Latch, Inc.

Following the Property Management Acquisitions, in July 2024 we began a month-to-month office lease for our property management team in Boston, Massachusetts.

We believe that our headquarters and current facilities enable better support for our customers and improve operational discipline and efficiency. We believe that suitable additional space will be available to accommodate any expansion of our operations as needed. Other than our St. Louis-based employees and our property management team, our workforce generally operates on a remote basis, which we believe is suitable for the conduct of our business.

Historical Properties

Between November 2023 and January 2025, we leased approximately 2,000 square feet of office space in Los Angeles, California. During 2023, we were also party to a lease for approximately 9,600 square feet of office and warehouse space in Denver, Colorado that expired in November 2024. We ceased using the Denver property in November 2023.

Along with our U.S. facilities, we leased a small office space in Taipei, Taiwan until July 2025. From September 2024 to January 2025, we also leased office space in Argentina. As a result of the HelloTech Merger, we were subject to a month-to-month office lease in Cebu City, Philippines, from July 2024 to September 2025.

• Our growth and the quickly changing markets in which we operate make it difficult to evaluate our current business and future prospects, which may increase the risk of investing in our common stock.
• The loss of a significant customer may have a material adverse effect on us.
• We engage some individuals classified as independent contractors, not employees, and if U.S. or international regulatory authorities mandate that they be classified as employees, our business would be adversely impacted.
• We rely on third-party background check providers to screen potential and existing HelloTech technicians, and if such providers fail to provide accurate information, or if providers are unable to complete background checks because of data access restrictions, court closures or other unforeseen government shutdowns, or if we do not maintain business relationships with them, our business, financial condition and results of operations could be adversely affected.
• Any failure to offer high-quality support of our HelloTech platform may harm our relationships with merchants, consumers, and technicians and could adversely affect our business, financial condition and results of operations.
• If HelloTech platform users engage in, or are subject to, criminal, violent, inappropriate or dangerous activity that results in safety incidents, our ability to attract and retain technicians, consumers and merchants may be harmed, which could have an adverse impact on our reputation, business, financial condition and operating results.
• The success of our HelloTech platform depends, in substantial part, on our ability to establish and maintain relationships with quality and trustworthy service professionals.
• Our future operating results will rely in part upon the successful execution of our strategic partnerships, which may not be successful. If these companies choose not to partner with us, our business and results of operations may be harmed.
• If our security controls are breached, or unauthorized or inadvertent access to user information or other data or to control or view systems are otherwise obtained, our products, software or services may be perceived as insecure, our business may be harmed and we may incur significant liabilities.
• Direct selling may subject us to additional risks.
• We may be unable to attract new customers and maintain customer satisfaction with current customers, which could have an adverse effect on our business and rate of growth.
• We rely on certain third-party providers of licensed software and services that are important to the operation of our business.
• We rely on our channel partner network to sell and deploy our products, and the inability of our channel partners to effectively perform to our standards, or the loss of key channel partners, could adversely affect our operating results.
• Potential customer turnover, or costs we incur to retain and upsell our customers, could materially and adversely affect our financial performance.
• If we are unable to develop new solutions, adapt to technological change, sell our software, services and products into new markets or further penetrate our existing markets, our revenue may not grow as expected.
• We operate in the emerging and evolving smart building technology industry, which may develop more slowly or differently than we expect. If the smart building technology industry does not grow as we expect, or if we cannot expand our platforms and solutions to meet the demands of this market, our revenue may decline, fail to grow or fail to grow at an accelerated rate, and we may incur operating losses.
• The markets in which we participate could become more competitive, and many companies, including large technology companies, point solution providers such as traditional lock companies and other managed service providers, may target the markets in which we do business, including the smart building technology industry. If we are unable to compete effectively with these potential competitors, our sales and profitability could be adversely affected.
• We may expand through acquisitions of, or investments in, other companies, each of which may divert our management’s attention, result in additional dilution to our stockholders, increase expenses, disrupt our operations and harm our results of operations.
• New lines of business or new products and services may subject us to additional risks.
• Claims from riders, drivers, residents, guests or third parties that allege harm, whether or not our products or services are in use, could adversely affect our business, brand, financial condition and results of operations.
• If we determine that our goodwill has become further impaired, we may incur additional impairment charges, which would negatively impact our operating results.
• Changes in effective tax rates or tax laws, or adverse outcomes resulting from examination of our income or other tax returns, could adversely affect our results of operations and financial condition.
• We may be unable to use some or all of our net operating loss carryforwards, which could materially and adversely affect our reported financial condition and results of operations.
• A 1% U.S. federal excise tax could be imposed on us in connection with any redemptions we undertake.
• We may require additional capital to pursue our business objectives and to respond to business opportunities, challenges or unforeseen circumstances. If capital is not available to us, our business, results of operations and financial condition may be adversely affected.
• If we are unable to acquire intellectual property or adequately protect intellectual property, we could be competitively disadvantaged.
• Accusations of infringement of third-party intellectual property rights could materially and adversely affect our business.
• Some of our products and services contain open source software, which may pose particular risks to our proprietary software, technologies, products and services in a manner that could harm our business.
• Our products and services may be affected from time to time by design and manufacturing defects that could adversely affect our business and result in harm to our reputation.
• Our new software, services and products may not be successful.
• If we fail to continue to develop our brands or marketing efforts designed to drive traffic to our brands are unsuccessful, our business may suffer.
• Our applications run on mobile operating systems, networks and devices that we do not control.
• We must successfully upgrade and maintain our information technology systems.
• Potential problems with our information systems, third-party systems and infrastructure upon which we rely could interfere with our business and operations.
• We collect, store, process and use personal information, which subjects us to legal obligations and laws and regulations related to security and privacy, and any actual or perceived failure to meet those obligations could harm our business.
• We rely on a limited number of suppliers, manufacturers and logistics partners for our products. A loss of any of these partners could negatively affect our business.
• We have limited control over our suppliers, manufacturers and logistics partners, which subjects us to significant risks, including the potential inability to produce or obtain quality products and services on a timely basis or in sufficient quantity.
• Increases in component costs, long lead times, supply shortages and changes, labor shortages and construction delays could disrupt our supply chain and operations and have an adverse effect on our business, financial condition and operating results.
• Regulations related to “conflict minerals” require us to incur additional expenses and could limit the supply and increase the cost of certain metals used in manufacturing our products.
• Our operating results could be adversely affected if we are unable to accurately forecast customer demand for our products and services and adequately manage our inventory.
• From time to time, we may be subject to legal proceedings, regulatory disputes and governmental inquiries that could cause us to incur significant expenses, divert our management’s attention and materially harm our business, financial condition and operating results.
• Our smart building technology is subject to varying state and local regulations, which are updated from time to time.
• We may fail to comply with import and export, bribery and money laundering laws, regulations and controls.
• If we are unable to sustain pricing levels for our software, services and products, our business could be adversely affected.
• Insurance policies do not cover all of our operating risks, and a casualty loss beyond the limits of our coverage could negatively impact our business.
• Downturns in general economic and market conditions and reductions in spending may reduce demand for our software, services and products, which could harm our revenue, results of operations and cash flows.
• We are dependent upon relationships with foreign-based manufacturers and service providers, which exposes us to complex regulatory regimes, logistical challenges and business risk.
• We may face exposure to foreign currency exchange rate fluctuations.
• Our private placement warrants are accounted for as liabilities, and the changes in value of our warrants could have a material effect on our financial results.
• Risks Related to Our Indebtedness
• We may not be able to generate sufficient cash to service our indebtedness, and we may be forced to take other actions to satisfy our obligations under applicable debt instruments, which may not be successful.
• The Loan Agreement does, and any future agreements related to indebtedness may, restrict our current and future operations, particularly our ability to respond to changes in business or to take certain actions.
• Our common stock price may be volatile or may decline regardless of our operating performance. You may lose some or all of your investment.
• We do not intend to pay dividends on our common stock for the foreseeable future.
• Our issuance of additional shares of common stock or convertible securities could make it difficult for another company to acquire us, may dilute your ownership of us and could adversely affect our stock price.
• Future sales, or the perception of future sales, of our common stock by us or our existing stockholders in the public market could cause the market price of our common stock to decline.
• You may only be able to exercise the public warrants on a “cashless basis” under certain circumstances, and if you do so, you will receive fewer shares of common stock from such exercise than if you were to exercise such warrants for cash.
• We may amend the terms of the warrants in a manner that may have an adverse effect on holders of public warrants with the approval by the holders of at least 50% of the then-outstanding public warrants. As a result, the exercise price of your warrants could be increased, the exercise period could be shortened and the number of shares of common stock purchasable upon exercise of a warrant could be decreased, all without your approval.
• We may redeem your unexpired warrants prior to their exercise at a time that is disadvantageous to you, thereby making your warrants worthless.
• Our Warrant Agreement designates the courts of the State of New York or the U.S. District Court for the Southern District of New York as the sole and exclusive forum for certain types of actions and proceedings that may be initiated by holders of the warrants, which could limit the ability of warrant holders to obtain a favorable judicial forum for disputes with us.
• Anti-takeover provisions in our governing documents and under Delaware law could make an acquisition of us more difficult, limit attempts by our stockholders to replace or remove our current management and limit the market price of our common stock.
• Our Charter and Bylaws provide that the Court of Chancery of the State of Delaware is the sole and exclusive forum for substantially all disputes between us and our stockholders, which could limit our stockholders’ ability to obtain a favorable judicial forum for disputes with us or our directors, officers or employees.
• General Risk Factors
• Climate change and related environmental issues may have an adverse effect on our business, financial condition and operating results.
• Stockholder and customer emphasis on environmental, social and governance responsibility may impose additional costs on us or expose us to new risks.
• We incur increased costs as a result of being a public company. Failure to comply with laws, regulations and standards relating to our public company status could materially and adversely affect our business and results of operations.
• If securities analysts do not publish research or reports about us, or if they issue unfavorable commentary about us or our industry or downgrade our common stock, the price of our common stock could decline.