RISK FACTORS

Spree shareholders should carefully consider the following risk factors, together with all of the other information included in this proxy statement/prospectus, before they decide whether to vote or instruct their vote to be cast to approve the relevant proposals described in this proxy statement/prospectus.

Risks Related to WHC’s Business, Operations and Industry

Unless the context otherwise requires, any reference in this section of the Risk Factors to “we,” “us” or “our” refers to WHC prior to the consummation of the Business Combination and to New WHC and its consolidated subsidiaries following the Business Combination.

Our limited operating history and our evolving business make it difficult to evaluate our future prospects and the risks and challenges we may encounter.

While we have primarily focused on the provision of mobility services since our formation in 2018, our business continues to evolve. We regularly expand our platform features, offerings and services and change our pricing methodologies. Our evolving business, industry and markets make it difficult to evaluate our future prospects and the risks and challenges we may encounter. Risks and challenges we have faced or expect to face include our ability to:

If we fail to address the risks and difficulties that we face, including those associated with the challenges listed above as well as those described elsewhere in this “Risk Factors” section, our business, financial condition and results of operations could be adversely affected. Further, because we have an evolving financial model and operate in a rapidly evolving market, any predictions about our future revenue and expenses may not be as accurate as they would be if we had a static financial model or operated in a more predictable market. We have encountered in the past, and will encounter in the future, risks and uncertainties frequently experienced by growing companies with limited operating histories in rapidly changing industries. If our assumptions regarding these risks and uncertainties, which we use to plan and operate our business, are incorrect or change, or if we do not address these risks successfully, our results of operations could differ materially from our expectations and our business, financial condition and results of operations could be adversely affected.

The mobility and taxi services industries are highly competitive, with well-established and low-cost alternatives that have been available for decades, low barriers to entry, low switching costs, and well-capitalized competitors in nearly every major geographic region. If we are unable to compete effectively in these industries, our business and financial prospects would be adversely impacted.

Our platform provides offerings in the mobility and taxi services industries. We compete primarily on a domestic basis, and the markets in which we compete are highly fragmented. We face significant competition in each of the mobility and taxi services industries in the United States from existing, well-established, and low-cost alternatives, and in the future we expect to face competition from new market entrants given the low barriers to entry that characterize these industries. In addition, within each of these markets, the cost to switch between services is low. Riders have a propensity to shift to the lowest-cost or highest-quality provider; and drivers have a propensity to shift to the platform with the highest earnings potential.

As we and our competitors introduce new services and offerings, and as existing services evolve, we expect to become subject to additional competition. In addition, our competitors may adopt certain of our service features, or may adopt innovations that drivers and riders value more highly than ours, which would render our services less attractive or reduce our ability to differentiate our services. Increased competition could result in, among other things, a reduction of the revenue we generate from the use of our platform, the number of platform users, the frequency of use of our platform, and our margins.

We face competition in each of our offerings, including:

Many of our competitors are well-capitalized and offer discounted services, driver incentives, rider discounts and promotions, innovative services and offerings, and alternative pricing models, which may be more attractive to riders than those that we offer. Further, some of our current or potential competitors have, and may in the future continue to have, greater resources and access to larger driver or rider bases in a particular geographic market. In addition, our competitors in certain geographic markets enjoy substantial competitive advantages such as greater brand recognition, longer operating histories, larger marketing budgets, better localized knowledge, and more supportive regulatory regimes. As a result, such competitors may be able to respond more quickly and effectively than us in such markets to new or changing opportunities, technologies, rider preferences, regulations, or standards, which may render our services or offerings less attractive. In addition, future competitors may share in the effective benefit of any regulatory or governmental approvals and litigation victories we may achieve, without having to incur the costs we have incurred to obtain such benefits.

For all these reasons, we may not be able to compete successfully against our current and future competitors. Our inability to compete effectively would have an adverse effect on, or otherwise harm, our business, financial condition, and operating results.

If we are unable to attract or maintain a critical mass of drivers and riders, whether as a result of competition or other factors, our platform will become less appealing to platform users, and our financial results would be adversely impacted.

Our success in a given geographic market significantly depends on our ability to maintain or increase our network scale in that geographic market by attracting drivers and riders to our platform. If drivers choose not to offer their services through our platform, or elect to offer them through a competitor’s platform, we may lack a sufficient supply of drivers to attract riders to our platform. We have experienced and expect to continue to experience driver supply constraints in most geographic markets in which we operate. To the extent that we experience driver supply constraints in a given market, we may not be able to increase the fees we charge the drivers to access our platform. If platform users choose to use other mobility services, we may lack sufficient opportunities for drivers to earn a fare, which may reduce the perceived utility of our platform. An insufficient supply of platform users would decrease our network supply and adversely affect our revenue and financial results. Maintaining a balance between supply and demand in any given area at any given time and our ability to execute operationally may be more important to service quality than the absolute size of the network. If our service quality diminishes or our competitors’ services achieve greater market adoption, our competitors may be able to grow at a quicker rate than we do and may diminish our network effect.

Our number of platform users may decline materially or fluctuate as a result of many factors, including, among other things, dissatisfaction with the operation of our platform, the price of fares, dissatisfaction with the quality of service provided by the drivers on our platform, quality of platform user support, negative publicity related to our brand or our industry as a whole, including as a result of safety incidents and corporate reporting related to safety, perceived political or geopolitical affiliations, a pandemic or an outbreak of disease or similar public health concern, such as the COVID-19 pandemic, or fear of such an event, treatment of drivers, dissatisfaction with changes we make to our services and offerings, or dissatisfaction with our services and offerings in general. In addition, if we are unable to provide high-quality support to platform users or respond to reported incidents, including safety incidents, in a timely and acceptable manner, our ability to attract and retain platform users could be adversely affected. If drivers and riders do not establish or maintain active accounts with us, if a social media or other campaign encouraging users to cease use of our platform takes hold, if we fail to provide high-quality support, or if we cannot otherwise attract and retain a large number of drivers and riders, our revenue would decline, and our business would suffer.

The number of drivers on our platform could decline or fluctuate as a result of a number of factors, including drivers ceasing to provide their services through our platform, passage or enforcement of local laws limiting our services and offerings, the low switching costs between competitor platforms or services, and dissatisfaction with our brand or reputation, pricing models, ability to prevent safety incidents, or other aspects of our business.

Often, we are forced to make tradeoffs between the satisfaction of various platform users, as a change that one category of users views as positive will likely be viewed as negative to another category of users. We also take measures to protect against fraud, help increase safety, and prevent privacy and security breaches, including terminating access to our platform for users with low ratings or reported incidents, and imposing certain qualifications for drivers, which may damage our relationships with platform users or discourage or diminish their use of our platform. Any decline in the number of drivers or riders using our platform would reduce the value of our network and would harm our future operating results.

In addition, changes in driver qualification and background-check requirements may increase our costs and reduce our ability to onboard additional drivers to our platform. Our driver qualification and background check process varies by jurisdiction. Legislators and regulators may pass laws or adopt regulations in the future requiring drivers to undergo a materially different type of qualification, screening, or background check process, or that limit our ability to access information used in the background check process in an efficient manner, which could be costly and time-consuming. Required changes in the qualification, screening, and background check process could also reduce the number of drivers in those markets or extend the time required to recruit new drivers to our platform, which would adversely impact our business and growth. Furthermore, we rely on a limited number of background-check providers, and we may not be able to arrange for adequate background checks from different providers on commercially reasonable terms or at all. The failure of this provider to provide background checks on a timely basis would result in our inability to onboard new drivers or retain existing drivers undergoing periodic background checks that are required to continue using our platform.

Our reputation, brand and the network effects among the drivers and riders on our platform are important to our success, and if we are not able to maintain and continue developing our reputation, brand and network effects, our business, financial condition and results of operations could be adversely affected.

We believe that building a strong reputation and brand as a safe, reliable and affordable platform and continuing to increase the strength of the network effects among the drivers and riders on our platform are critical to our ability to attract and retain qualified drivers and riders. The successful development of our reputation, brand and network effects will depend on a number of factors, many of which are outside our control. Negative perception of our platform or company may harm our reputation, brand and networks effects, including as a result of:

If we do not successfully maintain and develop our brand, reputation and network effects and successfully differentiate our offerings from competitor offerings, our business may not grow, we may not be able to compete effectively and we could lose existing qualified drivers or existing riders or fail to attract new qualified drivers or new riders, any of which could adversely affect our business, financial condition and results of operations. In addition, changes we may make to enhance and improve our services and offerings and balance the needs and interests of the drivers and riders on our platform may be viewed positively from one group’s perspective (such as riders) but negatively from another’s perspective (such as drivers), or may not be viewed positively by either drivers or riders. If we fail to balance the interests of drivers and riders or make changes that they view negatively, drivers and riders may stop using our platform, take fewer rides or use alternative platforms, any of which could adversely affect our reputation, brand, business, financial condition and results of operations.

If platform users engage in, or are subject to, criminal, violent, inappropriate, or dangerous activity that results in major safety incidents, our ability to attract and retain drivers and customers may be harmed, which could have an adverse impact on our reputation, business, financial condition, and operating results.

We are not able to control or predict the actions of platform users and third parties, either during their use of our platform or otherwise, and we may be unable to protect or provide a safe environment for drivers and riders as a result of certain actions by drivers, riders and third parties. Such actions may result in injuries, property damage, or loss of life for riders and third parties, or business interruption, brand and reputational damage, or significant liabilities for us. Although we administer certain qualification processes for users of our platform, including background checks on drivers through third-party service providers, these qualification processes and background checks may not expose all potentially relevant information and are limited in certain jurisdictions according to national and local laws, and our third-party service providers may fail to conduct such background checks adequately or disclose information that could be relevant to a determination of eligibility. Consequently, we expect to continue to receive complaints from riders or others, as well as actual or threatened legal action against us related to driver conduct. We have also faced civil litigation alleging, among other things, inadequate safety monitoring and general misrepresentations regarding the safety of our platform.

If our drivers, or individuals impersonating our drivers, engage in criminal activity, misconduct, or inappropriate conduct or use our platform as a conduit for criminal activity, riders may not consider our services and offerings safe, and we may receive negative press coverage as a result of our business relationship with such driver, which would adversely impact our brand, reputation, and business. Some of our competitors have experienced numerous incidents and allegations worldwide of drivers, or individuals impersonating drivers, sexually assaulting, abusing, kidnapping and/or fatally injuring riders, or otherwise engaging in criminal activity while using ridesharing or similar services. Furthermore, if riders engage in criminal activity or misconduct while using our platform, drivers may be unwilling to continue using our platform. In addition, certain regions where we operate have high rates of violent crime, which has impacted drivers and riders in those regions. If other criminal, inappropriate, or other negative incidents occur due to the conduct of platform users or third parties, our ability to attract platform users may be harmed, and our business and financial results could be adversely affected.

Public reporting or disclosure of reported safety information, including information about safety incidents reportedly occurring on or related to our platform, whether generated by us or third parties such as media or regulators, may adversely impact our business and financial results.

Further, we may be subject to claims of significant liability based on traffic accidents, deaths, injuries, or other incidents that are caused by drivers, riders, or third parties while using our platform, or even when drivers, riders, or third parties are not actively using our platform. On a smaller scale, we may face litigation related to claims by drivers for the actions of riders or third parties. Furthermore, operating a motor vehicle is inherently dangerous. Our auto liability and general liability insurance policies may not cover all potential claims to which we are exposed, and may not be adequate to indemnify us for all liability. These incidents may subject us to liability and negative publicity, which would increase our operating costs and adversely affect our business, operating results, and future prospects. Even if these claims do not result in liability, we will incur significant costs in investigating and defending against them. As we expand our services and offerings, this insurance risk will grow.

If we are unable to successfully identify, acquire and integrate suitable operations or businesses, our operating results and prospects could be harmed, and any operations or businesses we acquire may not perform as expected or be effectively integrated.

As part of our business strategy, we have entered into, and expect to continue to enter into, agreements to acquire assets, companies, form joint ventures, divest portions or aspects of our business, sell minority stakes in portions or aspects of our business, and acquire complementary companies or technologies. Competition within our industry for acquisitions of businesses, technologies, and assets is intense. As such, even if we are able to identify a target for acquisition, we may not be able to complete the acquisition on commercially reasonable terms, we may not be able to receive approval from the applicable competition authorities, or such target may be acquired by another company, including one of our competitors.

Further, negotiations for potential acquisitions or other transactions may result in the diversion of our management’s time and significant out-of-pocket costs. We may expend significant cash or incur substantial debt to finance such acquisitions, and such indebtedness may restrict our business or require the use of available cash to make interest and principal payments. In addition, we may finance or otherwise complete acquisitions by issuing equity or convertible debt securities, which may result in dilution to our equity holders, or if such convertible debt securities are not converted, significant cash outlays. If we fail to evaluate and execute acquisitions or other strategic transactions successfully or fail to successfully address any of these risks, our business, financial condition, and operating results may be harmed.

In addition, any operations or businesses we acquire may not perform as well as we expect. Failure to manage and successfully integrate acquired operations, businesses and technologies, including managing internal controls and any privacy or data security risks associated with such acquisitions, may harm our operating results and expansion prospects. The process of integrating an acquired company, operation, business, or technology or acquired personnel into our company is subject to various risks and challenges, including:

We may in the future implement integration structures that do not fully integrate an acquired company’s operating functions. Such structures may delay the efficiencies that we expect to gain from the acquisition and our brand and reputation could be impacted by any damage or reputational harm to the acquired company’s brand.

We may not receive a favorable return on investment for prior or future acquisitions, and we cannot predict whether these transactions will be accretive to the value of our equity. It is also possible that acquisitions, combinations, divestitures, joint ventures, or other strategic transactions we announce could be viewed negatively by the press, investors, platform users, or regulators, any or all of which may adversely affect our reputation and our business. Any of these factors may adversely affect our ability to consummate a transaction, our financial condition, and our operating results.

We are making substantial investments in new offerings and technologies, and may increase such investments in the future. These new ventures are inherently risky, and we may never realize any expected benefits from them.

We have made substantial investments to develop new offerings and technologies, and we intend to continue investing significant resources in developing new technologies, tools, features, services and offerings. For example, we intend to add Black Car service to each of our existing taxicab markets, introduce our zShip package delivery service, and plan on opening our first Silver Lining Motors used car dealership in summer 2023. If we do not spend our development budget efficiently or effectively on commercially successful and innovative services and technologies, we may not realize the expected benefits of our strategy. Our new initiatives also have a high degree of risk and unproven business strategies and technologies with which we have limited or no prior development or operating experience. Because such offerings and technologies are new, they will likely involve claims and liabilities (including, but not limited to, personal injury claims), expenses, regulatory challenges, and other risks, some of which we do not currently anticipate.

There can be no assurance that rider demand for such initiatives will exist or be sustained at the levels that we anticipate, or that any of these initiatives will gain sufficient traction or market acceptance to generate sufficient revenue to offset any new expenses or liabilities associated with these new investments. It is also possible that services and offerings developed by others will render our services and offerings noncompetitive or obsolete. Further, our development efforts with respect to new services, offerings and technologies could distract management from current operations, and will divert capital and other resources from our more established services, offerings and technologies. Even if we are successful in developing new services, offerings or technologies, regulatory authorities may subject us to new rules or restrictions in response to our innovations that could increase our expenses or prevent us from successfully commercializing new services, offerings or technologies. If we do not realize the expected benefits of our investments, our business, financial condition, operating results, and prospects may be harmed.

We may experience significant fluctuations in our operating results. If we are unable to sustain profitability, our prospects would be adversely affected and investors may lose some or all of the value of their investment.

Our operating results may vary significantly and are not necessarily an indication of future performance. These fluctuations may be a result of a variety of factors, some of which are beyond our control. In addition, we may experience seasonal fluctuations in our financial results, such as decreased demand during traditional vacation times. Our growth has made, and may in the future make, seasonal fluctuations difficult to detect. Other seasonal trends may develop or these existing seasonal trends may become more extreme, which would contribute to fluctuations in our operating results. In addition to seasonality, our operating results may fluctuate as a result of factors including our ability to attract and retain new platform users, increased competition in the markets in which we operate, our ability to expand our operations in new and existing markets, our ability to maintain an adequate growth rate and effectively manage that growth, our ability to keep pace with technological changes in the industries in which we operate, changes in governmental or other regulations affecting our business, harm to our brand or reputation, and other risks described elsewhere in this proxy statement/prospectus. As such, we may not accurately forecast our operating results. We base our expense levels and investment plans on estimates. A portion of our expenses and investments are fixed, and we may not be able to adjust our spending quickly enough if our revenue is less than expected, resulting in losses that exceed our expectations. If we are unable to achieve sustained profits, our prospects would be adversely affected and investors may lose some or all of the value of their investment.

If our growth is slower than we currently expect, we may not be able to sustain profitability, which would adversely affect our financial results and future prospects.

We believe that our growth depends on a number of factors including our ability to:

We may not successfully accomplish any of these objectives. A softening of driver or rider demand, whether caused by changes in the preferences of such parties, failure to maintain our brand, changes in the U.S. or global economies, licensing fees in various jurisdictions, competition, or other factors, may result in decreased revenue or growth and our financial results and future prospects would be adversely impacted. We expect to continue to incur significant expenses, and if we cannot increase our revenue at a faster rate than the increase in our expenses, we will not sustain profitability.

Our business depends on retaining and attracting high-quality personnel, and continued attrition, future attrition, or unsuccessful succession planning could adversely affect our business.

Our success depends in large part on our ability to attract and retain high-quality management, operations, engineering, and other personnel who are in high demand, are often subject to competing employment offers, and are attractive recruiting targets for our competitors.

Future leadership transitions and management changes may cause uncertainty in, or a disruption to, our business, and may increase the likelihood of senior management or other employee turnover. The loss of qualified executives and employees, or an inability to attract, retain, and motivate high-quality executives and employees required for the planned expansion of our business, may harm our operating results and impair our ability to grow.

In addition, we depend on the continued services and performance of our key personnel, including our President and Chief Executive Officer and Chief Financial Officer. We may not be able to properly manage any such shift in focus, and any changes to our business may ultimately prove unsuccessful.

In addition, our failure to put in place adequate succession plans for senior and key management roles or the failure of key employees to successfully transition into new roles, for example, as a result of reductions in workforce, organizational changes and attrition, could have an adverse effect on our business and operating results. The unexpected or abrupt departure of one or more of our key personnel and the failure to effectively transfer knowledge and effect smooth key personnel transitions has had and may in the future have an adverse effect on our business resulting from the loss of such person’s skills, knowledge of our business, and years of industry experience. If we cannot effectively manage leadership transitions and management changes in the future, our reputation and future business prospects could be adversely affected.

If we experience security or privacy breaches or other unauthorized or improper access to, use of, disclosure of, alteration of or destruction of our proprietary or confidential data, employee data, or platform user data, we may face loss of revenue, harm to our brand, business disruption, and significant liabilities.

We, or vendors operating on our behalf, collect, use, and process a variety of personal data, such as email addresses, mobile phone numbers, profile photos, location information, drivers’ license numbers and Social Security numbers of drivers, rider payment card information, and driver and rider bank account information. As such, we may be an attractive target of data security attacks by third parties. Any failure to prevent or mitigate security breaches or improper access to, or use, acquisition, disclosure, alteration, encryption, or destruction of, any such data could result in significant liability and a material loss of revenue resulting from the adverse impact on our reputation and brand, a diminished ability to retain or attract new platform users, and disruption to our business. We rely on third-party service providers to host or otherwise process some of our data and that of platform users, and any failure by such third party to prevent or mitigate security breaches or improper access to, or use, acquisition, disclosure, alteration, encryption, or destruction of, such information could have similar adverse consequences for us.

Because the techniques used to obtain unauthorized access, disable or degrade services, or sabotage systems change frequently and are often unrecognizable until launched against a target, we may be unable to anticipate these techniques and implement adequate preventative measures. Our servers and platform may be vulnerable to computer viruses or physical or electronic break-ins that our security measures may not detect. Individuals able to circumvent our security measures may misappropriate confidential, proprietary, or personal information held by or on behalf of us, disrupt our operations, damage our computers, seek ransom to restore and not distribute data, or otherwise damage our business. In addition, we may need to expend significant resources to protect against security breaches or mitigate the impact of any such breaches, including potential liability that may not be limited to the amounts covered by our insurance.

Security breaches could also expose us to liability under various laws and regulations across jurisdictions and increase the risk of litigation and governmental investigation.

Cyberattacks, including computer malware, ransomware, viruses, spamming, and phishing attacks could harm our reputation, business, and operating results.

We rely heavily on information technology systems across our operations. Our information technology systems, including mobile and online platforms and mobile payment systems, administrative functions such as human resources, payroll, accounting, and internal and external communications, and the information technology systems of our third-party business partners and service providers, contain proprietary or confidential information related to business and personal data, including sensitive personal data, entrusted to us by platform users, employees, and job candidates. Cyberattacks that leverage computer malware, ransomware, viruses, spamming, and phishing have become more prevalent, and may occur on our systems or our vendors’ systems in the future. Cyber threats are constantly evolving and employing more sophisticated attack techniques. Our or our vendors’ detection capabilities may not be sufficient to prevent or detect a sophisticated cyber attacker, such as a nation state using a zero-day exploit or unknown malware. Although we have not experienced a cyberattack on our systems to date, future breaches of our or our vendors’ facilities, network, or data security could disrupt the security of our systems and platforms, impair our ability to protect data, compromise confidential or technical business information harming our reputation or competitive position, result in theft or misuse of our intellectual property or other assets, require us to allocate more resources to improve technologies, or otherwise adversely affect our reputation, business and operating results.

Various other factors may also cause system failures or security breaches, including power outages, catastrophic events, inadequate or ineffective redundancy, issues with upgrading or creating new systems or platforms, flaws in third-party software or services, errors by our employees or third-party service providers, or breaches in the security of these systems or platforms. For example, fraudsters may attempt to induce employees or platform users to disclose information to gain access to our data or the data of platform users. If our or our vendors’ incident response, disaster recovery, and business continuity plans do not resolve these issues in an effective manner, they could result in adverse impacts to our business operations and our financial results. Although we have developed, and continue to develop, systems and processes that are designed to protect our data and that of platform users, and to prevent data loss, undesirable activities on our platform, and security breaches, we cannot guarantee that such measures will provide absolute security. Our efforts on this front may be unsuccessful as a result of, for example, software bugs or other technical malfunctions; employee, contractor, or vendor error or malfeasance; government surveillance; or other threats that evolve, and we may incur significant costs in protecting against or remediating cyber-attacks. Any actual or perceived failure to maintain the performance, reliability, security, and availability of our services, offerings, and technical infrastructure to the satisfaction of platform users and certain regulators would likely harm our reputation and result in loss of revenue from the adverse impact to our reputation and brand, disruption to our business, and our decreased ability to attract and retain drivers and riders.

Our platform is highly technical, and any undetected errors could adversely affect our business.

Our platform is a complex system composed of many interoperating components and incorporates software, both our proprietary software and software and services from third parties, that is highly complex. Our business is dependent upon our ability to prevent system interruption on our platform. Our software may now or in the future contain undetected errors, bugs, or vulnerabilities. Some errors in our software code may only be discovered after the code has been released. Bugs in our software, third-party software, misconfigurations of our systems, and unintended interactions between systems could result in our failure to comply with certain federal, state, or foreign reporting obligations, or could cause downtime that would impact the availability of our service to platform users. We have from time to time found defects or errors in our system and may discover additional defects in the future that could result in platform unavailability or system disruption. In addition, we have experienced outages on our platform due to circumstances within our control, such as outages due to software limitations. We rely on third party vendors for the operation of our platform. If our third-party vendors, including without limitation hosting vendors, fail, our platform users may experience down time. If sustained or repeated, any of these outages could reduce the attractiveness of our platform to users. In addition, our release of new software in the past has inadvertently caused, and may in the future cause, interruptions in the availability or functionality of our platform. Any errors, bugs, or vulnerabilities discovered in our code or systems after release could result in an interruption in the availability of our platform or a negative experience for drivers and riders and could also result in negative publicity and unfavorable media coverage, damage to our reputation, loss of platform users, loss of revenue or liability for damages, regulatory inquiries, or other proceedings, any of which could adversely affect our business and financial results.

Failure to protect or enforce our intellectual property rights could harm our business, financial condition and results of operations.

Our success depends in part on our ability to obtain, maintain, protect, and enforce our intellectual property and other proprietary rights. We rely upon a combination of trademark, copyrights, and trade secret laws, as well as affiliate agreements, confidentiality agreements and other similar agreements, to protect our intellectual property and other proprietary rights. The foregoing provides only limited protection and any of the intellectual property rights owned by or licensed to us may be challenged, invalidated, circumvented, infringed, misappropriated or otherwise violated.

There can also be no assurances that third parties will not also independently develop or offer services that are similar to, or competitive with, our services. Despite our efforts to protect our intellectual property, unauthorized parties may also attempt to disclose, copy, use, duplicate or obtain and use our intellectual property, and policing unauthorized use of our technology and intellectual property rights is difficult, costly and may not be effective. In order to adequately protect our intellectual property and other proprietary rights, we may be required to devote significant time and resources to defending against claims or protecting and enforcing our own rights. Furthermore, attempts to enforce our intellectual property rights against third parties could also provoke these third parties to assert their own intellectual property or other rights against us, or result in a holding that invalidates or narrows the scope of our rights, in whole or in part. These actions as well as any failure to secure, maintain, protect or enforce our intellectual property and other proprietary rights could have a material adverse effect on our business, financial condition, and results of operations.

Our success and ability to compete also depends in part on our ability to operate without infringing, misappropriating or otherwise violating the intellectual property or proprietary rights of third parties. We may in the future encounter disputes from time to time concerning intellectual property rights of others, including our competitors, and we may not prevail in these disputes. Third parties may raise claims against us alleging an infringement, misappropriation or other violation of their intellectual property rights, including trademarks, copyrights, trade secrets or other intellectual property or proprietary rights. We may not be aware of whether our products or services do or will infringe existing or future intellectual property rights of others even if we diligently search for third-party intellectual property that our products or services may potentially infringe. Litigation may be necessary to defend against alleged infringement or determine the validity and scope of proprietary rights claimed by others. The resolution of any such disputes or litigations is difficult to predict.

An assertion of an intellectual property infringement, misappropriation or other violation claim against us, regardless of the merit of such claims, may result in adverse judgments, settlement on unfavorable terms or cause us to spend significant amounts to defend the claim, even if we ultimately prevail and we may have to pay significant monetary damages, lose significant revenues, be prohibited from using the relevant technologies or other intellectual property (temporarily or permanently), cease providing certain product offerings or incur significant license, royalty or technology development expense, or suffer harm to our brand, any of which could adversely affect our business, financial condition and results of operations. Even in instances where we believe that claims and allegations of intellectual property infringement, misappropriation or other violation against us are without merit, defending against such claims could be costly, time consuming and could result in the diversion of time and attention of our management team and technical personnel. In addition, although in some cases a third party may have agreed to indemnify us for such infringement, misappropriation or other violation, such indemnifying party may refuse or be unable to uphold its contractual obligations. In other cases, our insurance may not cover potential claims of this type adequately or at all, and we may be required to pay monetary damages, which may be significant.

An adverse determination in any intellectual property claim could require us to pay damages and/or stop using our technologies, trademarks, copyrighted works and other material found to be in violation of another party’s rights and could prevent us from using our technologies unless we enter into royalty or licensing arrangements with the prevailing party or are able to redesign our product offerings and processes to avoid infringement. Any such license may not be available on reasonable terms, if at all, and there can be no assurance that we would be able to redesign our product offerings in a way that would not infringe the intellectual property rights of others. In addition, such claims may result in negative publicity about us, which could harm our reputation.

If our trademarks and trade names are not adequately protected, then we may not be able to build name recognition in our markets of interest and our business may be adversely affected.

We rely on our trademarks, service marks, Internet domain names and logos to market our brands and to build and maintain brand loyalty and recognition. We rely on trademark protections to protect our business and our service offerings. We generally seek to register and continue to register and renew, or secure by contract where appropriate, trademarks, trade names and service marks as they are developed and used, and reserve, register and renew domain names as appropriate. Our registered or unregistered trademarks, trade names or service marks may be challenged, infringed, circumvented or declared generic or determined to be infringing on other marks. Similarly, not every variation of a domain name may be available or be registered, even if available. We may not be able to protect our rights to these trademarks, domain names and trade names, which we need to build brand name recognition by potential customers or partners in our markets of interest. While we seek to protect the trademarks we use, we may be unsuccessful in obtaining registrations and/or otherwise protecting these trademarks. If that were to happen, we may be prevented from using our names, brands and trademarks unless we enter into appropriate royalty, license or coexistence agreements. Furthermore, if we expand our services and offerings outside the United States in the future, ineffective legal protection of our trademarks, trade names and service marks, or existing entities using such trademarks, trade names or service marks in those regions might adversely affect our ability to protect our rights to such intellectual property and establish brand recognition in certain international markets. Over the long term, if we are unable to establish name recognition based on our trademarks, service marks, domain names and trade names, then we may not be able to compete effectively and our business could be adversely affected.

Our ownership of the proprietary source code and other intellectual property that we use in the business may be challenged and subject us to adverse effects.

We have not obtained written intellectual property assignment agreements from all the employees or contractors that have developed our proprietary source code and other intellectual property. We believe that we own or otherwise have the right to use all proprietary source code and other intellectual property used in our business by operation of law or written assignment agreements. However, until such time as all our employees or contractors who developed source code or other intellectual property used in our business have executed written assignment agreements definitively assigning to us ownership of all such source code and other intellectual property, there is some risk that a party involved in the creation of such source code or other intellectual property may dispute our ownership or right to use such source code or intellectual property. If our right to use such source code or intellectual property is challenged, we may need to expend resources to defend against a legal challenge or proceeding or redevelop portions of our platform. We intend to seek fully executed assignment agreements from all employees or contractors who have developed source code or other intellectual property used in our business prior to or shortly after the consummation of the transaction to further evince our ownership status.

If we are unable to successfully introduce new or upgraded services, offerings, or features for drivers and riders, we may fail to retain and attract such users to our platform and our operating results would be adversely affected.

To continue to retain and attract drivers and riders to our platform, we will need to continue to invest in the development of new services, offerings, and features that add value for drivers and riders, and that differentiate us from our competitors. Developing and delivering these new or upgraded services, offerings, and features is costly, and the success of such new services, offerings, and features depends on several factors, including the timely completion, introduction, and market acceptance of such services, offerings, and features. Moreover, any such new or upgraded services, offerings, or features may not work as intended or may not provide intended value to platform users. If we are unable to continue to develop new or upgraded services, offerings, and features, or if platform users do not perceive value in such new or upgraded services, offerings, and features, platform users may choose not to use our platform, which would adversely affect our operating results.

We track certain operational metrics and our category position with internal systems and tools, and do not independently verify such metrics. Certain of our operational metrics are subject to inherent challenges in measurement, and real or perceived inaccuracies in such metrics may harm our reputation and negatively affect our business.

We track certain operational metrics with internal systems and tools, including through our zMetricz analytics platform, that are not independently verified by any third party and which may differ from estimates or similar metrics published by third parties due to differences in sources, methodologies, or the assumptions on which we rely. Our internal systems and tools have a number of limitations, and our methodologies for tracking these metrics may change over time, which could result in unexpected changes to our metrics, including the metrics we publicly disclose, or our estimates of our category position. If the internal systems and tools we use to track these metrics undercount or over count performance or contain algorithmic or other technical errors, the data we report may not be accurate. While these numbers are based on what we believe to be reasonable estimates of our metrics for the applicable period of measurement, there are inherent challenges in measuring how our services are used across large populations across North America. For example, riders may have multiple accounts. In addition, limitations or errors with respect to how we measure data or with respect to the data that we measure may affect our understanding of certain details of our business, which could affect our long-term strategies. If our operating metrics are not accurate representations of our business, or if investors do not perceive our operating metrics to be accurate, or if we discover material inaccuracies with respect to these figures, our reputation may be significantly harmed, and our operating and financial results could be adversely affected.

Loss or material modification of our credit card acceptance privileges could have an adverse effect on our business and operating results.

In 2022, approximately $57.9 million of our gross bookings were paid by either credit card or debit card. As such, the loss of our credit card acceptance privileges would significantly limit our business model. We are required by our payment processors to comply with payment card network operating rules, including the Payment Card Industry (“PCI”) and Data Security Standard (the “Standard”). The Standard is a comprehensive set of requirements for enhancing payment account data security developed by the PCI Security Standards Council to help facilitate the broad adoption of consistent data security measures. Our failure to comply with the Standard and other network operating rules could result in fines or restrictions on our ability to accept payment cards. Under certain circumstances specified in the payment card network rules, we may be required to submit to periodic audits, self-assessments, or other assessments of our compliance with the Standard. Such activities may reveal that we have failed to comply with the Standard. If an audit, self-assessment, or other test determines that we need to take steps to remediate any deficiencies, such remediation efforts may distract our management team and require us to undertake costly and time consuming remediation efforts. In addition, even if we comply with the Standard, there is no assurance that we will be protected from a security breach. Moreover, the payment card networks could adopt new operating rules or interpret existing rules that we or our processors might find difficult or even impossible to follow, or costly to implement. The payment card network rules and applicable laws also may require us to make certain disclosures in a certain manner to riders in relation to the checkout process and to resolve payment-related disputes with our riders in accordance with applicable laws and rules. In addition to violations of network rules, including the Standard, any failure to maintain good relationships with the payment card networks and payment processors and banks that facilitate our use of the payment card networks and other payment methods could impact our ability to receive incentives from them, could increase our costs, or could otherwise harm our business. The loss of our credit card acceptance privileges for any one of these reasons, or the significant modification of the terms under which we obtain credit card acceptance privileges, may have an adverse effect on our business, revenue, and operating results.

Our vehicle fleet ownership strategy exposes us to certain risks, including with respect to the acquisition of vehicles on favorable terms, decreases in the residual value related to the used car market values, or reductions in the utilization of vehicles in the fleets.

Unlike TNC providers such as Uber or Lyft, we own the majority of our fleet of vehicles used by our drivers rather than our drivers using their personally owned vehicles. Historically, we have been able to purchase the majority of our vehicles from sellers on economically favorable terms. There can be no assurances that we will be able to continue purchasing future vehicles on economically favorable terms. We may need to purchase new vehicles in the future from auto manufacturers or other third parties. To the extent that any of these auto manufacturers or other third parties significantly curtail production, increase the cost of purchasing cars or decline to sell cars to us on economically favorable terms, despite sourcing vehicles from the used car market and other efforts to mitigate, we may be unable to obtain a sufficient number of vehicles to operate our businesses without significantly increasing fleet costs or reducing volumes. In addition, in the event that auto manufacturers issue recalls that affect the usage or the supply of vehicles or automotive parts is interrupted, including as a result of public health crises, such as the COVID-19 pandemic, affecting vehicles in our fleet, we may incur additional costs or delays in servicing our fleet, resulting in reduced utilization of the vehicles in our fleet. Reduced utilization could increase the costs of maintaining our fleet or storing or moving unused vehicles.

We intend to sell our vehicles when we determine that such vehicles should be replaced due to age or condition. Our ability to generate a return on these sales may be adversely impacted by the relative strength of the used car market. We currently sell vehicles through auctions, third-party resellers and other channels in the used vehicle marketplace. Such channels may not produce stable used vehicle prices. It may be difficult to estimate the residual value of vehicles used in our platform. A reduction in residual values for vehicles in our fleet could cause us to sustain a substantial loss on the ultimate sale of such vehicles or require us to depreciate those vehicles at a more accelerated rate. If we are unable to obtain and maintain our fleet of vehicles cost-efficiently or if we are unable to accurately forecast the residual values of vehicles in the fleets, our business, financial condition and results of operations could be adversely affected.

Our new delivery service platform may not be successful and may expose us to additional risks.

We are in the process of deploying our new zShip package delivery in select markets. This offering, which began beta testing in Kansas City in 2021, will allow businesses to send goods from one location to another. We intend to begin a formal rollout in Austin Texas and Houston Texas in the first quarter of 2023. Drivers are provided the opportunity to opt-in to receive delivery requests and are currently paid based on a delivery-specific fare structure. We face a number of challenges that may affect the ultimate success of this offering, including:

Additionally, the development of this delivery service platform may divert resources, including management’s attention, from our other offerings and adversely affect their development. If we are unable to develop and grow our delivery service platform, or unable to do so cost-effectively, whether as a result of our own actions or market conditions more generally, our business, financial condition and results of operations could be adversely affected.

We may expand our services and offerings outside the United States in the future, and any future international expansion strategy will subject us to additional costs and risks and our plans may not be successful.

We may expand our services and offerings outside the United States in the future. Operating outside of the United States may require significant management attention to oversee operations over a broad geographic area with varying cultural norms and customs, in addition to placing strain on our finance, analytics, compliance, legal, engineering and operations teams. We may incur significant operating expenses and may not be successful in our international expansion for a variety of reasons, including:

Our lack of experience in operating our business internationally increases the risk that any potential future international expansion efforts that we may undertake may not be successful. If we invest substantial time and resources to expand our operations internationally and are unable to manage these risks effectively, our business, financial condition and results of operations could be adversely affected.

In addition, international expansion may increase our risks in complying with laws and standards in the U.S. and other jurisdictions, including with respect to customs, anti-corruption, anti-bribery, export controls and trade and economic sanctions. We cannot assure you that our employees and agents will not take actions in violation of applicable laws, for which we may be ultimately held responsible. In particular, any violation of the applicable anti-corruption, anti-bribery, export controls and similar laws could result in adverse media coverage, investigations, significant legal fees, loss of export privileges, severe criminal or civil sanctions or suspension or debarment from U.S. government contracts, and/or substantial diversion of management’s attention, all of which could have an adverse effect on our reputation, brand, business, financial condition and results of operations.

We are subject to climate change risks, including physical and transitional risks, and if we are unable to manage such risks, our business may be adversely impacted.

We face climate change related physical and transition risks, which include the risk of market shifts toward electric vehicles (“EVs”) and lower carbon business models and risks related to extreme weather events or natural disasters. If we acquire EVs in the future, or if our drivers utilize their own EVs in providing services under our platform, the increased costs of acquiring and maintaining EVs and range limitations of EVs could increase our and our drivers’ operating costs. In addition, climate-related events, including the increasing frequency, severity and duration of extreme weather events and their impact on critical infrastructure in the United States and elsewhere, have the potential to disrupt our business, our third-party suppliers, and the business of drivers using our platform, and may cause us to experience higher losses and additional costs to maintain or resume operations. Furthermore, as we continue to expand our operations, we may in the future become subject to emerging climate policies such as California’s Clean Miles Standard and Incentive Program, which imposes greenhouse gas and EV requirements on our industry. Failure to meet such future requirements may have adverse impacts on our costs and ability to operate in California, as well as public goodwill towards our company.

Risks Related to Regulatory and Legal Factors

Our business is subject to a wide range of laws and regulations, many of which are evolving, and failure to comply with such laws and regulations could harm our business, financial condition and results of operations.

We are subject to a wide variety of laws in the United States and other jurisdictions. Laws, regulations and standards governing issues such as TNCs, taxi cab operations, worker classification, labor and employment, anti-discrimination, payments, gift cards, whistleblowing and worker confidentiality obligations, product liability, defects, recalls, auto maintenance and repairs, personal injury, text messaging, subscription services, intellectual property, securities, rider protection, taxation, privacy, data security, competition, unionizing and collective action, antitrust, terms of service, mobile application accessibility, insurance, money transmittal, non-emergency medical transportation, healthcare fraud, waste, and abuse, environmental health and safety, greenhouse gas emissions, background checks, public health, anti-corruption, anti-bribery, political contributions, lobbying, import and export restrictions, trade and economic sanctions, foreign ownership and investment, foreign exchange controls and delivery of goods including (but not limited to) medical supplies and prescription drugs are often complex and subject to varying interpretations, in many cases due to their lack of specificity. As a result, their application in practice may change or develop over time through judicial decisions or as new guidance or interpretations are provided by regulatory and governing bodies, such as federal, state and local administrative agencies.

We operate a network of taxi operators and transportation service providers. As such, we are subject to a wide variety of laws and regulations at both the state and local levels. These laws, regulations and standards govern matters concerning taxi, black car, shuttle and paratransit services, TNCs, ridesharing, worker classification, labor and employment, anti-discrimination, payments, gift cards, whistleblowing and worker confidentiality obligations, product liability, personal injury, text messaging, subscription services, intellectual property, rider protection, taxation, privacy, data security, competition, unionizing and collective action, arbitration agreements and class action waiver provisions, terms of service, mobile application accessibility, bike and scooter sharing, money transmittal, non-emergency medical transportation, autonomous vehicles and background checks.

The type of regulation varies. As such, we are sometimes governed by extensive regulations that may apply to nearly every aspect of our taxi service, including but not limited to, market entry, transfer of control, fleet size. franchises, fare setting, airport surcharges, driver requirements, limitations on the number of permits, vehicle requirements, insurance coverage, geographic coverage, access for disabled riders, antidiscrimination provisions and proof of public convenience and necessity. In certain jurisdictions our black car, shuttle, and paratransit services are also subject to somewhat similar regulations.

We also operate as a TNC in Missouri, Indiana and Pennsylvania. Due to the rapid changes that are occurring in the transportation industry as a result of new information and communications technologies in general and in ridesharing in particular, large majority of states have adopted laws related to TNCs to address the unique issues of the ridesharing industry. New laws and regulations and changes to existing laws and regulations continue to be adopted, implemented and interpreted in response to our industry and related technologies. These regulations are often complex and subject to varying interpretations, in many cases due to their lack of specificity, and, as a result, their application in practice may change or develop over time through judicial decisions or as new guidance or interpretations are provided by regulatory and governing bodies, such as federal, state and local administrative agencies.

We may be subjected to claims and lawsuits and other proceedings that may adversely affect our business, financial condition and results of operations.

We have been subject to claims, lawsuits, and other legal and regulatory proceedings in the ordinary course of business, and we may become subject to additional types of claims, lawsuits, government investigations and legal or regulatory proceedings as our business grows and as we deploy new offerings. We have also been subject to claims, lawsuits and other legal and regulatory proceedings seeking to hold us liable for the actions of independent contractor drivers on our platform.

The results of any such claims, lawsuits, arbitration proceedings, government investigations or other legal or regulatory proceedings cannot be predicted with certainty. Any claims against us, whether meritorious or not, could be time-consuming, result in costly litigation, be harmful to our reputation, require significant management attention and divert significant resources. Determining reserves for our pending litigation is a complex and fact-intensive process that requires significant subjective judgment and speculation. It is possible that a resolution of one or more such proceedings could result in substantial damages, settlement costs, fines and penalties that could adversely affect our business, financial condition and results of operations. These proceedings could also result in harm to our reputation and brand, sanctions, consent decrees, injunctions or other orders requiring a change in our business practices. Any of these consequences could adversely affect our business, financial condition and results of operations. Furthermore, under certain circumstances, we have contractual and other legal obligations to indemnify and to incur legal expenses on behalf of our business, commercial, and government partners and current and former directors and officers.

As we continue to expand our platform offerings and user base, we may become subject to additional laws and regulations, which may differ or conflict from one jurisdiction to another. Many of these laws and regulations were adopted prior to the advent of the TNC industry and related technologies and, as a result, do not contemplate or address the unique issues faced by the TNC industry.

For example, contracting with healthcare entities and transportation brokers representing healthcare entities may subject us to certain healthcare related laws and regulations. These laws and regulations may impose additional requirements on us and our platform in providing access to rides on behalf of healthcare partners through our enterprise mobility services offered by our Other segment. Additional requirements may arise related to the collection and storage of data and systems infrastructure design, all of which could increase the costs associated with our offerings to healthcare partners. With respect to our healthcare rides matched through our enterprise mobility offering and provided to Medicaid or Medicare Advantage beneficiaries, we are subject to healthcare fraud, waste and abuse laws that impose penalties for violations. Significant violations of such laws could lead to our loss of Medicaid provider enrollment status, and could also potentially result in exclusion from the federal programs as an authorized transportation platform provider. Further, we may in certain circumstances be or become considered a government contractor with respect to certain of our services, which would expose us to certain risks such as the government’s ability to unilaterally terminate contracts, the public sector’s budgetary cycles and funding authorization, and the government’s administrative and investigatory processes.

Despite our efforts to comply with applicable laws, regulations and other obligations relating to our platform offerings, it is possible that our practices, offerings or platform could be inconsistent with, or fail or be alleged to fail to meet all requirements of, such laws, regulations or obligations. Our failure, or the failure by our third-party providers or partners, to comply with applicable laws or regulations or any other obligations relating to our platform offerings, could harm our reputation and brand, discourage new and existing drivers and riders from using our platform, lead to refunds of rider fares or result in fines or proceedings by governmental agencies or private claims and litigation, any of which could adversely affect our business, financial condition and results of operations.

A determination in, or settlement of, any legal proceeding, whether we are party to such legal proceeding or not, that involves our industry, could harm our business, financial condition and results of operations. For example, a determination that classifies one of our drivers as an employee, whether we are party to such determination or not, could cause us to incur significant expenses or require substantial changes to our business model.

Our business would be adversely affected if drivers were classified as employees, workers or quasi-employees.

The classification of drivers as independent contractors by mobility service providers is currently being challenged in courts, by legislators and by government agencies in the United States and abroad. We believe that our drivers are independent contractors because, among other things, they can choose whether, when, and where to provide services on our platform, can experience profit (or a potential loss) because they have an investment in their business, are obligated to pay the full lease regardless of what they earn, and even if they own their own car, the contractors must pay a flat fee to purchase our services. Further, the contractors are free to provide services on our competitors’ platforms. All of our operating companies are licensed as taxicab companies and in some markets are also licensed as TNCs. Our business model is a hybrid between a taxicab and a TNC while primarily operating as a licensed taxicab operator with app-based features similar to other TNC companies (e.g. Uber or Lyft). Nevertheless, we may not be successful in defending the classification of drivers in some or all jurisdictions should a challenge to their classification arise. Furthermore, the costs associated with defending, settling, or resolving pending and future government agency investigations, board complaints, and lawsuits relating to the classification of drivers may be material to our business.

Changes to federal, state, and local laws governing the definition or classification of independent contractors, or agency and judicial decisions regarding independent contractor classification, could require classification of drivers as employees (or workers or quasi-employees where those statuses exist) and/or representation of drivers by labor unions. For example, California’s Assembly Bill 5 (“AB5”) became effective as of January 1, 2020. Government authorities and private plaintiffs have brought litigation asserting that Assembly Bill 5 requires drivers in California to be classified as employees. Various lawsuits have been brought to challenge AB5 including a case that is now pending at the Ninth Circuit. Oral argument was held in July 2022. Related lawsuits have also been brought by the trucking industry to challenge application of AB5 to commercial truck drivers. The Ninth Circuit upheld the law finding that AB5 is a proper regulation of economic activity, not speech, and that it was not preempted by federal law. On June 27, 2022, the United States Supreme Court declined to hear those cases.

As a response to AB5, in November 2020, California voters approved Proposition 22, a California state ballot initiative that provides a framework for drivers that use platforms like ours for independent contractor work. Proposition 22 went into effect in December 2020 but in August 2021, a California state court judge declared Proposition 22 unconstitutional and unenforceable. The case is currently on appeal to the California Court of Appeals. As of August 2022, oral argument was pending. If Proposition 22 is upheld, for any operations we may develop in California, our drivers may be able to maintain their status as independent contractors under California law, however, we and our competitors will be required to comply with the provisions of Proposition 22.

There are similar challenges in other jurisdictions. For example, in July 2020, the Massachusetts Attorney General filed a complaint against Uber and Lyft, alleging that drivers are misclassified, and seeking an injunction. There are other government agency and private lawsuits by drivers or classes of drivers throughout the United States also challenging their independent contractor classification. Note, these examples are representative and not exhaustive of the types of misclassification legislation and potential legal challenges we may face in various jurisdictions.

In addition, reclassification of drivers as employees, workers or quasi-employees where those statuses exist, have and could lead to groups of drivers becoming represented by labor unions and similar organizations. If a significant number of drivers were to become unionized and collective bargaining agreement terms were to deviate significantly from our business model, our business, financial condition, operating results and cash flows could be materially adversely affected. In addition, a labor dispute involving drivers may harm our reputation, disrupt our operations and reduce our net revenues, and the resolution of labor disputes may increase our costs.

While our business differs in some material respects from that of Uber and Lyft, and historically taxi drivers have been considered independent contractors, courts, administrative agencies, or other governing bodies may choose to apply the rules applicable to other industries to our business given our app-based capabilities, which may have a material impact on our business model, our business, financial condition, operating results and cash flows which could be materially adversely affected. If, as a result of legislation or judicial decisions, we are required to classify drivers as employees, we would incur significant additional expenses for compensating drivers, including expenses associated with the application of wage and hour laws (including minimum wage, overtime, and meal and rest period requirements), employee benefits, social security contributions, taxes (direct and indirect), and potential penalties. In this case, we anticipate significant price increases for riders to offset these additional costs. Additionally, we may not have adequate driver supply as drivers may opt out of our platform given the loss of flexibility under an employment model, and we may not be able to contract with a majority of the drivers currently using our platform. Further, any such reclassification would require us to fundamentally change our business model, and consequently have an adverse effect on our business, results of operations, financial position and cash flows.

In addition, if we are required to classify drivers as employees, workers or quasi-employees, this may impact our current financial statement presentation including revenue and cost of revenue.

Changes in laws or regulations relating to privacy or the protection or transfer of data relating to individuals, or any actual or perceived failure by us to comply with such laws and regulations or any other obligations relating to privacy or the protection or transfer of data relating to individuals, could adversely affect our business.

We, or vendors operating on our behalf, receive, transmit, and store a large volume of personal data relating to the users on our platform, as well as other personal data relating to individuals such as our employees and independent contractors including drivers. Numerous local, municipal, state, federal, and international laws and regulations address privacy and the collection, storing, sharing, use, disclosure, and protection of certain types of data, including without limitation the California Online Privacy Protection Act, the Controlling the Assault of Non-Solicited Pornography and Marketing Act, the Telephone Consumer Protection Act of 1991 (the “TCPA”), Section 5 of the Federal Trade Commission Act, the California Consumer Privacy Act (the “CCPA”), the California Privacy Rights Act (the “CPRA”) and the U.S. Federal Health Insurance Portability and Accountability Act of 1996, (“HIPAA”), and newly passed legislation in states such as Virginia, Colorado, Connecticut, and Utah. These laws, rules, and regulations evolve frequently and their scope may continually change, through new legislation, amendments to existing legislation, and changes in enforcement, and may be inconsistent from one jurisdiction to another.

In the United States, the CCPA, which went into effect on January 1, 2020, among other things, requires disclosures to California riders, imposes obligations on businesses that process California riders’ personal information, and affords such riders new rights, including the ability to opt out of certain sales of personal information. The CCPA provides for fines of up to $7,500 per violation as well as a private right of action for certain data breaches that result in the loss of personal information, which could increase the likelihood of, and risks associated with, data breach litigation.

The CCPA continues to evolve and could require us to modify our data processing practices and policies and expose us to further regulatory or operational burdens. Also, the CPRA was approved by California voters and significantly modifies the CCPA, resulting in further uncertainty and likely requiring us to incur additional costs and expenses in an effort to comply. The CPRA has created obligations relating to personal information as of January 1, 2022. Other states have also enacted or proposed similar privacy laws, including Virginia, Colorado, Connecticut, and Utah. All of these laws differ from the CPRA and similar laws are being considered by other state legislatures. This legislation and other proposed laws may add additional complexity, variation in requirements, restrictions and potential legal risk, require additional investment of resources in compliance programs, impact strategies and the availability of data and could result in increased compliance costs or changes in business practices and policies. In addition, all 50 states have laws including obligations to provide notification of security breaches involving personal data to affected individuals, state officers and others.

Moreover, we may become subject to additional countries’ privacy laws if we expand into other countries. For example, we may become subject to the GDPR, which imposes strict requirements relating to the processing of personal data. European Union (“EU”) member states have enacted legislation that adds to or interprets the GDPR requirements and potentially extends our obligations and potential liability for failing to meet such obligations. Among other requirements, the GDPR regulates transfers of personal data subject to the GDPR to the United States as well as other countries that have not been found to provide adequate protection to such personal data. The GDPR also afford greater control for data subjects (for example, the “right to be forgotten”), increased data portability for data subjects, and data breach notification requirements. Noncompliance is subject to significant penalties, which can include fines of up to the greater of €20 million or 4% of total worldwide revenue and injunctions against the processing of personal data. Such penalties are in addition to any civil litigation claims by riders and data subjects. Other countries each have their own privacy laws with additional requirements and potential liabilities if we are or become subject to their requirements (e.g., Canada’s Personal Information Protection and Electronic Documents Act).

Further, the collection and storage of data in connection with the use of our enterprise mobility offerings in our Other segment for healthcare services by healthcare partners subjects us to compliance requirements under HIPAA. HIPAA and its implementing regulations contain requirements regarding the use, collection, security, storage and disclosure of individuals’ protected health information, or PHI. In 2009, HIPAA was amended by the HITECH Act to impose certain of HIPAA’s privacy and security requirements directly upon business associates of covered entities. Contracted healthcare entities including healthcare providers, health plans, and transportation brokers using our enterprise mobility offerings in our Other segment for healthcare services are either covered entities or business associates under HIPAA. We must also comply with HIPAA as we use and disclose the PHI of riders in our capacity as a business associate of other contracted healthcare entities. Compliance obligations under HIPAA include privacy, security and breach notification obligations, and could subject us to increased liability for any unauthorized uses or disclosures of PHI determined to be a “breach.” If we knowingly breach the HITECH Act’s requirements, we could be exposed to criminal liability. A breach of our safeguards and processes could expose us to civil penalties that range from $100 - $50,000 per violation, with an annual maximum per violation calendar year cap of $1.5 million for “willful neglect” violations and the possibility of civil litigation.

In addition to laws and regulations, we are subject to industry standards, such as the Payment Card Industry Data Security Standard, which requires companies to adopt certain measures to ensure the security of cardholder information. We may also be contractually required to indemnify and hold harmless third parties from the costs or consequences of non-compliance with any laws, regulations or other legal obligations relating to privacy, data protection, information security or consumer protection or any loss, unavailability or inadvertent or unauthorized use, modification, disclosure, or other processing of data that we store or handle as part of operating our business.

We may incur significant expenses in an effort to comply with privacy, data protection, and information security standards and protocols imposed by law, regulation, industry standards, or contractual obligations. In particular, with laws and regulations such as the CCPA, CPRA, new state laws, the potential for new federal legislation, and GDPR imposing new and relatively burdensome obligations, and with substantial uncertainty over the interpretation and application of these and other laws and regulations, we may face challenges in addressing their requirements and making necessary changes to our policies and practices and may incur significant costs and expenses in an effort to do so. In particular, with regard to HIPAA, we may incur increased costs as we perform our obligations to our healthcare riders under our agreements with them.

We rely on third-party service providers to conduct marketing via text messaging and assist in TCPA compliance. Any interruption, delays, or modifications in services from these third parties could result in liabilities in connection with laws and regulations, including TCPA, that address privacy and the collection, storing, sharing, use, disclosure, and protection of certain types of data.

Despite our efforts to comply with applicable laws, regulations, and other obligations relating to privacy, data protection, and information security, it is possible that our or our vendors’ interpretations of the law, practices, or platform could be inconsistent with, or fail or be alleged to fail to meet all requirements of, such laws, regulations, or obligations. Our failure, or the failure by our vendors on our platform, to comply with applicable laws or regulations or any other obligations relating to privacy, data protection, or information security, or any compromise of security that results in unauthorized access to, or use or release of personal data or other data relating to drivers, riders, or other individuals, or the perception that any of the foregoing types of failure or compromise has occurred, could damage our reputation, discourage new and existing drivers and riders from using our platform, or result in notifications to victims and offering of remediation services, fines, investigations, or proceedings by governmental agencies and private claims and litigation, any of which could adversely affect our business, financial condition, and results of operations. Even if not subject to legal challenge, the perception of privacy concerns, whether or not valid, may harm our reputation and brand and adversely affect our business, financial condition, and results of operations.

Risks Related to Dependencies on Third Parties

The successful operation of our business depends upon the performance and reliability of Internet, mobile, and other infrastructures that are not under our control.

Our business depends on the performance and reliability of Internet, mobile, and other infrastructures that are not under our control. Disruptions in Internet infrastructure or GPS signals or the failure of telecommunications network operators to provide us with the bandwidth we need to provide our services and offerings have interfered, and could continue to interfere with the speed and availability of our platform. If our platform is unavailable when platform users attempt to access it, or if our platform does not load as quickly as platform users expect, platform users may not return to our platform as often in the future, or at all, and may use our competitors’ services or offerings more often. In addition, we have no control over the costs of the services provided by national telecommunications operators. If mobile Internet access fees or other charges to Internet users increase, rider traffic may decrease, which may in turn cause our revenue to significantly decrease.

Our business depends on the efficient and uninterrupted operation of mobile communications systems. The occurrence of an unanticipated problem, such as a power outage, telecommunications delay or failure, security breach, or computer virus could result in delays or interruptions to our services, offerings, and platform, as well as business interruptions for us and platform users. Furthermore, foreign governments may leverage their ability to shut down directed services, and local governments may shut down our platform at the routing level. Any of these events could damage our reputation, significantly disrupt our operations, and subject us to liability, which could adversely affect our business, financial condition, and operating results. We have invested significant resources to develop new services to mitigate the impact of potential interruptions to mobile communications systems, which can be used by riders in territories where mobile communications systems are less efficient. However, these services may ultimately be unsuccessful.

We rely on third parties maintaining open marketplaces to distribute our platform and to provide the software we use in certain of our services and offerings. If such third parties interfere with the distribution of our services or offerings or with our use of such software, our business would be adversely affected.

Our platform relies on third parties maintaining open marketplaces, including the Apple App Store and Google Play, which make applications available for download. We cannot assure you that the marketplaces through which we distribute our platform will maintain their current structures or that such marketplaces will not charge us fees to list our applications for download. For example, Apple Inc. requires that iOS apps obtain users’ permission to track their activities across third-party apps and websites. If iOS users do not grant us such permission, our ability to target those users for advertisements and to measure the effectiveness of such advertisements may be adversely affected, which could decrease the effectiveness of our advertising, and increase our costs to acquire and engage users on our platform. We rely upon certain third parties to provide software for our services and offerings, including Google Maps for the mapping function that is critical to the functionality of our platform. We do not believe that an alternative mapping solution exists that can provide the global functionality that we require to offer our platform in all of the markets in which we operate. We do not control all mapping functions employed by our platform or drivers using our platform, and it is possible that such mapping functions may not be reliable. If such third parties cease to provide access to the third-party software that we and drivers use, do not provide access to such software on terms that we believe to be attractive or reasonable, or do not provide us with the most current version of such software, we may be required to seek comparable software from other sources, which may be more expensive or inferior, or may not be available at all, any of which would adversely affect our business.

Our business depends upon the interoperability of our platform across devices, operating systems, and third-party applications that we do not control.

One of the most important features of our platform is its broad interoperability with a range of devices, operating systems, and third-party applications. Our platform is accessible from the web and from devices running various operating systems such as iOS and Android. We depend on the accessibility of our platform across these third-party operating systems and applications that we do not control. Moreover, third-party services and offerings are constantly evolving, and we may not be able to modify our platform to assure its compatibility with that of other third parties following development changes. The loss of interoperability, whether due to actions of third parties or otherwise, could adversely affect our business.

We rely on third parties for elements of the payment processing infrastructure underlying our platform. If these third-party elements become unavailable or unavailable on favorable terms, our business could be adversely affected.

The convenient payment mechanisms provided by our platform are key factors contributing to the development of our business. We rely on third parties for elements of our payment-processing infrastructure to remit payments to drivers using our platform, and these third parties may refuse to renew our agreements with them on commercially reasonable terms or at all. If these companies become unwilling or unable to provide these services to us on acceptable terms or at all, our business may be disrupted. For certain payment methods, including credit and debit cards, we generally pay interchange fees and other processing and gateway fees, and such fees result in significant costs. In addition, online payment providers are under continued pressure to pay increased fees to banks to process funds, and there is no assurance that such online payment providers will not pass any increased costs on to merchant partners, including us. If these fees increase over time, our operating costs will increase, which could adversely affect our business, financial condition, and operating results.

Future failures of the payment processing infrastructure underlying our platform could cause drivers to lose trust in our payment operations and could cause them to instead use our competitors’ platforms. If the quality or convenience of our payment processing infrastructure declines as a result of these limitations or for any other reason, the attractiveness of our business to drivers and riders could be adversely affected. If we are forced to migrate to other third-party payment service providers for any reason, the transition would require significant time and management resources, and may not be as effective, efficient, or well-received by platform users.

We currently rely on a small number of third-party service providers to host a significant portion of our platform, and any interruptions or delays in services from these third parties could impair the delivery of our services and offerings and harm our business.

We use third-party cloud computing services in the United States and abroad. We do not control the operations of our third-party service providers. These third-party operations may experience break-ins, computer viruses, denial-of-service attacks, sabotage, acts of vandalism, and other misconduct. These facilities may also be vulnerable to damage or interruption from power loss, telecommunications failures, fires, floods, earthquakes, hurricanes, tornadoes, and similar events. Our systems do not provide complete redundancy of data storage or processing, and as a result, the occurrence of any such event, a decision by our third-party service providers to close our co-located data centers without adequate notice, or other unanticipated problems may result in our inability to serve data reliably or require us to migrate our data to a new cloud computing service. This could be time consuming and costly and may result in the loss of data, any of which could significantly interrupt the provision of our services and offerings and harm our reputation and brand. We may not be able to easily switch to another cloud provider in the event of any disruptions or interference to the services we use, and even if we do, other cloud providers are subject to the same risks. Interruptions in the delivery of our services and offerings may reduce our revenue, cause drivers to stop offering their services through our platform, and reduce use of our platform by riders. Our business and operating results may be harmed if current and potential drivers or riders believe our platform is unreliable. In addition, if we are unable to scale our data storage and computational capacity sufficiently or on commercially reasonable terms, our ability to innovate and introduce new services on our platform may be delayed or compromised, which would have an adverse effect on our growth and business.

We rely on third-party insurance policies to insure and reinsure our auto-related and operations-related risks. If our insurance or reinsurance coverage is insufficient for the needs of our business or our insurance providers are unable to meet their obligations, we may not be able to mitigate the risks facing our business, which could adversely affect our business, financial condition and results of operations.

We, through deductibles, often bear significant financial risk with respect to auto-related incidents, including auto liability, uninsured and underinsured motorist, auto physical damage, first party injury coverages including personal injury protection under state law and general business liabilities up to certain limits. To comply with applicable United States insurance regulatory requirements for auto-related risks, we procure a number of third-party insurance policies which provide the required coverage in such jurisdictions. If we fail to comply with state insurance regulatory requirements or other regulations governing insurance coverage, our business, financial condition and results of operations could be adversely affected. If any of our third-party insurance providers or administrators who handle the claim on behalf of the third-party insurance providers become insolvent, they could be unable to pay any operations-related claims that we make. In addition, we rely on a limited number of third-party insurance service providers to service our auto-related claims. If any of our third-party insurance service providers fails to service claims to our expectations, discontinues or increases the cost of coverage or changes the terms of such coverage in a manner not favorable to our drivers or to us, we cannot guarantee that we would be able to secure replacement coverage or services on reasonable terms in an acceptable time frame or at all. If we cannot find alternate third-party insurance service providers on terms acceptable to us, we may incur additional expenses related to servicing such auto-related claims using internal resources.

We also procure third-party insurance policies to cover various operations-related risks including employment practices liability, workers’ compensation, business interruptions, cybersecurity and data breaches, crime, directors’ and officers’ liability and general business liabilities, including product liability. We may not obtain enough insurance to adequately mitigate such operations-related risks, and we may have to pay high premiums, self-insured retentions or deductibles for the coverage we do obtain. Additionally, if any of our insurance or reinsurance providers becomes insolvent, each may be unable to pay any operations-related claims that we make. Certain losses may be excluded from insurance coverage including, but not limited to losses caused by intentional act, pollution, contamination, virus, bacteria, terrorism, war and civil unrest.

The amount of one or more auto-related claims or operations-related claims could exceed our applicable aggregate coverage limits, for which we have borne and could continue to bear the excess, in addition to amounts already incurred in connection with deductibles or self-insured retentions. Insurance providers have raised premiums and deductibles for many types of claims, coverages and for a variety of commercial risks and are likely to do so in the future. As a result, our insurance and claims expense could increase, or we may decide to raise our deductibles or self-insured retentions when our policies are renewed or replaced to manage pricing pressure. Our business, financial condition and results of operations could be adversely affected if (i) cost per claim, premiums or the number of claims significantly exceeds our historical experience (ii) we experience a claim in excess of our coverage limits, (iii) our insurance providers fail to pay on our insurance claims, (iv) we experience a claim for which coverage is not provided, (v) the number of claims and average claim cost under our deductibles or self-insured retentions differs from historic averages or (vi) an insurance policy is cancelled or non-renewed.

We establish insurance reserves for claims incurred but not yet paid and claims incurred but not yet reported and any related estimable expenses, and we periodically evaluate and, as necessary, adjust our actuarial assumptions and insurance reserves as our experience develops or new information is learned. We employ various predictive modeling and actuarial techniques and make numerous assumptions based on limited historical experience and industry statistics to estimate our insurance reserves. Estimating the number and severity of claims, as well as related judgment or settlement amounts, is inherently difficult, subjective and speculative. As a result, our actual losses for claims and related expenses may deviate, individually or in the aggregate, from the insurance reserves reflected in our consolidated financial statements. If we determine that our estimated insurance reserves are inadequate, we may be required to increase such reserves at the time of the determination, which could negatively impact our financial condition and results of operations.

General Risks

Our business could be adversely affected by natural disasters, public health crises, political crises, economic downturns or other unexpected events.

A significant natural disaster, such as an earthquake, fire, hurricane, tornado, flood or significant power outage, could disrupt our operations, mobile networks, the Internet or the operations of our third-party technology providers. The impact of climate change may increase these risks. In addition, any public health crises, such as the COVID-19 pandemic, other epidemics, political crises, such as terrorist attacks, war and other political or social instability and other geopolitical developments, or other catastrophic events, whether in the United States or abroad, could adversely affect our operations or the economy as a whole. The impact of any natural disaster, act of terrorism or other disruption to us or our third-party providers’ abilities could result in decreased demand for our offerings or a delay in the provision of our offerings, which could adversely affect our business, financial condition and results of operations. All the aforementioned risks may be further increased if our disaster recovery plans prove to be inadequate.

Worsening of the COVID-19 pandemic could have an adverse impact on our business and operations.

In March 2020, the World Health Organization declared the outbreak of the COVID-19 pandemic. In an attempt to limit the spread of the virus, various governments around the world implemented travel restrictions, business restrictions, school closures, limitations on social or public gatherings, and other measures. Most of these restrictions and other measures have been lifted in the United States, and the economic effect of the pandemic has mostly subsided. However, COVID-19 has not been eliminated entirely, and the effect of COVID-19 has evolved.

The COVID-19 pandemic has previously affected our near-term financial results and may adversely impact our long-term financial results, which has required and may continue to require significant actions in response, including but not limited to, additional reductions in workforce and certain changes to pricing models of our offerings, all in an effort to mitigate such impacts. In light of the evolving nature of COVID-19 and the uncertainty it has produced around the world, we do not believe it is possible to predict with precision the pandemic’s cumulative and ultimate impact on our future business operations, liquidity, financial condition, and results of operations. The extent of the impact of the pandemic on our business and financial results will depend largely on future developments, including the duration of the spread of the outbreak and any future “waves” or resurgences of the outbreak or variants of the virus, both globally and within the United States, the administration, adoption and efficacy of vaccines in the United States and internationally, the impact on capital and financial markets, the impact on global supply chains, foreign currencies exchange, governmental or regulatory orders that impact our business and whether the impacts may result in permanent changes to our end-users’ behaviors, all of which are highly uncertain and cannot be predicted.

The impact of economic conditions, including the resulting effect on discretionary rider spending, may harm our business and operating results.

Our performance is subject to economic conditions and their impact on levels of discretionary rider spending. Some of the factors that have an impact on discretionary rider spending include general economic conditions, unemployment, consumer debt, reductions in net worth, residential real estate and mortgage markets, taxation, energy prices, interest rates, consumer confidence, and other macroeconomic factors. Consumer preferences tend to shift to lower-cost alternatives during recessionary periods and other periods in which disposable income is adversely affected. In such circumstances, consumers may choose to forgo our offerings for lower-cost personal vehicle or public transportation alternatives, or may reduce total miles traveled as economic activity decreases. Such a shift in consumer behavior may reduce our network demand and may harm our business, financial condition, and operating results. Alternatively, if economic conditions improve, it could lead to drivers obtaining additional or alternative opportunities for work, which could negatively impact the number of drivers on our platform, and thereby reduce our network size.

Increases in fuel, food, labor, energy, and other costs due to inflation and other factors could adversely affect our operating results.

Factors such as inflation, increased fuel and energy prices, and increased vehicle purchase or maintenance costs, including increased prices of new and used vehicle parts as a result of recent global supply chain challenges, and increased labor and employee benefit costs may increase operating costs for us and our drivers. Many of the factors affecting these costs are beyond the control of us and our drivers. In many cases, these increased costs may cause drivers to leave our platform or to seek alternative sources of income. A decreased supply of drivers or riders on our platform would decrease our network supply, which could harm our business and operating results.

Risks Related to WHC’s Business Following the Business Combination 

Changes in U.S. tax legislation may adversely affect our financial condition, operating results, and cash flows.

We are a U.S.-based company subject to tax in multiple U.S. tax jurisdictions. U.S. tax legislation enacted in 2017 (modified in 2020) and 2022, has significantly changed the U.S. federal income taxation of U.S. corporations. The legislation and regulations promulgated in connection therewith remain unclear in many respects and could be subject to potential amendments and technical corrections, as well as interpretations and incremental implementing regulations by the U.S. Treasury and U.S. Internal Revenue Service (the “IRS”), any of which could lessen or increase certain adverse impacts of the legislation. In addition, it remains unclear in some instances how these U.S. federal income tax changes will affect state and local taxation, which often uses federal taxable income as a starting point for computing state and local tax liabilities.

We are unable to predict what U.S. tax reforms may be proposed or enacted in the future or what effects such future changes would have on our business. Any such changes in tax legislation, regulations, policies or practices in the jurisdictions in which we operate could increase the estimated tax liability that we have expensed to date and paid or accrued on our balance sheet; affect our financial position, future operating results, cash flows, and effective tax rates where we have operations; reduce post-tax returns to our equity holders; and increase the complexity, burden, and cost of tax compliance. We are subject to potential changes in relevant tax, accounting, and other laws, regulations, and interpretations, including changes to tax laws applicable to corporate multinationals. The governments of countries in which we operate and other governmental bodies could make unprecedented assertions about how taxation is determined in their jurisdictions that are contrary to the way in which we have interpreted and historically applied the rules and regulations described above in our income tax returns filed in such jurisdictions. New laws could significantly increase our tax obligations in the countries in which we do business or require us to change the manner in which we operate our business. Many of these changes to the taxation of our activities could increase our worldwide effective tax rate and harm our financial position, operating results, and cash flows.

We may require additional capital to support the growth of our business, and this capital might not be available on reasonable terms or at all.

To continue to effectively compete, we may require additional funds to support the growth of our business and allow us to invest in new services, offerings, and markets. If we raise additional funds through further issuances of equity or convertible debt securities, our existing equity holders may suffer significant dilution, and any new equity securities we issue may have rights, preferences, and privileges superior to those of existing equity holders. Any debt financing we secure in the future could contain restrictive covenants relating to our ability to incur additional indebtedness and other financial and operational matters that make it more difficult for us to obtain additional capital with which to pursue business opportunities. We may not be able to obtain additional financing on favorable terms, if at all. If we are unable to obtain adequate financing or financing on terms satisfactory to us when required, our ability to continue to support our business growth and to respond to business challenges and competition may be significantly limited.

Risks Related to Ownership of New WHC’s Class A Common Stock 

An active trading market for New WHC Class A Common Stock may never develop or be sustained.

We cannot assure you that an active trading market for New WHC Class A Common Stock will develop on the NYSE or elsewhere. If an active trading market does not develop, or develops but is not maintained, you may have difficulty selling any shares of New WHC Class A Common Stock due to the limited public float. Accordingly, we cannot assure you of your ability to sell your shares of New WHC Class A Common Stock when desired, or as to the prices that you may obtain for your shares.

Upon consummation of the Business Combination, the market price of New WHC Class A Common Stock may be volatile, which could result in substantial losses for investors.

Upon consummation of the Business Combination, the price of New WHC Class A Common Stock may fluctuate due to a variety of factors, including:

In addition, the stock markets have experienced extreme price and volume fluctuations that have affected and continue to affect the market prices of equity securities of many companies. These fluctuations have often been unrelated or disproportionate to the operating performance of those companies. Broad market and industry factors, as well as general economic, political, regulatory and market conditions, may negatively affect the market price of the New WHC Class A Common Stock, regardless of New WHC’s actual operating performance. 

Reports published by analysts, including projections in those reports that differ from New WHC’s actual results, could adversely affect the price and trading volume of its common stock.

Securities research analysts may establish and publish their own periodic projections for New WHC following consummation of the Business Combination. These projections may vary widely and may not accurately predict the results we actually achieve. The share price of New WHC Class A Common Stock may decline if New WHC’s actual results do not match the projections of these securities research analysts. Similarly, if one or more of the analysts who write reports on New WHC downgrades its stock or publishes inaccurate or unfavorable research about its business, the share price of New WHC Class A Common Stock could decline. If one or more of these analysts ceases coverage of New WHC or fails to publish reports on it regularly, the share price or trading volume of New WHC Class A Common Stock could decline. While New WHC expects research analyst coverage following consummation of the Business Combination, if no analysts commence coverage of New WHC, the market price and volume for New WHC’s Class A Common Stock could be adversely affected.

A significant portion of New WHC’s total outstanding shares will be restricted from immediate resale upon the Closing but may be sold into the market in the near future. This could cause the market price of New WHC Class A Common Stock to drop significantly, even if New WHC’s business is doing well.

Sales of a substantial number of shares of New WHC Class A Common Stock in the public market could occur at any time. These sales, or the perception in the market that the holders of a large number of shares intend to sell shares, could reduce the market price of New WHC Class A Common Stock.

It is anticipated that, upon completion of the Business Combination, (i) Spree’s Sponsor will own approximately 13.8% of the outstanding New WHC Class A Common Stock, and (ii) the current members of WHC will own 39.7% of the outstanding New WHC Class A Common Stock, on an as-converted basis, through its ownership of Units and New WHC Class X Common Stock, in each case, assuming that none of Spree’s outstanding public shares are redeemed in connection with the Business Combination, or approximately 19.7% and 56.0%, respectively, assuming that the maximum number of Spree’s outstanding public shares are redeemed in connection with the Business Combination while still enabling the Minimum Cash Condition to be met. These percentages assume that 25,945,715 shares of New WHC Class A Common Stock are issued to the holders of ordinary shares of Spree in respect of their existing Spree shares at Closing. In addition, these percentages take into account any shares of New WHC Class A Common Stock that may be issued in a PIPE Financing, if consummated. Based on these assumptions, and assuming that none of Spree’s outstanding public shares are redeemed in connection with the Business Combination, there would be approximately 20,945,715 shares of New WHC Class A Common Stock and 17,094,661 shares of New WHC Class X Common Stock outstanding immediately following the consummation of the Business Combination. If the actual facts are different than these assumptions, the ownership percentages in New WHC will be different.

Pursuant to the Investor Rights Agreement, after the consummation of the Business Combination and subject to certain exceptions, Spree’s Sponsor and the WHC members will be restricted from selling or transferring any shares of New WHC Class A Common Stock. However, these shares may be sold after the expiration of the applicable lock-up under the Investor Rights Agreement. Pursuant to the Investor Rights Agreement and the Subscription Agreements, New WHC will be required to file one or more registration statements shortly after the Closing to provide for the resale of shares issued in the PIPE Financing, if any, and the shares of New WHC Class A Common Stock held by the parties to the Investor Rights Agreement. Upon effectiveness of such registration statement(s), subject to the satisfaction of applicable vesting restrictions and the expiration or waiver of the market standoff agreements and the lock-up set forth in the Investor Rights Agreement, the shares issued upon exercise of outstanding stock options, restricted stock unit awards, and warrants or the vesting of other equity awards granted under such plans will be available for immediate resale in the public market. As restrictions on resale end and the registration statements are available for use, the market price of New WHC Class A Common Stock could decline if the holders of currently restricted shares sell them or are perceived by the market as intending to sell them.

New WHC does not expect to pay any dividends for the foreseeable future. Investors may never obtain a return on their investment.

You should not rely on an investment in New WHC Class A Common Stock to provide dividend income. New WHC does not anticipate that it will pay any dividends to holders of its common stock in the foreseeable future. Instead, New WHC plans to retain any earnings to maintain and expand its existing operations, services, and continue to invest in its commercial infrastructure. In addition, any future credit facility or financing New WHC obtains may contain terms prohibiting or limiting the amount of dividends that may be declared or paid on New WHC Class A Common Stock. Accordingly, investors must rely on sales of their common stock after price appreciation, which may never occur, as the only way to realize any return on their investment. As a result, investors seeking cash dividends should not purchase New WHC Class A Common Stock.

The Proposed Certificate of Incorporation designates the Court of Chancery of the State of Delaware (or, if the Court of Chancery of the State of Delaware does not have jurisdiction, another state court in Delaware or the federal district court for the District of Delaware) as the exclusive forum for substantially all disputes between New WHC and its stockholders, and also provides that the federal district courts of the United States will be the exclusive forum for resolving any complaint asserting a cause of action arising under the Securities Act, each of which could limit New WHC’s stockholders’ ability to choose the judicial forum for disputes with New WHC or its directors, officers, stockholders, or employees.

The Proposed Certificate of Incorporation provides that, unless New WHC consents in writing to the selection of an alternative forum (an “Alternative Forum Consent”), the Court of Chancery of the State of Delaware will be the sole and exclusive forum for (i) any derivative action or proceeding brought on behalf of New WHC, (ii) any action asserting a claim of breach of a duty (including any fiduciary duty) owed by any current or former director, officer, stockholder, employee or agent of New WHC to New WHC or New WHC’s stockholders, (iii) any action asserting a claim against New WHC or any current or former director, officer, stockholder, employee or agent of New WHC arising out of or relating to any provision of the DGCL, the Proposed Certificate of Incorporation or the Proposed By-Laws (each, as in effect from time to time), or (iv) any action asserting a claim against New WHC or any current or former director, officer, stockholder, employee or agent of New WHC governed by the internal affairs doctrine of the State of Delaware; provided, however, that, in the event that the Court of Chancery of the State of Delaware lacks subject matter jurisdiction over any such action or proceeding, the sole and exclusive forum for such action or proceeding will be another state or federal court located within the State of Delaware, in each such case, unless the Court of Chancery (or such other state or federal court located within the State of Delaware, as applicable) has dismissed a prior action by the same plaintiff asserting the same claims because such court lacked personal jurisdiction over an indispensable party named as a defendant therein. Unless New WHC gives an Alternative Forum Consent, the federal district courts of the United States will, to the fullest extent permitted by law, be the sole and exclusive forum for resolving any action asserting a claim arising under the Securities Act.

Section 22 of the Securities Act creates concurrent jurisdiction for federal and state courts over all such Securities Act actions. Accordingly, both state and federal courts have jurisdiction to entertain such claims. To prevent having to litigate claims in multiple jurisdictions and the threat of inconsistent or contrary rulings by different courts, among other considerations, the Proposed Certificate of Incorporation provides that, unless New WHC consents in writing to the selection of an alternative forum, the federal district courts of the United States of America will be the exclusive forum for resolving any complaint asserting a cause of action arising under the Securities Act.

Any person or entity purchasing or otherwise acquiring or holding or owning (or continuing to hold or own) any interest in any of New WHC’s securities shall be deemed to have notice of and consented to the foregoing provisions. Although New WHC believes these exclusive forum provisions benefit it by providing increased consistency in the application of Delaware law and federal securities laws in the types of lawsuits to which each applies, the exclusive forum provisions may limit a stockholder’s ability to bring a claim in a judicial forum of its choosing for disputes with New WHC or any of its directors, officers, stockholders, or other employees, which may discourage lawsuits with respect to such claims against New WHC and its current and former directors, officers, stockholders, or other employees. In addition, a stockholder that is unable to bring a claim in the judicial forum of its choosing may be required to incur additional costs in the pursuit of actions which are subject to the exclusive forum provisions described above. New WHC’s stockholders will not be deemed to have waived New WHC’s compliance with the federal securities laws and the rules and regulations thereunder as a result of New WHC’s exclusive forum provisions. Further, in the event a court finds the exclusive forum provision contained in the Proposed Certificate of Incorporation to be unenforceable or inapplicable in an action, New WHC may incur additional costs associated with resolving such action in other jurisdictions, which could harm its results of operations.

Provisions in New WHC’s Proposed Governing Documents that will be in effect as of the Closing might discourage, delay or prevent a change in control of New WHC or changes in its management and, therefore, depress the trading price of New WHC Class A Common Stock.

Certain provisions of the Proposed Certificate of Incorporation may discourage, delay or prevent a change in control of New WHC, including the following:

These anti-takeover defenses could discourage, delay, or prevent a transaction involving a change in control of New WHC. These provisions could also discourage proxy contests and make it more difficult for stockholders to elect directors of their choosing and to cause us to take other corporate actions they desire, any of which, under certain circumstances, could limit the opportunity for New WHC’s stockholders to receive a premium for their shares of New WHC’s capital stock.

We expect New WHC to qualify as an “emerging growth company” and a “smaller reporting company” within the meaning of the Securities Act, as of the closing of the Business Combination, and if it takes advantage of certain exemptions from disclosure requirements available to emerging growth companies or smaller reporting companies, this could make New WHC’s securities less attractive to investors and may make it more difficult to compare New WHC’s performance with other public companies.

Spree currently is, and following the Business Combination, it is expected that New WHC will be, an “emerging growth company” as defined in Section 2(a)(19) of the Securities Act. As such, following the closing of the Business Combination, New WHC will be eligible for, and intends to take advantage of, certain exemptions from various reporting requirements applicable to other public companies that are not emerging growth companies for as long as it continues to be an emerging growth company. These exemptions include not being required to comply with the auditor attestation requirements of Section 404 of SOX, not being required to comply with any requirement that may be adopted by the Public Company Accounting Oversight Board regarding mandatory audit firm rotation or a supplement to the auditor’s report providing additional information about the audit and the financial statements, reduced disclosure obligations regarding executive compensation and exemptions from the requirements of holding a nonbinding advisory vote on executive compensation and stockholder approval of any golden parachute payments not previously approved. As a result, the information New WHC provides stockholders will be different than the information that is available with respect to other public companies that are not emerging growth companies. In this proxy statement/prospectus, not all of the executive compensation related information that would be required if SPREE was not an emerging growth company has been included.

Additionally, we expect New WHC to qualify as a “smaller reporting company” as defined in Item 10(f)(1) of Regulation S-K and Rule 12b-2 under the Securities Exchange Act of 1934. Smaller reporting companies may take advantage of certain reduced disclosure obligations, including, among other things, providing only two years of audited financial statements. We expect New WHC to remain a smaller reporting company until the last day of the fiscal year in which (i) the market value of New WHC Class A Common Stock held by non-affiliates exceeds $250 million as of the prior June 30, or (ii) its annual revenues exceeded $100 million during such completed fiscal year and the market value of New WHC Class A Common Stock held by non-affiliates exceeds $700 million as of the prior June 30. To the extent that New WHC continues to qualify as a “smaller reporting company” after New WHC ceases to qualify as an emerging growth company, New WHC will continue to be permitted to make certain reduced disclosures in New WHC’s periodic reports and other documents that it files with the SEC. New WHC cannot predict whether investors will find its common stock less attractive if it relies on these exemptions. If some investors find New WHC Class A Common Stock less attractive as a result, there may be a less active trading market for New WHC Class A Common Stock and its stock price may be more volatile.

In addition, the JOBS Act provides that an emerging growth company can take advantage of an extended transition period for complying with new or revised accounting standards. This allows an emerging growth company to delay the adoption of certain accounting standards until those standards would otherwise apply to private companies. New WHC has elected to avail itself of this exemption from new or revised accounting standards and, therefore, it will not be subject to the same new or revised accounting standards as other public companies that are not emerging growth companies. As a result, New WHC’s financial statements may not be comparable to companies that comply with new or revised accounting pronouncements as of public company effective dates.

We have identified material weaknesses in our internal control over financial reporting, and we may identify additional material weaknesses in the future or fail to maintain effective internal control over financial reporting. If we are unable to maintain an effective system of internal controls in the future, our ability to accurately or timely report our financial condition or results of operations may be adversely affected, which could hurt our business, lessen investor confidence and depress the market price of our securities.

A company’s internal control over financial reporting is a process designed by, or under the supervision of, a company’s principal executive and principal financial officers, or persons performing similar functions, and effected by a company’s board of directors, management and other personnel to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements in accordance with U.S. GAAP. 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 the annual or interim

financial statements will not be prevented or detected on a timely basis.

As an emerging growth company, we are in the process of developing our internal processes and procedures to accommodate our rapid growth in recent years. As of December 31, 2021, our finance and accounting employees have focused primarily on bookkeeping and operational accounting processes and procedures. We rely primarily on third-party accounting professional service firms to provide technical accounting services. Our independent registered public accounting firm has not conducted an audit of our internal control over financial reporting. However, in connection with the preparation of our consolidated financial statements for the years ended December 31, 2020 and 2021, we identified material weaknesses in our internal control over financial

reporting.

The material weaknesses identified are related to not maintaining proper segregation of duties related to the posting of manual journal entries to the general ledger and not designing and maintaining effective controls over the identification and recognition of non-routine, unusual or complex transactions.

The identified control deficiencies did not result in a material misstatement to our financial statements. However, each of these control deficiencies could result in a misstatement of our accounts or disclosures that would result in a material misstatement of our annual or interim financial statements that would not be prevented or timely detected, and accordingly, we determined that these control deficiencies constitute material weaknesses.

We are progressing with the activities necessary to implement the appropriate accounting policies, processes and controls required to comply with Section 404 of the Sarbanes-Oxley Act. In order to remediate these material weaknesses, we have taken and plan to take the following actions:

We will not be able to fully remediate these control deficiencies until these steps have been completed, have been operating effectively for a sufficient period of time and management has concluded, through testing, that these controls are effective. We and our independent registered public accounting firm were not required to, and did not, perform an evaluation of our internal control over financial reporting as of December 31, 2021 or any period in accordance with the provisions of the Sarbanes-Oxley Act. Accordingly, we cannot assure you 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 after the completion of the Business Combination.

We cannot provide assurance that the measures we have taken to date, and actions we may take in the future, will be sufficient to remediate the control deficiencies that led to these material weaknesses in our internal control over financial reporting nor that they will prevent or avoid potential future material weaknesses If not remediated, these material weaknesses could result in further material misstatements to our annual or interim consolidated financial statements that might not be prevented or detected on a timely basis, or in delayed filing of required periodic reports. If we are unable to assert that our internal control over financial reporting is effective, or when required in the future after the completion of this Business Combination, investors may lose confidence in the accuracy and completeness of our financial reports, the market price of our common stock could be adversely affected and we could become subject to litigation or investigations by the NYSE, the SEC, or other regulatory authorities, which could require additional financial and management resources.

Risks Related to the Business Combination and Spree 

The process of taking a company public by means of a business combination with a special purpose acquisition company is different from taking a company public through an underwritten offering and may create risks for our unaffiliated investors.

An underwritten offering involves a company engaging underwriters to purchase its shares and resell them to the public. An underwritten offering imposes statutory liability on the underwriters for material misstatements or omissions contained in the registration statement unless they are able to sustain the burden of providing that they did not know and could not reasonably have discovered such material misstatements or omissions. This is referred to as a “due diligence” defense and results in the underwriters undertaking a detailed review of the company’s business, financial condition and results of operations. Going public via a business combination with a special purpose acquisition company (“SPAC”) does not involve any underwriters and does not generally necessitate the level of review required to establish a “due diligence” defense as would be customary on an underwritten offering.

In addition, going public via a business combination with a SPAC does not involve a book-building process as is the case in an underwritten public offering. In any underwritten public offering, the initial value of a company is set by investors who indicate the price at which they are prepared to purchase shares from the underwriters. In the case of a SPAC transaction, the value of the company is established by means of negotiations between the target company, the SPAC and, in some cases, “PIPE” investors who agree to purchase shares at the time of the business combination. The process of establishing the value of a company in a SPAC business combination may be less effective than the book building process in an underwritten public offering and also does not reflect events that may have occurred between the date of the business combination agreement and the closing of the transaction. In addition, underwritten public offerings are frequently oversubscribed resulting in additional potential demand for shares in the aftermarket following the underwritten public offering. There is no such book of demand built up in connection with a SPAC transaction and no underwriters with the responsibility of stabilizing the share price that may result in the share price being harder to sustain after the transaction.

Our Sponsor and the other Insiders have entered into letter agreements with us to vote in favor of the Business Combination, regardless of how our public shareholders vote.

Unlike some other blank check companies in which the initial shareholders agree to vote their shares in accordance with the majority of the votes cast by the public shareholders in connection with an initial business combination, our Sponsor and each other Insider, pursuant to the Voting Agreement, the details and terms of which are further described below in this proxy statement/prospectus, have agreed, among other things, (1) to vote all of their public shares, Class B ordinary shares and the Class A ordinary shares contained in their private units in favor of all the proposals being presented at the extraordinary general meeting, including the Business Combination Proposal and the transactions contemplated thereby, and (2) from the date of the Business Combination Agreement until the earlier of the Closing or the termination of the Business Combination Agreement in accordance with its terms, to not redeem any public shares (or, if applicable, Class B ordinary shares) held by each. No consideration was provided to the Sponsor in exchange for its agreeing to vote in favor of the Business Combination. As of the date of this proxy statement/prospectus, our Sponsor owns approximately 22.9% of the issued and outstanding ordinary shares. None of the proposals at the extraordinary general meeting is conditioned on the approval by the holders of a majority of the Spree Class A ordinary shares held by shareholders other than the Sponsor or its affiliates.

Neither the Spree Board nor any committee thereof obtained a third-party valuation in determining whether or not to pursue the Business Combination.

Neither the Spree Board nor any committee thereof is required to obtain an opinion from an independent investment banking or accounting firm that the price that Spree is paying for WHC is fair to Spree from a financial point of view. Neither the Spree Board nor any committee thereof obtained a third-party valuation in connection with the Business Combination. In analyzing the Business Combination, the Spree Board and management conducted due diligence on WHC and researched the industry in which WHC operates. The Spree Board reviewed, among other things, financial due diligence materials prepared by professional advisors, including quality of earnings reports and tax due diligence reports, financial and market data information on selected comparable companies, the implied purchase price multiple of WHC and the financial terms set forth in the Business Combination Agreement, and concluded that the Business Combination was in the best interest of Spree’s shareholders. Accordingly, investors will be relying solely on the judgment of the Spree Board and management in valuing WHC, and the Spree Board and management may not have properly valued WHC’s business. The lack of a third-party valuation may also lead an increased number of shareholders to vote against the Business Combination or demand redemption of their shares, which could potentially impact our ability to consummate the Business Combination.

Spree has not obtained a fairness opinion from an independent investment banking firm, and consequently, there is no assurance from an independent source that the Business Combination is fair to its shareholders from a financial point of view.