocal that become outstanding for voting and accounting purposes, could dilute the percentage ownership and voting power of our existing stockholders and could reduce our earnings per share and adversely affect the trading price of our common stock.

Current report

The number of shares deliverable on any payment date is determined by reference to the trading price of our common stock on the business day immediately prior to that date. A decline in our share price would increase the number of shares required to satisfy a given dollar amount, increasing the potential dilution, and we cannot predict the number of shares that ultimately will be delivered. The Purchase Agreement also requires that the shares be registered for resale and free from transfer restrictions no later than five days following each applicable due date. Resales of those shares by the seller, or the perception that such resales may occur, could cause the trading price of our common stock to decline.

Current report

The Acquisition will increase our exposure to catastrophe losses and our reliance on reinsurance.

Current report

The acquired businesses write residential property insurance in states exposed to hurricanes, windstorms, hail, severe weather events, and other catastrophe events, with a significant concentration in Louisiana and along the Gulf Coast. Following the closing, the properties insured through the Reciprocal and the acquired businesses will be more concentrated in catastrophe-exposed regions than the Reciprocal’s current book of business. A single catastrophe event, or a series of events, could produce claims that exceed the combined reserves, reinsurance recoveries, and capital resources available to the Reciprocal and the acquired businesses. The models we use to assess catastrophe exposure rely on assumptions that may prove inaccurate, particularly in markets where we have limited historical experience.

Current report

Our ability to manage this increased exposure depends on the availability, cost, and performance of reinsurance. The combined policyholder count and geographic concentration may cause reinsurers to require higher premiums, higher attachment points or retentions, reduced limits, or less favorable terms when existing programs are renewed or new programs are placed for the combined operations, and reinsurance may not be available on acceptable terms or at all. We are also exposed to the credit risk of reinsurers and to disputes over recoveries.