As filed with the Securities and Exchange Commission on September 19, 2025.

Registration Statement No. 333-     

 

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

 

 

FORM S-1

REGISTRATION STATEMENT

UNDER

THE SECURITIES ACT OF 1933

 

 

Andersen Group Inc.

(Exact name of Registrant as specified in its charter)

 

 

 

Delaware		7389		33-4630773
(State or other jurisdiction of		(Primary Standard Industrial		(I.R.S. Employer
incorporation or organization)		Classification Code Number)		Identification Number)

Andersen Group Inc.

333 Bush Street

Suite 1700

San Francisco, California 94104

(415) 764-2700

(Address, including zip code, and telephone number, including area code, of Registrant’s principal executive offices)

 

 

Mark L. Vorsatz

Chairman and Chief Executive Officer

Andersen Group Inc.

333 Bush Street

Suite 1700

San Francisco, California 94104

(415) 764-2700

(Name, address, including zip code, and telephone number, including area code, of agent for service)

 

 

Copies to:

 

Jay K. Hachigian Richard R. Hesp Jeffrey R. Vetter Alexa Belonick Elena M. Vespoli Gunderson Dettmer Stough Villeneuve Franklin & Hachigian, LLP 550 Allerton Street Redwood City, California 94063 (650) 463-5335		William Deckelman Andersen Group Inc. 333 Bush Street Suite 1700 San Francisco, California 94104 (415) 764-2700		Dave Peinsipp John McKenna Kristin VanderPas Denny Won Cooley LLP 3 Embarcadero Center, 20th Floor San Francisco, California 94111 (415) 693-2000

 

 

Approximate date of commencement of proposed sale to the public: As soon as practicable after the effective date of this registration statement.

If any of the securities being registered on this Form are to be offered on a delayed or continuous basis pursuant to Rule 415 under the Securities Act of 1933, as amended, check the following box. ☐

If this Form is filed to register additional securities for an offering pursuant to Rule 462(b) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. ☐

If this Form is a post-effective amendment filed pursuant to Rule 462(c) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. ☐

If this Form is a post-effective amendment filed pursuant to Rule 462(d) under the Securities Act, check the following box and list the Securities Act registration number of the earlier effective registration statement for the same offering. ☐

Indicate by check mark whether the Registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

 

Large Accelerated Filer		☐		Accelerated Filer		☐
Non-accelerated Filer		☒		Smaller Reporting Company		☐
				Emerging growth company		☒

If an emerging growth company, indicate by check mark if the Registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 7(a)(2)(B) of the Securities Act of 1933, as amended. ☐

 

 

The Registrant hereby amends this Registration Statement on such date or dates as may be necessary to delay its effective date until the Registrant shall file a further amendment that specifically states that this Registration Statement shall thereafter become effective in accordance with Section 8(a) of the Securities Act of 1933, as amended, or until the Registration Statement shall become effective on such date as the Securities and Exchange Commission, acting pursuant to said Section 8(a), may determine.

 

The information in this preliminary prospectus is not complete and may be changed. We may not sell these securities until the registration statement filed with the Securities and Exchange Commission is effective. This preliminary prospectus is not an offer to sell these securities and it is not soliciting an offer to buy these securities in any jurisdiction where the offer or sale is not permitted.

 

PRELIMINARY PROSPECTUS (Subject to Completion)

Issued    , 2025

     Shares

 

Class A Common Stock

 

 

Andersen Group Inc. is offering     shares of its Class A common stock. This is our initial public offering of shares of Class A common stock, and no public market currently exists for our shares. We anticipate that the initial public offering price will be between $    and $    per share.

 

 

We have applied to list our Class A common stock on the New York Stock Exchange (the NYSE) under the symbol “ANDG,” and this offering is contingent upon final approval of such listing.

Upon completion of this offering, we will have two series of authorized common stock, Class A common stock and Class B common stock. Each share of our Class A common stock is entitled to one vote per share. Each share of our non-economic Class B common stock is entitled to ten votes per share. Upon completion of this offering, Andersen Aggregator LLC will hold all outstanding shares of our Class B common stock and will therefore hold    % of the combined voting power of our outstanding capital stock (assuming no exercise of the underwriter’s option to purchase additional shares to cover over-allotments). As a result, we will be a “controlled company” within the meaning of the corporate governance standards of the NYSE, and therefore we will be permitted to, and we intend to, elect not to comply with certain corporate governance requirements thereunder. See the section titled “Management—Controlled Company Status.”

We are an “emerging growth company” as defined under the federal securities laws. As such, in this prospectus we have taken advantage of certain reduced disclosure obligations that apply to emerging growth companies, and may elect to comply with certain reduced public company reporting requirements for future filings.

We are a holding company, and immediately after the consummation of the reorganization transactions as described herein and this offering, our sole material asset will be the indirect ownership interests in Andersen Tax Holdings LLC through our ownership of approximately   % of the Class X Umbrella Units in AT Umbrella LLC, which in turn will own all ownership interests in Andersen Tax LLC (each as defined herein). We intend to use all of the net proceeds from this offering (including from any exercise by the underwriters of their over-allotment option) to purchase a number of newly issued Class X Umbrella Units from AT Umbrella LLC that is equivalent to the number of shares of Class A common stock that we offer and sell in this offering, as described under the section titled “Organizational Structure—This Offering and Our Post-IPO Structure.” We will operate and control all of the business and affairs of AT Umbrella LLC and conduct our business through AT Umbrella LLC.

 

 

Investing in our Class A common stock involves risks. See the section titled “Risk Factors” beginning on page 22.

 

 

PRICE $    A SHARE

 

 

 

		Price to Public		Underwriting Discounts and Commissions(1)		Proceeds to Andersen Group Inc.
Per Share		$		$		$
Total		$		$		$

(1)	See the section titled “Underwriters” for a description of the compensation payable to the underwriters.

At our request, the underwriters have reserved up to 7% of the shares of our Class A common stock offered by this prospectus for sale, at the initial public offering price, through a directed share program to our non-employee directors and certain other individuals and entities identified by us. See the section titled “Underwriters—Directed Share Program.”

We have granted the underwriters an option for a period of 30 days to purchase up to an additional    shares of Class A common stock solely to cover over-allotments, if any.

The Securities and Exchange Commission and state securities regulators have not approved or disapproved these securities or determined if this prospectus is truthful or complete. Any representation to the contrary is a criminal offense.

The underwriters expect to deliver the shares of our Class A common stock to purchasers on     , 2025.

 

 

 

MORGAN STANLEY		UBS INVESTMENT BANK

 

DEUTSCHE BANK SECURITIES		TRUIST SECURITIES		WELLS FARGO SECURITIES

 

BAIRD				WILLIAM BLAIR

    , 2025

 

ANDERSEN Delivering Exceptional Client Service Grounded in Integrity, Transparency, and Excellence

 

Robust $732M 14% Top-Line M Performance 24 YoY Growth 24 Revenue Significant 11,300 20,600Client Base Client Groups Client Engagements Large Pool 288 2,220 of Talented Professionals Managing Directors Total Employees Healthy 18% 20% Margins and Profitability 24 Net Income 24 Adj. EBITDA Margin Margin Notes: Notes: 1. Financials are for the year ended December 31, 2024; All other figures are as of June 30, 2025 2. For Adj. EBITDA Margin, see the section titled Managements Discussion and Analysis of Financial Condition and Results of Operations Non-GAAP Financial Measures for additional information and a reconciliation to the most directly comparable financial measure prepared in accordance with GAAP.

 

Andersen Global Unlocks International Reach Member Firms of Andersen Global Collaborating Firms of Andersen Global Andersen Consulting 300+ Member and Collaborating Firms 890+ Locations 182+ Countries 2,900+ Partners 44,000+ Professionals Notes: 1. All figures as of June 30, 2025, and excludes Andersen Consulting 2. Andersen Global refers to a Swiss verein, of which Andersen Tax LLC is a founding member

 

Family Office Consulting Real Estate Consulting Global Workforce Mobility Fund Tax Compliance and Advisory Investment Consulting Fund Formation and Global Structuring Private Accounting Solutions Fund Accounting Trust, Estate and Charitable Planning Private Client Services Alterative Investment Funds, Business Tax Services Valuation Services ANDERSEN Tax Valuation Litigation and Dispute Support Fixed Assets and Cost Segregation Financial Reporting Financial Due Diligence and Transaction Support International Tax Services and Transfer Pricing M&A Tax Advisory State and Local Tax Tax Compliance and Reporting Tax Technology Automation

 

ANDERSEN Over Two Decades of Integrated, Differentiated Service 170+ Andersen Global Countries 19,000+ Andersen Global Personnel $700MM+ Revenue 70+ Andersen Global Countries 5,000+ Andersen Global Personnel 165+ Andersen Global Countries 15,000+ Andersen Global Personnel 2000+ 1000+ Personnel Personnel 40 Andersen $500MM+ Global Revenue Countries 7 Andersen $250MM+ Global Revenue Countries 16 Andersen 1000+ Global Countries Andersen Global Personnel 3 Andersen Global Countries 500+ Personnel $100MM+ Revenue Completed Management buyout from Founded Expanded service HSBC under the capabilities name Wealth to include and Tax investment Advisory consulting services, Services, Inc. (WTAS) valuation services and 921520-023-Part-3 SALT, amongst others Formed Andersen Global Launched collaboration with the University of San Francisco Launched Student Loan Acquired Andersen Paydown Plan name and rebranded for employees to Andersen Tax and Andersen Global Launched Andersen Institute of Finance and Economics Launched Andersen Consulting 2002 2003 2007 2008 2012 2013 2014 2016 2018 2019 2022 2023 2024 2025

TABLE OF CONTENTS

PROSPECTUS

 

 

 

Through and including    , 2025 (the 25th day after the date of this prospectus), all dealers effecting transactions in these securities, whether or not participating in this offering, may be required to deliver a prospectus. This is in addition to a dealer’s obligation to deliver a prospectus when acting as an underwriter and with respect to an unsold allotment or subscription.

Neither we nor the underwriters have authorized anyone to provide any information or to make any representations other than those contained in this prospectus or in any free writing prospectuses filed with the Securities and Exchange Commission. Neither we nor any of the underwriters take any responsibility for, and can provide no assurance as to the reliability of, any other information that others may give you. This prospectus is an offer to sell only the shares offered hereby, but only under circumstances and in jurisdictions where it is lawful to do so. We are offering to sell, and seeking offers to buy, shares of our Class A common stock only in jurisdictions where offers and sales are permitted. The information contained in this prospectus is accurate only as of the date of this prospectus, regardless of the time of delivery of this prospectus or of any sale of the shares of our Class A common stock. Our business, operating results, financial condition, and future prospects may have changed since that date.

For investors outside the United States: Neither we, nor any of the underwriters have taken any action that would permit this offering or possession or distribution of this prospectus in any jurisdiction where action for that purpose is required, other than in the United States. You are required to inform yourselves about and to observe any restrictions relating to this offering and the distribution of this prospectus.

 

i

GLOSSARY

As used in this prospectus, unless we state otherwise or the context otherwise requires:

 

•

“we,” “us,” “our,” “Andersen,” the “Company” and similar references refer (a) after giving effect to the reorganization transactions described in the section titled “Organizational Structure,” to Andersen Group Inc. and, where applicable as context requires, its consolidated subsidiaries, and (b) prior to giving effect to the reorganization transactions, to Andersen Tax Holdings LLC and, where applicable as context requires, its consolidated subsidiaries.

 

•

“Aggregator” refers to Andersen Aggregator LLC, a Delaware limited liability company and a holding company of which, following the reorganization transactions, the equity owners include current Managing Directors.

 

•

“Aggregator LTIP Units” refers to the profits interests of Aggregator. Aggregator LTIP Units will be economically similar to stock options. Each Aggregator LTIP Unit has a per unit hurdle price, which is economically similar to the exercise price of a stock option.

 

•

“Andersen Consulting” refers to Andersen Consulting Holdings L.P., a Delaware limited partnership of which Andersen Tax Holdings LLC is the sole member of the general partner of such limited partnership.

 

•

“Andersen Global” refers to Andersen Global, a Swiss verein, of which Andersen Tax LLC is a member.

 

•

“Andersen Group” refers to Andersen Group Inc., a Delaware corporation and the issuer in this offering.

 

•

“Arthur Andersen” refers to the former Arthur Andersen & Co. or Arthur Andersen LLP, as context requires.

 

•

“AT Umbrella” refers to AT Umbrella LLC, a Delaware limited liability company and a direct subsidiary of Andersen Group Inc. following the reorganization transactions.

 

•

“Class X Aggregator Units” refers to the common interest units in Aggregator, which are designated as Management Class X Aggregator Units and Investment Class X Aggregator Units corresponding to units exchanged in the reorganization transactions from MD Management LLC and MD Investment LLC, respectively.

 

•

“Class X Umbrella Units” refers to the common interest units in AT Umbrella.

 

•

“LTIP Units” refers to the profits interests of AT Umbrella. LTIP Units will be economically similar to stock options. Each LTIP Unit has a per unit hurdle price, which is economically similar to the exercise price of a stock option.

 

•

“Managing Director” refers to a person who holds the title of Managing Director of Andersen Tax LLC, a Delaware limited liability company and an indirect subsidiary of Andersen Group Inc. following the reorganization transactions, or a comparable position including certain persons who are members of an advisory board or equivalent of an affiliate of Andersen Tax LLC.

 

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RISK FACTORS

Investing in our Class A common stock involves a high degree of risk. You should consider carefully the risks and uncertainties described below, together with all of the other information in this prospectus, including “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and the consolidated financial statements and the related notes included elsewhere in this prospectus before deciding whether to invest in shares of our Class A common stock. The risks and uncertainties described below are not the only ones we face. Additional risks and uncertainties that we are unaware of or that we deem immaterial may also become important factors that adversely affect our business. If any of the following risks actually occur, our business, financial condition, liquidity, operating results, and prospects could be materially and adversely affected. In that event, the market price of our Class A common stock could decline, and you could lose part or all of your investment.

Risks Related to Our Business, Operations and Industry

We may not be able to maintain or increase our historical revenue growth or profitability in the future.

We generated $731.6 million and $639.1 million of revenue in 2024 and 2023, respectively, and $384.1 million for the six months ended June 30, 2025 compared to $341.5 million for the six months ended June 30, 2024, with a CAGR of 15% since 2003, the first full fiscal year following our formation, through 2024. We also had net income of $134.8 million and $118.7 million in 2024 and 2023, respectively, and a net loss of $(45.4) million for the six months ended June 30, 2025 compared to net income of $46.9 million for the six months ended June 30, 2024, driven primarily by issuance of new profits interest units in the second quarter of 2025. Our ability to maintain or increase our historical revenue growth or profitability depends on our ability to continue to generate and maintain client demand in the professional services industry, as well as to anticipate, gauge, and react to changing client preferences in a timely manner. You should not rely on the revenue growth or profitability of any prior quarterly or annual period as an indication of our future performance. Even if our revenue continues to increase, we expect that our revenue growth rate will fluctuate in the future as a result of a variety of factors and our profitability may not be maintained. We have encountered and will continue to encounter significant risks and uncertainties frequently experienced by growing companies. If our assumptions regarding these and other similar risks and uncertainties are incorrect or change, or if we do not address these challenges successfully, our operating and financial results could differ materially from our expectations and our business could suffer. If we are unable to remain competitive, or if we fail to anticipate accurately and respond to trends and shifts in client needs, we could lose current clients, fail to attract new clients, or experience lower revenue or net income, any of which could have an adverse effect on our results of operations and financial condition.

Our business depends on generating and maintaining client demand, including through the adaptation and expansion of our services, and a significant reduction in such demand could materially affect our results of operations.

The professional services industry has been and continues to be impacted by significant competition, technological changes and innovation. Our success depends, in part, on our ability to continue to develop and implement service offerings that anticipate and respond to rapid and continuing changes to serve the evolving needs of our clients and to remain competitive. As we continue to adapt and also expand our service offerings, including to keep up with advanced technologies being deployed by our competitors, we may be exposed to operational, legal, regulatory, ethical, technological and other risks, which may negatively affect demand for our services.

Developments in the professional services industry, which may be rapid, also could shift demand to new services. If, as a result of new technologies or other changes, our clients demand new services, we may be less competitive in these new areas or need to make significant investment to meet that demand. If we do not sufficiently invest in new technology and adapt to industry developments, or evolve and expand our service

 

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offerings at sufficient speed and scale, or if we do not make the right strategic investments to respond to these developments and successfully drive innovation, our services, results of operations, and ability to develop and maintain a competitive advantage and to execute on our growth strategy could be adversely affected. See the risk factor titled “—Risks Related to Information Technology, Infrastructure and Intellectual Property—Rapid technological changes, including the widespread adoption of AI, could significantly impact our competitive position, client relationships and results of operations.”

We may be unable to effectively manage our growth, which could place significant strain on key personnel, as well as our systems and other resources.

Our growth in recent years has been both organic and through acquisitions, and we expect this growth to continue, including through acquisitions, as we execute on our business strategy. This growth requires that we invest substantial amounts of cash in human capital and the infrastructure to support them, including recruiting, training, administration, and facilities. Significant and/or rapid growth places substantial strain on our key personnel and our administrative, operational and financial infrastructure, and creates challenges, including:

 

•

recruiting, training and retaining sufficiently skilled professionals and other personnel;

 

•

balancing headcount with client requirements;

 

•

balancing an increase in the number of experienced personnel that have correspondingly higher billing rates with hiring, training, and deploying less experienced personnel;

 

•

planning and maintaining resource utilization rates consistently and efficiently;

 

•

maintaining our culture;

 

•

developing and maintaining close and productive relationships with potential and existing clients;

 

•

controlling costs and minimizing cost overruns and project delays;

 

•

effectively maintaining productivity levels and implementing process improvements during periods of uneven client demand; and

 

•

scaling and improving our information security and internal administrative, operational and financial infrastructure.

As we grow, whether through introducing new services, entering into new markets and client relationships, pursuing acquisitions or other inorganic growth opportunities or otherwise, our business will face new risks and challenges. If the challenges associated with expansion and new investments negatively impact our anticipated growth and margins, or if we are unable to effectively manage the human capital and infrastructure challenges related to such growth, our business, prospects, financial condition and results of operations could be materially adversely affected.

We may not be able to identify and complete acquisitions of additional businesses, including due to regulatory or legal restrictions, which may limit our ability to pursue our business strategy.

Our business strategy involves the acquisition of additional businesses that we believe will strategically complement our existing business. These activities will require us to identify suitable acquisition candidates or other strategic investment opportunities that meet our criteria and are compatible with our growth strategy and culture. We expect to incur significant costs in connection with our acquisition strategy, including fees of our attorneys and other advisors and other costs related to the acquisitions.

We may be unable to identify suitable acquisition candidates in the future or acquire them on acceptable terms, or at all. For example, while we are leveraging an AI platform to review due diligence materials, streamline process management and assist in contract negotiations in connection with our acquisition strategy, we may not be effective in using AI tools to identify and complete acquisitions and such tools may not have the intended effect of improving transaction management or identification of risks. Our ability to acquire businesses on favorable terms may be constrained by a number of factors, including competition from other potential

 

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acquirors with significantly more resources than us; regulatory or legal restrictions such as antitrust challenges, foreign investment restrictions, and applicable labor law; changes in market conditions; or otherwise; which may result in higher expenses incurred without benefiting from the anticipated revenue growth of any such uncompleted acquisitions and could impede our growth strategy.

We may not be successful at integrating or managing future acquisitions, and/or such acquisitions may not otherwise perform to our expectations, which may increase the costs and reduce the benefits, if any, we receive from such acquisitions.

While acquisitions are a key part of our growth strategy, these transactions involve significant risks. Acquired companies may not advance our business strategy or achieve a satisfactory return on our investment. Acquisitions also may involve a number of financial, business and operational risks, such as difficulties in integrating diverse cultures and management styles; client relationship issues; decreased utilization during the integration process; loss of key existing or acquired personnel; increased costs to improve or coordinate operational, financial and administrative systems; dilutive issuances of equity securities; the assumption of legal liabilities, including malpractice and similar claims; future earn-out payments or other price adjustments; potential future write-offs relating to the impairment of goodwill or other acquired intangible assets or the revaluation of assets; difficulty or inability to collect receivables; and undisclosed liabilities. In addition, we may need to implement controls, processes, and policies appropriate for a public company at acquired companies that may have previously lacked such controls, processes, and policies in areas such as cybersecurity, accounting, internal controls, IT, and privacy. We may also face additional financial, business and operational risks as a result of acquisitions designed to broaden our range of services and related client bases, such as from potential expansion of our relationship with Andersen Consulting. Any of these risks may be heightened in the context of the acquisition of an international business. See the risk factor titled “—Any future international expansion will subject us to additional costs and risks and our plans may not be successful.”

The process of managing and integrating acquisitions into our existing operations may result in unforeseen operating difficulties and may require significant financial, operational and managerial resources that would otherwise be available for the operation, development and organic expansion of our existing operations. In addition, we may seek to consummate multiple concurrent acquisitions which may cause additional integrational difficulties and further strain our resources and capabilities. To the extent that we misjudge our ability to effectively manage and integrate acquisitions, we may have difficulty achieving our operating, strategic and financial objectives.

Certain acquisition structures, including any that take the form of an asset purchase, may require us to enter into new client engagement agreements. All clients may not want to work with a new organization. In certain cases, the consent of clients may not be able to be solicited until after the acquisition has closed and therefore, we cannot assure you that clients of an acquired business will agree to work with us.

From time to time, we also hire groups of selected professionals from another company. In such event, there may be restrictions on the ability of the professionals who join us to compete and work on client engagements. In addition, we may enter into arrangements with the former employers of those professionals regarding limitations on their work until any time restrictions pass. In such circumstances, the utilization of such professionals may be limited after they are hired, and our financial results could be negatively affected until their restrictions end. We could also face litigation risks from group hires, which could result in increased costs, potential significant monetary damages and could further delay or restrict the ability of such new hires to provide services. In addition, businesses that we acquire or employees who join us may not be free to accept engagements they could have accepted prior to our acquisition or hire because of relationship issues or actual or perceived conflicts of interest.

If not effectively managed, the disruption of our ongoing business, increases in our expenses, including significant one-time expenses and write-offs; assumption of unknown liabilities, including tax, litigation, cybersecurity, and other commercial risks; and difficulty and complexity of effectively integrating acquired operations may adversely affect our overall growth and profitability.

 

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Our competitiveness and success depend substantially on the continuing efforts of our CEO and Chairman, Mark Vorsatz, our senior Managing Directors and other key personnel.

Our future success heavily depends upon the expertise, reputation and continued services of our CEO and Chairman, Mark Vorsatz. If Mr. Vorsatz were no longer working at our company, our brand, reputation, and ability to attract and retain clients, senior Managing Directors and other employees, or to execute on our growth strategy, may be materially adversely affected. Although Mr. Vorsatz spends significant time with us and is highly active in our management, he also currently serves as Global Chairman of Andersen Global, a Swiss association of over 300 member and collaborating firms and of which we are a founding member. We believe our relationship with Andersen Global enhances our business through referrals and client introductions from these international partner firms and we do not believe that the time that Mr. Vorsatz currently spends on his Andersen Global duties directly impacts our operations or financial position. However, Mr. Vorsatz’s service with Andersen Global may detract from time otherwise available for his duties and role at our firm and he may be required to devote more time to Andersen Global in the future. In addition, effective management of future succession planning, including succession plans for Mr. Vorsatz and other senior Managing Directors and key personnel, is important for our future success. Inadequate succession planning or the unexpected departure of Mr. Vorsatz could cause substantial disruption to our business operations, deplete our institutional knowledge base and referral network, hinder our ability to pursue our strategic acquisition strategy, and erode our competitive advantage.

Our success also depends on the continued service of our senior Managing Directors and other key personnel. Our senior professionals’ expertise, skill, reputation and relationships with clients, potential clients, member and collaborating firms of our global network, Andersen Global, and the leadership personnel of Andersen Consulting are critical elements in maintaining and expanding our businesses. If one or more of these personnel are unable or unwilling to continue in their present roles, we may not be able to replace them easily or at all. While we do not have a mandatory retirement age, if any of our senior Managing Directors or key personnel were to retire, or decide to resign, join an existing competitor, form a competing company or otherwise leave us, we may jeopardize client relationships and ultimately lose clients, know-how and other key personnel, particularly if we have not adequately hired or trained our junior professionals or appropriately staffed our client engagements. In addition, the departure of one or more professionals may lead to the departure of other professionals who desire to continue to work together elsewhere or who decide to accelerate their retirement decision making. If we are unable to attract or retain our senior Managing Directors or key personnel due to the intense competition for talent in our industry, it could disrupt our business operations and growth.

If we cannot maintain our firm culture as we grow and become a public company, our success and our business may be harmed.

We have invested substantial time and resources into building our firm culture and believe that it has been a critical component of our success to date. As we seek to continue to grow, including through geographical expansion, expansion into new services offerings, the acquisition of new businesses or groups of professionals, and developing the infrastructure associated with being a public company, we will need to maintain our culture across a larger number of employees, service offerings, and geographic regions. As we grow, if at all, it may be difficult to maintain the collaboration, innovation, and values that are important to our culture. Moreover, as we develop the infrastructure of a public company, our operations may need to change to support that infrastructure. In particular, we are committed to a transparent culture that promotes intentional sharing of information so that our employees are engaged and invested in our success. Due to certain operational changes needed to become a public company, we may find it difficult to maintain important aspects of our firm culture and this commitment to transparency. Any failure to preserve our culture could negatively impact our operations, including our ability to retain and recruit personnel and to effectively focus on and pursue our business objectives. If we cannot maintain our firm culture as we grow and become a public company, it could have a material adverse effect on our financial condition and results of operations.

 

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Failure to maintain our reputation and brand could impact our ability to attract and retain clients, employees and future acquisition targets, and may harm our business.

As a professional services firm, our ability to secure new engagements depends heavily upon maintaining our reputation and brand and the individual reputations of our professionals. Any factor that diminishes our brand or reputation or that of our professionals, including not meeting client expectations or illegal practices or misconduct by our professionals, could make it substantially more difficult for us to attract new clients, employees and future acquisition targets, or to retain existing clients and employees. Similarly, because we obtain many of our new engagements from former or current clients, or from referrals by those clients, any client that questions the quality of our work or that of our professionals could impair our ability to secure additional new engagements and clients, and could impair our ability to hire new employees or attract future acquisition targets.

Further, because we provide our services primarily in connection with significant or complex matters that often involve confidential and sensitive information, and because our work is the product of myriad judgments of our professionals and other staff operating under significant time and other pressures, we may not always perform to the standards expected by our clients. In addition, we may face reputational damage from, among other things, litigation against us, SEC or other domestic or foreign governmental investigations or sanctions, professional licensing organization disciplinary investigations or actions, or our failure to protect confidential information. In the past, employee negligence or misconduct has adversely affected our business, and we cannot assure that this will not occur in the future. See the risk factor titled “—If we were to be held liable for alleged errors, omissions, illegal practices or other misconduct in providing our services to clients, our brand and reputation could be harmed and we could incur significant costs, which may exceed available insurance, if any, and which could harm our business.” If our employees engage in actual or perceived misconduct or negligence in the provision of client services we could be subject to regulatory sanctions and legal liability and could suffer serious harm to our reputation, financial position, current client relationships and ability to attract future clients, and our insurance coverage may not be sufficient to fully compensate us for any losses we may incur. It is not always possible to deter or prevent employee misconduct or negligence, and the precautions we take may not be effective in all cases. In addition, our professionals and other employees are responsible for the security of the information in our systems or under our control and for ensuring that non-public information is kept confidential. Should any employee not follow appropriate security measures, this could result in the improper release or use of confidential information. If our employees engage in misconduct or fail to follow appropriate security measures, we could be subject to legal liability and reputational harm, which could impair our ability to attract and retain clients and in turn materially adversely affect our business

Our ability to staff client engagements, maintain relationships with clients and drive future growth depends on our ability to recruit, train and retain qualified professionals.

We deliver sophisticated professional services to our clients and our business is highly labor-intensive. Our success and future growth is dependent, in large part, on our ability to keep our supply of skills and human resources in balance with client demand, particularly as we expand our service offerings and as the market and technological advancements continue to evolve. To attract and retain clients, we need to consistently demonstrate professional acumen and build trust and strong relationships. Our professionals have highly specialized skills. They also develop strong bonds with the clients they serve, which is a critical element in obtaining and maintaining client engagements. Our continued success depends upon our ability to continue to attract and retain professionals who have the expertise, reputation and client relationships critical to maintaining and developing our business. We face intense competition in recruiting and retaining highly qualified professionals to drive our growth and support the expansion of our business. We incur significant expenses and expend significant time and resources to recruit, train, integrate and develop our professionals, and we expect these costs to continue as we grow. We also experience attrition of highly qualified professionals in the normal course of our business. We cannot assure you that we will be able to continue to attract or retain any particular qualified professionals or replace those that choose to leave us. Adverse labor and economic market conditions and intense competition for

 

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skilled personnel may inhibit our ability to recruit new employees or retain existing employees. In particular, there is a global talent shortage in the accounting sector, which makes these professionals in particularly high demand, and makes our ability to recruit and hire appropriately qualified professionals particularly time-consuming, competitive and expensive compared to many other industries. Additionally, there are challenges related to integrating personnel into our organization and ensuring a proper cultural fit, and these challenges may increase if we continue to grow, particularly if we grow internationally. If we are unable to successfully integrate, motivate, retain or replace qualified professionals, our ability to continue to secure or perform work for our clients may suffer.

Our principal competition for talent comes from other large accounting and consulting firms, as well as from organizations seeking to staff their internal professional positions. If we successfully expand our service offerings to include legal services or investment banking, we would face competition for talent from law firms or investment banks providing the services we provide and in the geographies where we operate. Many of these competitors may be able to offer greater compensation and benefits or more attractive lifestyle choices, career paths, or geographic locations than we can offer. Therefore, we may not be successful in attracting and retaining the skilled professionals we require to conduct and expand our operations successfully. Increasing competition for these revenue-generating professionals may also significantly increase our labor costs, which could negatively affect our margins and results of operations.

If we were to be held liable for alleged errors, omissions, illegal practices or other misconduct in providing our services to clients, our brand and reputation could be harmed and we could incur significant costs, which may exceed available insurance, if any, and which could harm our business.

All of our services entail an inherent risk of claims of malpractice and other similar claims resulting from alleged errors, omissions, illegal practices or other misconduct in providing our services to clients. Actual or perceived errors, omissions, illegal practices and other misconduct by our professionals in the course of delivering services, or our failure to meet our contractual obligations to a client, have resulted and could in the future result in a reduction in our revenue, damage to our reputation, and in clients terminating our engagement or making claims for substantial damages against us. In addition, our business strategy of seeking to acquire additional groups of professionals and businesses may increase the probability of the occurrence of such claims. Although we maintain errors and omissions insurance coverage, we cannot be certain that actual claims, judgments, settlements, or related legal expenses would not exceed the coverage amounts. In addition, if we expand our service offerings to include legal advice or other offerings, we cannot be certain that we will be able to procure adequate insurance coverage to mitigate the increased risk of claims that may occur, including in regards to legal malpractice or breach of professional responsibility obligations. If judgments, settlements, or related legal expenses exceed insurance coverage by a substantial amount, they could have a material adverse effect on our business, financial condition and operating results. In addition, we cannot be certain that the different insurance carriers which provide errors and omissions coverage for different lines of our business will not dispute their obligation to cover a particular claim. If we have a large claim, or a large number of claims, on our insurance, the rates for such insurance may increase, and amounts expended in defense or settlement of these claims prior to exhaustion of deductible or self-retention levels may become significant. Further, some contractual arrangements with clients may constrain our ability to incorporate such increases into our billing rates. Insurance rate increases, disputes by carriers over coverage questions, payments by us within deductible or self-retention limits, as well as any underlying claims or settlement of such claims, along with any resultant negative publicity or damage to our brand, could have a material adverse effect on our reputation, business, financial condition and results of operations.

We may enter into or invest in new lines of business or engage in other strategic initiatives that may fail to generate revenue and result in additional risks to our business.

In addition to future acquisitions of businesses, we also plan to grow our business by entering into new lines of business or engaging in other strategic initiatives to significantly expand the scope and scale of our service

 

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offerings. For example, in the near-term, we plan to seek to expand the scope of our consulting services practice, including as to our relationship with Andersen Consulting. This growth strategy will subject us to numerous risks and uncertainties, including risks associated with actual or perceived conflicts of interest, the possibility that we have insufficient expertise to engage in such activities profitably or without incurring inappropriate amounts of risk, the required investment of capital and other resources and the loss of clients.

Entry into certain lines of business may also subject us to new laws, regulations and professional rules of responsibility with which we are not familiar, or from which we are currently exempt, and may lead to increased litigation and regulatory risk. We could also face new competition by entering into new lines of business, and we may not successfully overcome any barriers to entry. If a new service offering or other strategic initiative generates insufficient revenue or if we are unable to efficiently manage our expanded services offerings, our business, financial condition and results of operations could be materially adversely affected.

If we fail to compete effectively, we may miss business opportunities or lose existing clients, and our revenue may decline.

The market for our services is highly competitive. We do not compete against the same companies across all of our service offerings. Instead, we compete with different companies or businesses depending on the particular nature of an engagement. Our primary competitors include large global full-service financial advisory and consulting firms; accounting and advisory practices that focus on middle-market clients; full-service, boutique and specialized tax advisory firms; local providers in the tax, legal, financial advisory and consulting markets internationally; and in-house tax and accounting departments of our clients and potential clients. We compete on national, international and regional bases, and on the basis of a number of factors, including depth of client relationships, industry knowledge, transaction execution skills, our range of services, innovation, reputation and price. In addition, we could experience additional competition as we expand our service offerings, enter new geographic markets and acquire businesses in the future. Some of our competitors have significantly more financial resources, a larger national or international network or presence that may enable them to respond to clients’ international needs more effectively, larger professional staffs and greater brand recognition than we do. Some have lower overhead and other costs and can compete through lower-cost service offerings. Our larger and better capitalized competitors may be better able to respond to changes in the market, to compete for skilled professionals, to finance acquisitions, to fund internal growth and technological advancements and to compete for market share generally, which puts us at a competitive disadvantage and could result in pricing pressures or loss of opportunities.

In addition, in our business, there are usually no long-term contracted sources of revenue and clients could seek similar services from a competitor at any time. If we are unable to compete successfully with our existing competitors or with any new competitors, we will not be able to implement our growth strategy, which could materially adversely affect our business, financial condition and results of operations.

Since our business depends in large part on professional relationships and networks, our business has relatively low barriers to entry for experienced professionals electing to start their own firms or work independently. In addition, it is relatively easy for professionals to change employers. As a result, we could face additional competition from new firms that may be formed in the future.

If we cannot compete effectively or if the costs of competing, including the costs of hiring and retaining professionals, become too expensive, our revenue growth and financial results could be adversely affected and may differ materially from our expectations. Additionally, our competitors may adopt and deploy new technologies, such as AI and machine learning, more rapidly or successfully than we do, which may materially adversely affect our competitive position, financial condition and results of operations.

 

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Our revenue and profitability may vary based on the mix of the types of our client engagements and may be adversely affected by our failure to recover the expenses, time, and resources for our client engagements.

We currently generate a substantial majority of our revenue on a time and materials basis, and to a lesser extent, by fixed-fee contracts, and contingent fee contracts. In the future, our revenue and profitability could vary materially depending on changes in the nature of services provided, as well as the stage of performance at which the right to receive fees is finally determined.

Our profitability could be adversely affected when we incur costs that we cannot bill to our clients. Each of our engagements involves a level of risk that we could underestimate the expenses, time and resources necessary for the client engagement. The rates we are able to charge for our services are affected by a number of factors, including general economic and political conditions; the competitive environment in our industry; the introduction of new technologies (such as generative AI), services or products by competitors, which could reduce our ability to obtain favorable pricing and impact our overall economics for the services we offer; our ability to accurately estimate our costs; and the procurement practices of our clients. There may also be fee adjustments if we cannot bill for the time incurred. Engagement costs may increase for many reasons, including technical challenges, delays, workforce-related issues, inaccurate initial cost estimates, inability to achieve efficiencies, changing laws or regulations, inflation and natural disasters. If we are unable to manage and control these costs, our operating results could be adversely affected, and we may be unable to retain existing clients or secure future engagements.

In the future, some clients could increasingly prefer alternative fee arrangements that may place limitations on our fee structure, or that may shift more of our revenue-generating potential to back-end contingent and success fee arrangements, particularly if we expand our service offerings to provide legal advice. With respect to such alternative fee arrangements, there is a risk that the cost of providing services exceeds the fees we collect during all or a portion of the term of the engagement. In such cases, our failure to manage the engagement efficiently or collect the success or performance fees could expose us to a greater risk of loss on such engagement than other fee arrangements or may cause variations in our revenue and operating results due to the timing of achievement of the performance-based criteria, if achieved at all. Our ability to service clients with these fee arrangements may not directly correlate to our costs incurred, which could adversely impact or result in a loss of the profitability of such engagements, and therefore could adversely affect our financial results.

Our profitability could suffer if we are not able to effectively utilize our employees, maintain operational efficiencies or manage our cost structure.

Our failure to manage the utilization of our professionals who generally bill on an hourly basis, or maintain or increase the hourly rates we charge our clients for our services, could result in adverse consequences, such as non- or lower-revenue-generating professionals, increased employee turnover, fixed compensation expenses in periods of declining revenue, and the inability to appropriately staff engagements.

A number of factors affect the utilization of our professionals, some of which are outside our control, including general economic and financial market conditions; the complexity, number, type, size and timing of client engagements; the level of demand for our services; appropriate staffing levels in light of changing client demands, expectations or market conditions; our ability to transition our employees efficiently from completed engagements to new engagements; the transition period for new hires that results in a temporary drop in utilization; unanticipated changes in the scope of client engagements; our ability to forecast demand for our services; conditions affecting our clients’ businesses and industries as well as general economic conditions; competition, and acquisitions. In addition, our expansion into or within lines of business or geographic locations where our brand is not well-known or where demand for our services is not well-developed could also contribute to low or lower utilization rates in certain service offerings or locations.

Our people are our primary asset and account for the majority of our expenses. If we are unable to manage staffing levels on a timely basis in light of changing opportunities or conditions, which may include either

 

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insufficient or excess personnel than required to meet client demand, our ability to accept or service client engagements, take advantage of positive market and industry developments, expand into new service offerings, realize future growth or manage our cost structure could be negatively affected, which could negatively impact our client relationships, competitiveness, revenue and profitability.

Claims or adverse publicity could harm our brand, reputation and ability to compete and attract and retain clients, talent and future acquisition targets.

Our reputation is potentially susceptible to damage by actions or statements made by current or former clients and employees, competitors, vendors, adversaries in legal proceedings, government regulators, professional licensing organizations, as well as members of the investment community and the media. Our engagements may involve matters that may result in a severe impact on a client’s business, cause the client a substantial monetary loss or prevent the client from pursuing business opportunities. Additionally, some of our engagements may involve matters or clients that may be socially or politically unpopular, which could result in adverse publicity and harm our reputation. Our ability to retain existing clients and generate repeat engagements depends upon our ability to maintain a high degree of client satisfaction. Our ability to attract new clients and future acquisition targets, and to hire and retain highly skilled professionals, depends upon our reputation in the professional services industry. As a result, any claims or adverse publicity involving the quality of our services or the reputation of our professionals, matters or clients may be more damaging than similar claims or publicity relating to businesses in other industries. There is a risk that negative information about us, even if untrue, could adversely affect our business, could cause damage to our reputation and be challenging to repair. Additionally, any claims or adverse publicity involving Andersen Global member or collaborating firms, or the failure of Andersen Global to manage any internal conflicts between member or collaborating firms, may adversely affect our brand and reputation. Similarly, any claims or adverse publicity involving Andersen Consulting partner firms, or the failure of Andersen Consulting to manage any internal conflicts between partner firms, may adversely affect our brand and reputation. See the risk factor titled “—If we fail to continue to benefit from our existing business relationships and fail to establish new relationships in the future, our results of operations could be adversely affected.”

Damage to our reputation could also reduce the value and effectiveness of our brand name and could reduce investor confidence in us. Any such claims, adverse publicity or negative connotations may adversely affect our reputation or the reputations of our professionals, or may otherwise harm our ability to attract or retain clients, employees and future acquisition targets, all of which could have an adverse effect on our results of operations, business or prospects.

Adverse judgments or settlements in legal disputes could result in monetary damages or injunctive relief that could damage our reputation and materially affect our results of operations.

We are subject and party to, and may in the future become subject and a party to, a variety of litigation or other claims and suits that arise from time to time in the ordinary course of our business. Our business is subject to the risk of litigation involving current and former employees, clients, competitors, or others through private actions, class actions, whistleblower claims, administrative proceedings, regulatory actions, criminal proceedings or other litigation. Regardless of the merits of the claims, the cost to defend current and future litigation may be significant, and such matters can be time-consuming and divert management’s attention and resources. The results of litigation and other legal proceedings are inherently uncertain, and adverse judgments or settlements in some or all of these legal disputes may result in materially adverse monetary damages, fines, penalties, or injunctive relief against us. Any claims or litigation, even if fully indemnified or insured, could damage our reputation and make it more difficult to compete effectively or to obtain adequate insurance in the future. Moreover, as we expand our service offerings into new areas, we may be exposed to additional and evolving risks specific to these new areas.

The results of litigation and other legal proceedings are inherently uncertain and adverse judgments or settlements in some or all of such disputes may result in materially adverse monetary damages or injunctive relief

 

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against us. Any claims or litigation, even if fully indemnified or insured, could also damage our reputation and make it more difficult to compete effectively or obtain adequate insurance coverage in the future.

Consolidation in the professional services industry could have a material adverse effect on the competitiveness of our business, financial condition and results of operations.

Consolidation in the professional services industry could create increased pricing and competitive pressures for the industry as a whole and our business in particular. In addition, consolidation could also result in an increasing number of very large companies offering services across a wide variety of individual and business needs. Consolidation activity may result in new competitors with greater scale, a broader footprint or offerings that are more attractive than ours. We expect new and existing companies in the professional services industry to continually revise and improve their business models. The growth of these companies, which may have significantly more resources, market share and marketing power than we do, could also result in increased pricing and other competitive pressures for us. These companies could also be quicker or more effective at acquiring and integrating professionals or businesses in international markets than we are, which may impede our ability to grow. Accordingly, industry consolidation could harm our business.

We have a relatively short operating history at our current scale in a competitive industry and, as a result, our past results may not be indicative of future operating performance.

We have a relatively short history of operating at our current scale. As a result, we have limited financial and operational data that can be used to evaluate our future business and prospects. Our ability to accurately forecast our future results of operations is limited and subject to a number of uncertainties, including our ability to plan for and forecast future growth. Any evaluation of our business and prospects must be considered in light of our short operating history at our current scale, which may not be indicative of future performance. Because of our limited operating history at our current scale, we face increased risks, uncertainties, expenses, and challenges, including our ability to execute on our growth strategy and the other the risks and uncertainties discussed in this “Risk Factors” section.

We may experience quarterly fluctuations in our operating results, as well as our key metrics, due to a number of factors that make our future results difficult to predict and could cause our operating results to fall below market expectations or guidance we may provide.

Our operating results and key metrics may fluctuate due to a variety of factors, many of which are outside of our control. As a result, comparing our operating results on a period-to-period basis may not be meaningful. Our past results should not be relied on as an indication of our future performance. If our revenue or operating results fall below the expectations of investors or research analysts that may cover us in the future, or below any guidance we may provide to the market, the price of our Class A common stock could decline substantially.

Our operating results have varied in the past and are expected to continue to do so in the future. In addition to other risks and uncertainties discussed in this “Risk Factors” section, factors that may affect our quarterly operating results, business and financial condition include the following:

 

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failure to successfully manage or integrate any acquisitions;

 

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demand for our services;

 

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failure to recruit or retain talent or key personnel;

 

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market acceptance of our current and future services;

 

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changes in the competitive dynamics of the professional services industry;

 

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our ability to control and predict costs, including our operating expenses;

 

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the impact of non-cash expenses, such as the equity-based compensation and restructuring expenses described in the section titled “Management’s Discussion and Analysis of Results of Operation and Financial Condition”;

 

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our revenue mix in a particular quarter;

 

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the seasonality of our business;

 

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the timing and size of new engagements;

 

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timing of client payments;

 

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the outcome or publicity surrounding any pending or threatened lawsuits or professional licensing organization disciplinary action;

 

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general economic and political conditions;

 

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changes in the legal or regulatory environment; and

 

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unexpected events, including those resulting from climate change, public health emergencies, international or civil conflicts and wars, terrorism, tariffs or other trade actions, or other geopolitical events.

Based upon the factors described above and those described elsewhere in this “Risk Factors” section, we have a limited ability to forecast the amount and mix of future revenue and expenses, which may cause our operating results to fall below any guidance we may provide to the market or the expectations of investors in the future. Fluctuations in our quarterly operating results could limit or prevent investors from readily selling their shares and may otherwise negatively affect the market price and liquidity of our Class A common stock. In addition, in the past, when the market price of a stock has been volatile, holders of that stock have sometimes instituted securities class action litigation against the company that issued the stock. If any of our shareholders brought a lawsuit against us, we could incur substantial costs defending the lawsuit. Such a lawsuit could also divert the time and attention of our management away from our business, which could significantly harm our profitability and reputation.

Our business activity and associated revenue is subject to seasonality, which could result in fluctuations in the market price of our Class A common stock.

Historically, our business activity and associated revenue has been highest in our first and third quarters, primarily driven by our tax services offerings. We expect that this seasonality will continue to be a factor in our results of operations and may reduce our ability to predict our cash flows and optimize the timing of our operating expenses. Additionally, our revenue in any given period is dependent on the number of fee-paying clients in such period and the size of engagements on which we are advising. As a result, we believe that comparisons of our results of operations between different quarters within a single fiscal year are not necessarily meaningful and that these comparisons cannot be relied upon as indicators of our future performance. In the event that any fluctuations in our revenue and results of operations result in our failure to meet our forecasts, or the forecasts of research analysts that may cover us in the future, the market price of our Class A common stock could fluctuate or decline.

Any future international expansion will subject us to additional costs and risks and our plans may not be successful.

Currently, we only have offices in the United States, and historically the vast majority of our revenue has been derived from U.S. clients. Further expansion into markets outside the United States is one of our key long-term strategies for the future growth of our business. There are, however, significant costs and risks inherent in providing our current or future services in international markets, including failure to effectively establish and maintain our brand and reputation; time and difficulty in building and maintaining a widespread client network;

 

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increased costs, including compliance costs; potentially lower margins in some regions; potentially longer collection cycles in some regions; increased competition from local or regional providers of similar services; compliance with foreign laws, regulations and professional licensing rules, including taxes and enhanced privacy laws, rules and regulations; establishing and maintaining effective internal controls at foreign locations and the associated increased costs; the uncertainty of protection for intellectual property rights in some countries and practical difficulties of enforcing rights abroad; compliance with applicable anti-bribery, anti-corruption, sanctions, and anti-money laundering laws; currency exchange rate fluctuations and related effects on our results of operations; socioeconomic, labor or political instability in foreign economies and markets; compliance with tax, employment, immigration, and labor laws for employees living or traveling abroad; tariffs and trade actions; and other costs and risks of doing business internationally.

These and other factors could harm any future international operations and, consequently, our business, results of operations, and financial condition. Further, we may incur significant operating expenses as a result of any planned international expansion, and it may not be successful. We have limited experience with regulatory environments and market practices internationally, and we may not be able to penetrate or successfully operate in new markets. We also have limited operating experience outside of the United States and in our expansion efforts we may encounter obstacles we do not face in the United States, including cultural and linguistic differences; differences in regulatory environments, labor practices and market practices; differences in professional licensing rules; difficulties in keeping abreast of market, business and technical developments; and preferences of foreign clients. We may also encounter difficulty expanding into international markets because of limited brand recognition, leading to delayed or limited acceptance of our services in these markets and increased marketing costs to establish our brand. Accordingly, if we are unable to successfully expand internationally, our financial condition and results of operations could be harmed.

If we fail to continue to benefit from our existing business relationships and fail to establish new relationships in the future, our results of operations could be adversely affected.

Our success depends, in part, on continuing to benefit from our existing business relationships, including experienced professionals within the Andersen Global network, former clients and third-party vendors, as well as our existing client relationships. We depend on referrals within Andersen Global to attract new clients and to connect existing clients with experienced professionals outside the United States when the need arises. We also obtain many of our new engagements from former or current clients, or from referrals by those clients, and may increasingly depend on third-party service providers to support the infrastructure needed to effectively run and grow our business. We also plan to continue expanding our relationships with existing clients, including by offering additional services across our platform such as in connection with a potential expansion of our relationship with Andersen Consulting. If we fail to continue to benefit from these existing relationships, or fail to establish and maintain new relationships in the future, our results of operations could be adversely affected.

We are dependent on our existing client base and our ability to retain and expand our relationships with such clients. Our clients may terminate our engagements with little or no notice and without penalty, which may result in unexpected declines in our revenue or unexpected costs.

Our ability to maintain continuing relationships with our clients and successfully obtain payment for our services is essential to the growth and profitability of our business. However, the volume of work performed for any specific client is likely to vary from year to year, and we generally do not have long-term commitments from clients to use our services. A client in one year may not provide the same level of revenue for us in any subsequent year. Further, one or more of our clients could be acquired, and there can be no assurance that the acquirer would choose to use our services in respect of such client to the same degree as previously, if at all. In addition, the services we provide to our clients, and the revenue and income from those services, may decline or vary as the type and quantity of services we provide changes over time. Our business model also depends on relationships our teams develop with our clients so that we can understand our clients’ needs and deliver services that are tailored to those needs. If a client is not satisfied with the quality of work performed by us, or with the

 

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services delivered, we could incur additional costs to address the situation, the profitability of that work might be impaired, and the client’s dissatisfaction with our services could damage our ability to obtain additional work from that client. In particular, clients that are not satisfied might seek to terminate existing contracts, which could mean that we could incur costs for the services performed with no associated revenue. This could also direct future business to our competitors.

We may also fail to assess the creditworthiness of our clients adequately or accurately. Our clients’ ability to terminate engagements with little or no notice, and our clients’ inability or unwillingness to pay for services we performed, can make our future revenue and profitability difficult to predict. Although a substantial majority of our revenue is generated from clients who also contributed to our revenue during the prior year, our engagements with our clients are typically for engagements that are singular in nature. Therefore, we must seek to obtain new engagements when our current engagements end.

The engagement letters that we typically enter into with clients do not obligate them to continue to use our services. Termination, non-renewal, delay or renegotiation of an engagement could cause us to experience a higher-than-expected number of unassigned employees and thus compress our margins until we are able to reallocate our headcount. Clients that delay payment, request modifications to their payment arrangements, or fail to meet their payment obligations to us could increase our cash collection time, cause us to incur bad debt expense, or cause us to incur expenses in collections actions. If we are unable to replace clients or revenue as engagements end, or if clients unexpectedly cancel engagements with us or curtail the scope of our engagements and we are unable to replace the revenue from those engagements, eliminate the costs associated with those engagements or find other engagements to utilize our professionals, our financial results could be materially adversely affected.

Volatile, negative or uncertain economic and geopolitical conditions could adversely affect our business and materially reduce our revenue.

Global macroeconomic and geopolitical conditions can affect certain of our service offerings and our clients’ businesses. Volatile, negative and uncertain economic and geopolitical conditions have in the past undermined and could in the future cause our clients to reduce or defer their spending on new initiatives, resulting in clients reducing, delaying or eliminating spending under existing engagements, particularly in our mergers and acquisitions, or M&A, transactions services and other commercial service offerings involving transactional or operational initiatives, which would negatively affect our business.

We are not able to predict the positive or negative effects that future events or changes to the U.S. or global economies or political landscapes will have on our business, any particular service offerings, or any of our clients. These events and changes include fluctuations in U.S. and/or global economies, including economic downturns or recessions and the strength and rate of any general economic recoveries; the condition of the U.S. or global financial markets and the availability, costs, and terms of credit and credit modifications, including interest levels and inflationary pressures; levels of M&A activity; new and complex laws and regulations, repeals of existing laws and regulations or changes of enforcement of laws, rules and regulations; other economic, geographic or political factors; public health crises; tariffs and trade actions; the effects of climate change; and general business or other conditions. For example, the current U.S. administration has expressed strong concerns about imports from countries that it perceives as engaging in unfair trade practices, and has imposed tariffs or other restrictions on products, components or raw materials sourced from those countries. Moreover, these new tariffs, or other changes in U.S. trade policy, have triggered and may in the future trigger retaliatory actions by affected countries, including reciprocal tariffs, including the possibility of tariffs on services.

Any of these events or changes, as well as other events outside our control, may have adverse effects on one or more of our service offerings or our clients’ businesses or industries. Ongoing economic and geopolitical volatility and uncertainty and changes in client demands affect our business in a number of other ways, including making it difficult to accurately forecast client demand and revenue. Changing demand patterns and their impact on us and our clients could have a significant negative impact on our results of operations.

 

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Global inflationary pressures have in the past increased and may in the future increase the prices of goods and services, which could raise the costs associated with providing our services, diminish our ability to compete for new clients, and/or reduce willingness of new or existing clients to fully utilize our services.

For a variety of reasons, including geopolitical factors, the global economy in which we operate has faced, and may continue to face, heightened inflationary pressure, impacting the cost of doing business. These inflationary pressures have been and could continue to be exacerbated by geopolitical turmoil and economic policy actions, including new or increased tariffs, and the duration of such pressures is uncertain. In the future, adjustments to our fee structure may be insufficient to counter inflationary cost pressures, which may result in significant cost overruns on our engagements or an unwillingness of clients to fully utilize our services. To the extent that inflationary pressure affects our cost of revenue and general overhead, we may face the choice of raising the rates we charge for our services to try and maintain our margins or reduce or maintain our price structure to generate business. This could result in reduced profitability, or even losses, as inflation increases and therefore could adversely affect our financial results.

War, terrorism, other acts of violence or natural or man-made disasters may affect the markets in which we operate in the future and our ability to service our clients.

Our business may be negatively affected by instability, disruption or destruction in the geographic regions where we operate or by volatile conditions worldwide. War, terrorism, riot, civil insurrection or social unrest, man-made and natural disasters, and pandemics, communicable disease outbreaks and other regional or global health crises, may cause clients to delay their decisions on spending for our services. Our business continuity and disaster recovery plans may not be effective at preventing or mitigating the effects of any such disasters, particularly in the case of simultaneous or catastrophic events. These events pose significant security risks to our people, the facilities where they work, our operations, electricity and other utilities, communications, travel, and network services, and the disruption of any or all of them could adversely affect our ability to service our clients and materially adversely affect our financial results.

Payments by clients against open accounts receivable may be slower than expected, and we may face risks of fee non-payments, which could result in loss of engagements, fee write-offs, and reduced revenue.

Professional services firms like ours often experience higher average accounts receivable days outstanding compared to many other industries, which may be magnified if the general economy worsens. If our collections become slower, our liquidity may be adversely impacted. We monitor the aging of receivables regularly and make assessments of the ability of our clients to pay amounts due. We provide for potential bad debts and recognize additional reserves against bad debts as we deem it appropriate. Notwithstanding these measures, our clients may face unexpected circumstances that adversely impact their ability to pay their obligations to us and we may face unexpected losses as a result.

We typically do not receive a retainer before we begin performing services for a client. In the cases where we have received retainers, we cannot assure the retainers will adequately cover our fees for the services we perform on behalf of these clients. In some cases, we have pre-bill arrangements with clients, and the decline of client acceptance of these arrangements could result in a longer accounts receivable cycle. Additionally, from time to time we receive requests to discount our fees or to negotiate lower rates for our services and to agree to terms that may limit the size of an engagement or our ability to pass-through costs to our clients. We consider these requests on a case-by-case basis. We routinely receive these types of requests and expect this to continue in the future. In addition, our clients and prospective clients may not accept billing rate increases that we put into effect or implement in the future. Fee discounts, pressure not to increase or pressure to decrease our rates, and less advantageous contract terms could result in the loss of clients, lower revenue and operating income, higher costs and less profitable engagements. More discounts or write-offs than we expect in any period would have a negative impact on our results of operations. There is no assurance that significant client engagements will be renewed or replaced in a timely manner or at all, or that they will generate the same volume of work or revenue or be as profitable as past engagements.

 

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We could be subject to reputational and legal risk arising from, among other things, actual or perceived conflicts of interest.

We face the possibility of an actual, potential or perceived conflict of interest where we represent a client on a transaction in which an existing client is a party. We may be asked by two potential clients to act on their behalf on the same transaction, including by two clients as potential buyers in the same acquisition transaction. In each of these situations, we face the risk that our current policies, controls and procedures may not timely identify or appropriately manage such conflicts of interest. It is possible that actual, potential or perceived conflicts could give rise to client dissatisfaction or litigation. Appropriately identifying and managing actual or perceived conflicts of interest is complex and difficult, and our reputation could be damaged if we fail, or appear to fail, to deal appropriately with one or more potential or actual conflicts of interest. This risk could increase as we expand our service offerings, particularly if we begin providing legal advice and become subject to the professional licensing rules and ethical requirements related to those services. Reputational risk or litigation arising from conflicts of interest could have a material adverse effect on our reputation which could materially adversely affect our business in a number of ways, including a reluctance of some potential clients to engage our services.

From time to time we decide that we cannot or should not accept an engagement from an existing or prospective client or represent multiple clients in connection with the same or competitive engagements. In addition, upon occasion, we decide that we should or must resign from a client engagement. Such decisions may negatively impact our revenue, growth and financial results. While we follow internal practices to assess real and potential issues in the relationships between and among our clients, engagements, services and professionals, such concerns cannot always be avoided.

The estimates of market opportunity included in this prospectus and our ability to capture a meaningful share of this market may prove to be inaccurate, and even if the market in which we compete achieves the forecasted growth, our business could fail to grow at similar rates, if at all.

Our estimates of market opportunity and forecasts of market growth included in this prospectus, and our ability to capture a meaningful share of this market, may prove to be inaccurate. Market opportunity estimates and growth forecasts are subject to significant uncertainty and are based on assumptions and estimates that may not prove to be accurate. The variables that affect the calculation of our market opportunity are also subject to change over time.

We cannot assure you that any particular number or percentage of service offerings, clients or industries covered by our market opportunity estimates will purchase our services at all or generate any particular level of revenue for us. In addition, any expansion in our market opportunity depends on a number of factors, including the cost, performance and perceived value associated with our service offerings and those of our competitors. Even if the market in which we compete meets the size estimates and growth we forecast, our business could fail to achieve a substantial share of this market or grow at a similar rate, if at all. Our growth is subject to many risks and uncertainties. Accordingly, the estimates of market opportunity or forecasts of market growth we have made and may make should not be taken as indicative of our future growth.

Risks Related to Government Regulation

Government regulations, interpretations and fiscal, regulatory and other policies are subject to changes, which could impact our clients and materially reduce our revenue.

Changes in laws and regulations, or the interpretation and application thereof, as well as fiscal, regulatory and other policies, could result in changes in the amount or the type of services required by businesses and individuals, as well as our operations. Any changes in law, as well as regulations and policies, including by means of legislative changes and/or executive orders, could affect us or our clients in substantial and unpredictable ways. For example, California has recently adopted two climate-related laws, which require

 

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companies doing business in California that meet certain revenue thresholds to publicly disclose certain greenhouse gas emissions data and climate-related financial risk reports. Compliance with requirements such as these, if and when applicable to us, may be time-consuming and resource-intensive and may require us to hire or retain additional personnel or consultants and to implement additional controls. Our business may face increased scrutiny, including from investors and clients, related to these activities and our related disclosures and compliance efforts. We cannot be sure that future laws, regulations and policies, or the interpretation and application thereof, will provide the same or similar opportunities for us to provide our services to current or potential clients, or to meet our operational, financial and strategic objectives. Additionally, extensive and evolving regulation to which our clients are subject, including changes in tax laws, regulations and interpretations thereof, could increase potential risk of omissions, errors or other compliance failures, which could increase our costs and may result in claims against us.

Changes to tax laws, rules and regulations could impact our clients, decrease demand for our services, and materially reduce our revenue, and such changes, along with examinations of our tax returns, may negatively impact our effective tax rate and financial results and increase our cash tax payment obligations.

Significant changes to tax laws, rules and regulations, and, in particular, a radical simplification of tax laws, rules and regulations, could impact our clients, decrease demand for our services and negatively impact our business. In addition, changes to tax laws, rules and regulations could negatively affect our reported financial results and increase our cash tax payment obligations, including by reason of changes that increase tax rates, eliminate or reduce deductions, or affect the utility or value of deferred tax assets or liabilities. We cannot predict future changes in the tax laws, regulations, administrative guidance or judicial decisions to which we are subject or that could apply to our clients or our business.

In addition, as our business continues to grow and if we become more profitable, our tax obligations could significantly increase. Additionally, from time to time in the normal course of business we may be subject to audit by the tax authorities. Such tax authorities may disagree with tax positions we take, and if any such tax authority were to successfully challenge any such position, this may adversely affect our effective tax rate, tax payments or financial condition.

We and the third parties with whom we work are subject to stringent and evolving U.S. and foreign laws, regulations, and rules, contractual obligations, industry standards, policies and other obligations related to data privacy and security. Actual or perceived failure to comply with such obligations could harm our business.

In the ordinary course of business, we collect, receive, store, process, generate, use, transfer, disclose, make accessible, protect, secure, dispose of, transmit, and share (collectively, process) personal data and other sensitive information, including proprietary and confidential business data, trade secrets, intellectual property, sensitive third-party data, and other sensitive data, for example such as business plans, transactions and financial information. Our data processing activities subject us to numerous data privacy and security obligations, such as various laws, regulations, guidance, industry standards, external and internal privacy and security policies, contractual requirements, and other obligations relating to data privacy and security.

U.S. and non-U.S. governmental authorities have proposed or adopted or are considering proposing or adopting data security and/or data privacy statutes or regulations. Numerous U.S. states have enacted comprehensive privacy laws that impose certain obligations on covered businesses, including providing specific disclosures in privacy notices and affording residents with certain rights concerning their personal data. As applicable, such rights may include the right to access, correct, or delete certain personal data, and to opt-out of certain data processing activities, such as targeted advertising, profiling, and automated decision-making. The exercise of these rights may impact our business and ability to provide our products and services. Certain states also impose stricter requirements for processing certain personal data, including sensitive information, such as

 

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conducting data privacy impact assessments. These state laws allow for statutory fines for noncompliance. For example, the California Consumer Privacy Act of 2018 (CCPA) applies to personal data of consumers, business representatives, and employees who are California residents, and requires businesses to provide specific disclosures in privacy notices and honor requests of such individuals to exercise certain privacy rights. The CCPA provides for fines and allows private litigants affected by certain data breaches to recover significant statutory damages.

Several countries have established specific legal requirements for cross-border data transfers and governmental authorities and privacy advocates around the world continue to propose new regulatory actions concerning data protection. For example, the General Data Protection Regulation (GDPR) regulates the collection, use, and retention of personal information in the EU. In addition, the evolution of global privacy treaties and frameworks has created compliance uncertainty and increased complexity, and client sensitivity to privacy continues to increase. Moreover, several jurisdictions are considering regulatory frameworks for AI that implicate data protection laws.

Each of these privacy, security and data protection requirements imposes limitations on us, some of which could be significant, requires changes to our business practices, requires notification to clients or employees of a security incident, restricts our use or storage of personal information, possibly limits our use of third-party tools and vendors, or could cause changes in client behavior that may make our services more costly or less efficient, causing clients to become less likely to enter into engagements with us and may harm our future financial results. Additionally, any actual or alleged noncompliance with these laws and regulations, or failure to meet client expectations would result in negative publicity or harm to our reputation and subject us to investigations, claims or other remedies, including demands that we modify or cease existing business practices, and expose us to significant fines, penalties and other damages. We have experienced data security incidents in the past, and while none of these have had a material impact on our business, we cannot guarantee that there will not be any material security incidents in the future. The increased emphasis on information security and the requirements to comply with applicable data security and privacy standards and protocols imposed by law, regulation, industry standards and contractual obligations has increased, and could continue to increase, our related costs of doing business and could adversely impact our financial results.

Additionally, under various privacy laws and other obligations, we may be required to obtain certain consents to process personal data. For example, some of our data processing practices may be challenged under wiretapping laws, if we obtain consumer information from third parties through various methods, including chatbot and session replay providers, or via third-party marketing pixels. These practices may be subject to increased challenges by class action plaintiffs. Our inability or failure to obtain consent for these practices could result in adverse consequences, including class action litigation and mass arbitration demands.

We are subject to the FCPA, other applicable anti-corruption, anti-bribery laws, and trade control laws. Compliance with these laws requires significant resources, may impact our ability to service clients in certain countries in the future, and non-compliance may result in civil or criminal penalties and other remedial measures.

We are subject to the U.S. Foreign Corrupt Practices Act (FCPA) and other anti-bribery and anti-corruption laws in the countries in which we conduct activities. Anti-corruption and anti-bribery laws prohibit companies and their employees, agents, contractors, and other intermediaries from authorizing, promising, offering, or providing, directly or indirectly, improper payments or anything else of value to recipients in the public or private sector. Some of our client relationships outside of the U.S. are with governmental entities and are therefore subject to such anti-bribery laws. In addition, we are subject to U.S. and other applicable trade control laws, including export and import controls and trade sanctions, such as the U.S. sanctions regulations administered by the U.S. Department of the Treasury’s Office of Foreign Assets Controls, which may prohibit or restrict the sale or supply of certain products and services to certain governments, persons, entities, countries, and territories, including those that are the target of comprehensive sanctions.

 

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Our compliance program contains controls and procedures designed to ensure our compliance with the FCPA and other anti-corruption, anti-bribery, and trade control laws and regulations. The continuing implementation and ongoing development and monitoring of our compliance program may be time consuming, expensive, and could result in the discovery of compliance issues or violations by us or our employees of which we were previously unaware.

Any violations of these or other laws, regulations and procedures by our employees or agents, including companies we acquire, could expose us to administrative, civil or criminal penalties, fines or business restrictions, which could have a material adverse effect on our results of operations and financial condition and would adversely affect our reputation.

The SEC oversees and directly regulates the activities of our subsidiary that is a registered investment advisor under the Advisers Act.

Our subsidiary, Andersen Tax LLC, is registered with the SEC as an investment advisor under the U.S. Investment Advisers Act of 1940 (the Advisers Act). Our SEC-registered investment advisor subsidiary is subject to the requirements and regulations of the Advisers Act that include anti-fraud provisions, upholding fiduciary duties to advisory clients, maintaining an effective compliance program, managing conflicts of interest, record-keeping and reporting requirements, and disclosure requirements. In addition, our registered investment advisor subsidiary is subject to routine periodic and other examinations by the staff of the SEC. The Advisers Act generally grants the SEC broad administrative powers, including the power to limit or restrict an investment advisor from conducting advisory activities if it fails to comply with federal securities laws. Additional sanctions that may be imposed for failure to comply with applicable requirements include the prohibition of individuals from associating with an investment advisor, the revocation of registrations and other censures and fines. Any adverse findings resulting from such examination may result in administrative enforcements or significant reputational harm. Failure to comply with the obligations imposed by the Advisers Act could result in investigations, sanctions, restrictions on the activities of us or our personnel and reputational damage.

Our failure or alleged failure to comply with all applicable laws and regulations may damage our reputation, cause us to lose employees or clients, result in legal liability, and have a material adverse effect on our business and results of operations.

Our business is subject to regulation and oversight by governmental authorities. The laws and regulations governing our operations, and interpretations of those laws and regulations, are increasing in number and complexity, change frequently and can be inconsistent or conflict with one another. Our ability to conduct our business may be adversely affected as a result of any new requirements imposed by any governmental authorities that have jurisdiction over us. We may be adversely affected by changes in the interpretation or enforcement of existing laws and rules by these governmental authorities. Our failure to comply with applicable laws or regulations could result in adverse publicity and reputational harm as well as fines and suspensions of personnel, could cause us to lose clients, and could impair the retention or recruitment of employees or our ability to attract future acquisition targets.

Risks Related to Information Technology, Infrastructure and Intellectual Property

Rapid technological changes, including the widespread adoption of AI, could significantly impact our competitive position, client relationships and results of operations.

The professional services industry has been and continues to be impacted by significant technological changes and innovation. Those technological changes may reduce demand for our services, enable or accelerate the development of competitive products or services, or enable our current clients to reduce or bypass the use of our services. Additionally, rapid changes in AI, block chain-based technology, automation and related innovations are increasing the competitiveness landscape. We may not be successful in anticipating or

 

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responding to these changes and demand for our services could be further reduced by advanced technologies being deployed by our competitors, many of whom have greater resources than we do. Risks related to AI, including our use of third-party products incorporating AI, include the generation of factually incorrect or biased results, also known as hallucinations, data security vulnerabilities, potential IP infringement, and mishandling of confidential information. Poor implementation of new technologies, including AI, by us or our third-party service providers or technology vendors, could subject us to additional risks we cannot adequately mitigate, which could have a negative impact on our results of operations and financial condition.

Our ability to anticipate developments in our industry, enhance our existing service offerings, develop and introduce new service offerings, and keep pace with changes and developments are critical to meeting changing client needs and expectations. Our ability to keep pace with, anticipate or respond to changes and developments is subject to a number of risks, including that:

 

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we may not be able to develop new, or update existing services, applications, tools and software quickly or inexpensively enough to meet our clients’ needs and expectations;

 

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it may be difficult or costly to make existing software work effectively and securely with new or changed operating systems or protocols;

 

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it may be difficult or costly to update existing software or develop new services to keep pace with evolving industry standards, methodologies, technologies, and regulatory developments at a pace and cost that is acceptable to our clients; and

 

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we may find it difficult to deliver high-quality client services consistently with new technologies and methodologies.

Technological developments may materially affect the nature of how we generate revenue. Some of these technological developments may reduce or replace, in whole or in part, the need for some of our services, which may cause clients to reduce or delay spending under existing engagements, delay entering into new engagements, or result in increased pricing pressure for our offerings. Such technological developments and spending delays or reductions can negatively impact our results of operations if we are unable to introduce new pricing models that reflect the value of these technological developments or if the pace and level of spending on new technologies are not sufficient to make up any revenue shortfall. The effort to gain technological expertise and develop new technologies in our business has required and may continue to require us to incur significant expenses. We may not be successful in anticipating or responding to these developments in a timely manner, or if we do respond, the services, products, technologies or methodologies we develop or implement may not be successful or competitive. Further, services, products, technologies or methodologies that our competitors develop may render our services non-competitive or obsolete. Our failure to enhance our existing services and to develop and introduce new services to promptly and effectively address the needs of our clients could have a material adverse effect on our business.

If we are unable to keep pace with the adoption and use of generative AI technology in our business and effectively implement generative AI, we could become less competitive in our industry.

We expect that we will need to integrate generative AI into our business to remain competitive in a rapidly evolving market. Generative AI is a type of AI that can take different types of inputs (such as text, image, audio, video, code, etc.) and generate new content using a variety of different modalities and based on a sophisticated and advanced set of rules. We expect to continue to make significant investments to build and support AI capabilities, either by developing proprietary technology or licensing the use of such technology, so that we can meet the needs of our clients and remain competitive, but there can be no assurance that our efforts will be successful or that we will be able to recoup the costs of such investments. If we are unable or slow to develop, license third-party or open source, adopt, and deploy generative AI technologies in our business, our competitiveness will suffer.

 

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Generative AI technologies could disrupt the significant effort we put into identifying, recruiting, hiring, retaining, and efficiently utilizing our professionals and our ability to charge for their services. Our clients have asked, and may come to expect that we use generative AI to work on certain engagements for them at comparatively lower costs than human personnel. As we plan, develop, and implement changes to our business to balance those services that can only be performed by humans against those that can be performed by generative AI, we may have insufficient or excess personnel than required to meet client demand, and employee morale and our firm culture could suffer. Additionally, clients may be unwilling to pay rates for human personnel if they perceive that the same services can be performed by less expensive generative AI, and may seek other service providers or price concessions to retain their business, which could adversely affect our financial results.

Our use of generative AI tools may pose risks to our business and could subject us to legal liability.

We expect to use generative AI tools in the future. Using generative AI tools to produce content that can be indistinguishable from that generated by humans is a relatively novel development, with many of the benefits, risks and liabilities still unknown. Recent decisions of the U.S. Copyright Office suggest that we would not be able to claim copyright ownership in any text, images, or other materials that we develop through use of generative AI tools, and the availability of such protections in other countries is unclear. As a result, we could have no remedy if third parties reused those same materials, or similar materials also generated by AI tools.

We may face claims from third parties claiming infringement of their intellectual property rights or non-compliance with open source software or other license terms. We could also be subject to claims from providers of generative AI tools if, for example, we use any of the generated materials in a manner inconsistent with their terms of use. Any of these claims could result in legal proceedings and could require us to purchase a costly license, comply with the requirements of open source software license terms, or limit or cease using the implicated software, or other materials or content. Our use of generative AI tools may also present additional security risks because the generated source code may have been modeled from publicly available code, which may make it easier for hackers and other third parties to determine how to breach our systems that rely on the code. Any of these risks could be difficult to eliminate or manage, and, if not addressed, could have a material adverse effect on our business, results of operations, financial condition and future prospects.

We may face legal, reputational and financial risks relating to cybersecurity incidents or attacks affecting us. If our information technology systems, or those of third parties with whom we work, are compromised, we could face legal, reputational and financial risks, and the failure to protect our or any of our clients’ information against misuse or disclosure could materially and adversely harm our reputation and our business.

Our systems are vulnerable to cybersecurity risks, and we are subject to potential disruption caused by such activities. We are subject to and routinely face cyber-based attacks and attempts by hackers and similar unauthorized users to gain access to or corrupt our information technology systems. Such attacks may have various goals, from seeking confidential information to causing operational disruption. We cannot assure you that we will not experience material disruptions or suffer material adverse effects in the future. Any future significant violations of our data security or privacy would result in serious consequences the loss of business, litigation, regulatory investigations, penalties, and expenses, any of which could damage our reputation and adversely affect the growth of our business. While we have deployed resources that are responsible for maintaining what we consider to be appropriate levels of cybersecurity, and while we utilize third-party technology products and services to help identify threats and protect our information technology systems and infrastructure against security breaches and cyber-incidents, we do not believe such resources, products or services can provide absolute protection against all potential risks and incidents. These measures may not be adequate or effective to prevent, identify, or mitigate attacks by hackers, foreign governments, or other actors or breaches caused by human error, malfeasance, or other disruptions. For example, cyber-attacks, malicious internet-based activity, online and offline fraud, and other similar activities threaten the confidentiality, integrity, and availability of our sensitive information and information technology systems, and those of the third parties with whom we work.

 

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Such threats are prevalent and continue to rise, are increasingly difficult to detect, and come from a variety of sources, including traditional computer “hackers,” threat actors, “hacktivists,” organized criminal threat actors, personnel (such as through theft or misuse), sophisticated nation states, and nation-state-supported actors.

We and the third parties with whom we work are subject to a variety of evolving threats, including but not limited to social-engineering attacks (including through deep fakes, which may be increasingly more difficult to identify as fake, and phishing attacks), malicious code (such as viruses and worms), malware (including as a result of advanced persistent threat intrusions), denial-of-service attacks, credential stuffing attacks, credential harvesting, personnel misconduct or error, ransomware attacks, supply-chain attacks, software bugs, server malfunctions, software or hardware failures, loss of data or other information technology assets, adware, telecommunications failures, earthquakes, fires, floods, attacks enhanced or facilitated by AI, and other similar threats.

In particular, severe ransomware attacks are becoming increasingly prevalent and can lead to significant interruptions in our operations, ability to provide our products or services, loss of sensitive data and income, reputational harm, and diversion of funds. Extortion payments may alleviate the negative impact of a ransomware attack, but we may be unwilling or unable to make such payments due to, for example, applicable laws or regulations prohibiting such payments.

We are also dependent on security measures that some of our third-party data storage, software as a service, or cloud vendors and clients are taking to protect their own systems and infrastructures. There can be no assurance that we will not experience material disruptions or suffer material adverse effects in the future if our third-party vendors do not maintain adequate security measures, do not require their sub-contractors to maintain adequate security measures, do not perform as anticipated and in accordance with contractual requirements, or become targets of cyber-attacks.

In providing services to clients, we often manage, utilize and store sensitive or confidential client or other third-party data, including personal data and proprietary information. Maintaining the confidentiality of proprietary, confidential and trade secret information is critical to maintaining the trust of our clients, the success of our business and the reputation of our company. Our systems, which include those of third parties on whom we rely, can fail or may not operate properly or become disabled as a result of network security failures. We are dependent on information technology networks and systems to securely process, transmit and store electronic information and to communicate with our people, clients, and vendors. As the breadth and complexity of this infrastructure continues to grow, including as a result of the increasing reliance on, and use of, mobile technologies, social media and cloud-based services, and as cyberattacks become increasingly sophisticated, we expect the risk of security incidents and cyberattacks to continue to increase.

Threat actors may leverage emerging AI technologies to develop new hacking tools and attack vectors, exploit vulnerabilities, obscure their activities, and increase the difficulty of threat attribution. Such incidents could lead to shutdowns or disruptions of or damage to our systems and those of our clients and vendors, and unauthorized disclosure of sensitive or confidential information, including personal data and proprietary business information. Such attacks, if successful, could harm our reputation, disrupt our or our clients’ business operations, cause us to incur unanticipated losses or expenses, result in unauthorized disclosures of confidential or proprietary information, cause us to lose clients and result in significant financial exposure and legal liability. Similarly, unauthorized access to or through, denial of access to, downtime or other incidents involving, our systems and third-party data storage, software as a service, or cloud vendors, could result in negative publicity, significant remediation costs, legal liability, and damage to our reputation, and could have a material adverse effect on our results of operations.

Cybersecurity threats are constantly expanding and evolving, and are becoming increasingly sophisticated and complex, increasing the difficulty and cost of detecting and defending against them and of maintaining effective security measures and protocols. There is no certainty that we or the third-party vendors on whom we

 

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rely can maintain the confidentiality or prevent the misuse of our own or our clients’ information, or mitigate related damages. If we fail to effectively protect our clients’ or our own confidential or proprietary information from disclosure or misuse, our financial results and our reputation would be adversely affected.

Our engagements may not contain limitations of liability, and even where they do, there can be no assurance that these are sufficient to protect us from liabilities, damages, or claims related to our data privacy and security obligations. Further, we cannot be sure that our insurance coverage will be adequate or sufficient to protect us from or to mitigate liabilities arising out of our privacy and security practices, that such coverage will continue to be available on commercially reasonable terms or at all, or that such coverage will pay future claims. In addition to experiencing a security incident, third parties may gather, collect, or infer sensitive information about us from public sources, data brokers, or other means that reveals competitively sensitive details about our organization and could be used to undermine our competitive advantage or market position.

A significant failure in our systems, telecommunications or IT infrastructure, or those of our data storage, software as a service, or cloud vendors, could disrupt our ability to perform our services or otherwise disrupt our business, which could result in a reduction of our revenue.

Our business relies on maintaining well-functioning voice and data communications, online resource management, financial, billing, timekeeping and operational record management, and client service and data processing systems. Delays in modernizing any of our information systems, whether in-house or provided by any of our third-party data storage, software as a service, and cloud vendors, or failure of any such system to work properly, could require us to expend substantial time, effort and costs to adjust our processes, implement changes or corrections, or repair or replace such systems, in order to carry out our operations, including the preparation of our financial statements. Additionally, our business activities may be materially disrupted in the event of a partial or complete failure of any of these technologies, which could be due to software malfunction, computer virus attacks, conversion errors due to system upgrades, damage from flood or fire, earthquake, power loss, telecommunications failure, human error, insider theft or misuse, technical malfunctions, unauthorized entry, hackers, ransomware, terrorism or war, demands placed on internet infrastructure by growing numbers of users and time spent online, increased bandwidth requirements or other events beyond our control. Such events could result in interruptions in service to our clients, damage to our reputation, harm to our client relationships, and reduced revenue and profitability.

Although we have disaster recovery procedures in place and insurance to protect against such contingencies, we cannot be sure that insurance or these services will continue to be available, cover all our losses or compensate us for the possible loss of clients occurring during any period that we are unable to provide business services. Additionally, our crisis management procedures, business continuity plans and disaster recovery capabilities may not be effective at preventing or mitigating the effects of such disruptions, particularly in the case of a catastrophic event. Loss of all or part of our IT infrastructure or systems for a period of time could hinder our performance or our ability to complete client projects on time which, in turn, could cause us to lose clients, lead to a reduction in revenue or otherwise materially adversely affect our business and reputation.

If we or our consolidated subsidiaries or licensees are unable to protect or enforce our trademark rights, our business could be adversely affected.

We believe that developing and maintaining our brand is critical to achieving widespread acceptance of our services and is an important element in attracting new clients, employees and potential acquisition targets, and retaining existing clients. We rely on our brand names, trademarks, trade names and service marks to distinguish our business and services from our competitors. If we or our consolidated subsidiaries or licensees are unable to adequately protect our brand, trademarks and related intellectual property rights, third parties may use brand names or trademarks similar to ours in a manner that may cause confusion or dilute our brand or trademarks, which could decrease the value of our brand. We may face uncertainties regarding the ownership, validity, and enforceability of certain trademarks that we use. For example, we have acquired certain trademarks, but we

 

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cannot guarantee that the assignors of those trademarks had a valid and enforceable right to these trademarks to assign to us. Further, in cases where our trademarks have been used by licensees, we may not have exercised sufficient quality control over their use of the marks.

If we do enforce our trademarks and our other intellectual property rights through litigation, we may not be successful and the litigation may result in substantial costs and diversion of resources and management attention. In the event that our trademarks are successfully challenged, the legal challenges may result in substantial costs, failure of pending trademark applications to mature to registration, cancellation of existing trademark registrations, monetary damages, and injunctions pursuant to which we could be forced to rebrand the affected services and solutions, which could result in loss of brand recognition and could have a material adverse impact on our business.

We are subject to risk as it relates to software that we license or cloud-based software that we subscribe to from third parties.

We rely on third-party service providers for certain aspects of our businesses, including third-party data storage, software as a service, and cloud vendors, to host applications and for key financial and operational systems, and we expect to expand their use in the future. Operational risks could increase as such vendors increasingly offer mobile and cloud-based software services, as certain aspects of the security of such technologies may be complex, unpredictable or beyond our control. While we conduct due diligence on these providers with respect to their security and business controls, if these controls do not operate effectively, we may not be able to rely on their software and cyber attackers may be able to exploit vulnerabilities. The usage of cloud-based software increases the risk of operational disruption should internet service be interrupted. While we have implemented business contingency and other plans to facilitate continuous internet access, sustained or concurrent service denials or similar failures could limit our ability to service our clients or otherwise operate our business. Any such event or failure could have a material adverse effect on our business, financial condition and results of operations.

Additionally, we license software from third parties, much of which is integral to our systems and our business. The licenses are generally terminable if we breach our obligations under the license agreements. If any of these relationships were terminated or if any of these vendors were to cease doing business or cease to support the applications we currently utilize, we may be forced to spend significant time and expense to replace the licensed software, and necessary replacements may not be available on reasonable terms, if at all.

Risks Related to Financial and Accounting Matters

We have identified material weaknesses in our internal control over financial reporting. If our remediation of such material weaknesses is not effective, or if we experience additional material weaknesses in the future or otherwise fail to develop and maintain effective internal control over financial reporting, our ability to produce timely and accurate financial statements or comply with applicable laws and regulations could be impaired.

As a public company, we will be subject to the reporting requirements of the Exchange Act, the Sarbanes-Oxley Act, and the rules and regulations of the applicable listing standards of the NYSE. We expect that the requirements of these rules and regulations will continue to increase our legal, accounting, and financial compliance costs, make some activities more difficult, time-consuming, and costly, and place significant strain on our personnel, systems, and resources.

The Sarbanes-Oxley Act requires, among other things, that we maintain effective disclosure controls and procedures, and internal control, over financial reporting. We are continuing to develop and refine our disclosure controls, internal control over financial reporting, and other procedures that are designed to ensure information required to be disclosed by us in our financial statements and in the reports that we will file with the SEC is

 

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recorded, processed, summarized, and reported within the time periods specified in SEC rules and forms, and information required to be disclosed in reports under the Exchange Act is accumulated and communicated to our principal executive and financial officers. In order to maintain and improve the effectiveness of our internal controls and procedures, we have expended, and anticipate that we will continue to expend, significant resources, including accounting-related costs and significant management oversight.

As a public company, we will be required to maintain internal control over financial reporting and to evaluate and determine the effectiveness of our internal control over financial reporting. Beginning with our second annual report following this offering, we will be required to provide a management report on internal control over financial reporting and our auditors may be required to formally attest to the effectiveness of our internal control over financial reporting once we are no longer an “emerging growth company.” Neither we nor our independent registered public accounting firm were required to, and therefore did not, perform an evaluation of our internal control over financial reporting as of or for any period included in our financial statements, nor any period subsequent in accordance with the provisions of the Sarbanes-Oxley Act. However, in connection with the preparation of our consolidated financial statements, we identified material weaknesses in our internal control over financial reporting. 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 our annual or interim financial statements will not be prevented or detected on a timely basis.

In connection with the audit of our consolidated financial statements as of and for the years ended December 31, 2023 and 2024, we and our independent registered public accounting firm identified certain material weaknesses. The material weaknesses identified relate to (i) information technology general controls, including in the areas of restriction of privileged access, user provisioning and de-provisioning, periodic user access reviews, authentication settings, and change management, and (ii) inadequate design and maintenance of detective controls over period end financial reporting, including review controls over journal entries, reconciliations and account analyses, and evaluation of technical accounting matters. We have concluded that these material weaknesses arose because, as a private company, we did not have the necessary business processes, systems, personnel, and related internal controls necessary to satisfy the accounting and financial reporting requirements of a public company.

We have taken and will continue to take action to improve our internal control over financial reporting and remediate these material weaknesses, including:

 

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consulting with experts on evaluation of technical accounting matters;

 

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performing a risk assessment over the organization and information technology systems used as part of financial reporting, and identifying control activities to be implemented in response to the identified risks, which will include improving IT general controls, period end financial reporting controls including journal entries, reconciliations, account analysis, and evaluation of technical accounting matters;

 

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engaging a third-party provider to help us assess and improve our internal control over financial reporting in preparation for compliance with Section 404; and

 

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hiring additional qualified accounting and financial reporting personnel to support our accounting processes and procedures and supplement our internal resources in our computation processes.

While management is making improvements to our control environment and business processes to support and scale with our growing operations, the identified material weaknesses remain un-remediated. We may not be able to fully remediate these material weaknesses until these steps have been completed and the internal controls have been operating effectively for a sufficient period of time. This evaluation process, including testing the effectiveness of the remediation efforts, may be concluded prior to December 31, 2025, but may extend into 2026. Additionally, as stated above, we have not performed an evaluation of our internal control over financial reporting; accordingly, we cannot ensure that we have identified all, or that we will not in the future have

 

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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, beginning with our second annual report after the completion of this offering.

The process of designing and implementing internal control over financial reporting required to comply with the disclosure and attestation requirements of Section 404 of the Sarbanes-Oxley Act will be time consuming and costly. If during the evaluation and testing process we identify additional material weaknesses in our internal control over financial reporting or determine that existing material weaknesses have not been remediated, our management will be unable to assert that our internal control over financial reporting is effective. Even if our management concludes that our internal control over financial reporting is effective, our independent registered public accounting firm may conclude that there are material weaknesses with respect to our internal control over financial reporting. If we are unable to assert that our internal control over financial reporting is effective, or when required in the future, if our independent registered public accounting firm is unable to express an unqualified opinion as to the effectiveness of our internal control over financial reporting, investors may lose confidence in the accuracy and completeness of our financial reports, the market price of our stock could be adversely affected and we could become subject to litigation or investigations by the stock exchange on which our securities are listed, the SEC, or other regulatory authorities, which could require additional financial and management resources.

Further, upon becoming a public company, significant resources and management oversight will be required. As a result, management’s attention may be diverted from other business concerns, which could harm our business, operating results, financial condition, and future prospects.

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

We may require additional cash resources due to changed business conditions or other future developments to support the growth of our business, including any investments, new or enhanced service offerings, or acquisitions that we pursue. We maintain a $20.0 million revolving line of credit (the Credit Agreement) with a financial institution, which is collateralized by substantially all the assets of Andersen Tax Holdings LLC and contains certain financial and liquidity covenants. Andersen Tax Holdings LLC was in compliance with all covenants, and had no cash borrowings under the Credit Facility, during the year ended December 31, 2024 and the six months ended June 30, 2025. If our resources are insufficient to satisfy our cash requirements, we may seek to sell additional equity or debt securities or obtain another credit facility, and we cannot be certain that such additional financing would be available on terms acceptable to us or at all. The sale of additional equity securities could result in dilution to our stockholders, and additional indebtedness would result in increased debt service costs and obligations and could impose operating and financial covenants that would further restrict our operations.

Changes to accounting standards or the estimates and assumptions we make in connection with the preparation of our consolidated financial statements could adversely affect our financial results.

Our financial statements have been prepared in accordance with GAAP. It is possible that changes in accounting standards could have a material adverse effect on our results of operations and financial position. The application of generally accepted accounting principles requires us to make estimates and assumptions about certain items and future events that affect our reported financial condition and results of operations, and our accompanying disclosure with respect to, among other things, revenue recognition and income taxes. We base our estimates on historical experience, current commitments and various other assumptions that we believe to be reasonable under the circumstances and at the time they are made. These estimates and assumptions involve the use of judgment and are subject to significant uncertainties, some of which are beyond our control. If our estimates, or the assumptions underlying such estimates, are not correct, actual results may differ materially from our estimates, and we may need to, among other things, adjust revenue or accrue additional costs that could adversely affect our results of operations.

 

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Our goodwill and other intangible assets could become impaired, which could lead to material non-cash charges against earnings and a material impact on our future results of operations and statement of financial position.

As of June 30, 2025, the net carrying value of our goodwill and other intangible assets totaled $30.1 million and $2.4 million, respectively. We assess these assets, including client lists, as required under GAAP to determine if there is any indication of impairment. Goodwill is required to be tested for impairment at least annually. Significant negative industry or economic trends, disruptions to our business, adverse changes resulting from new governmental policies or regulations, divestitures and sustained market capitalization declines may result in recognition of impairments. Additionally, a significant portion of the purchase price of any businesses we acquire in the future may be allocated to acquired goodwill and other intangible assets. Any impairment of goodwill or intangible assets would result in a non-cash charge against current earnings, which could lead to a material impact on our results of operations and statements of financial position.

Fluctuations in foreign currency exchange rates could adversely affect our results.

If we are successful in expanding our business and operations internationally, our international sales may be denominated in foreign currencies, and this revenue could be materially affected by currency fluctuations. A substantial majority of our revenue to date have been denominated in U.S. dollars and, therefore, we have not historically been subject to foreign currency risk. In addition, as we continue to expand internationally, we expect to incur increased expenses for employee compensation and other operating expenses at non-U.S. locations in the local currency. Fluctuations in the exchange rates between the U.S. dollar and other currencies could result in the dollar equivalent of such expenses being higher. The volatility of exchange rates depends on many factors that we cannot forecast with reliable accuracy. Moreover, significant and unforeseen changes in foreign currency exchange rates may cause us to fail to achieve any financial projections we make in the future, which could have an adverse effect on the market price of our Class A common stock. Although we may in the future decide to undertake foreign exchange hedging transactions to cover a portion of our foreign currency exchange exposure, we currently do not hedge our exposure to foreign currency exchange risks. We cannot assure that any hedging techniques we may implement in the future will be successful or that our business, financial condition, and results of operations will not be materially adversely affected by fluctuations in foreign currency exchange rates.

Risks Related to Being a Public Company

We are an “emerging growth company” and we expect to elect to comply with reduced public company reporting requirements, which could make our Class A common stock less attractive to investors.

We are an “emerging growth company,” as defined in the JOBS Act. For as long as we continue to be an emerging growth company, we are eligible for certain exemptions from various public company reporting requirements. These exemptions include, but are not limited to, (i) not being required to comply with the auditor attestation requirements of Section 404 of Sarbanes-Oxley, (ii) reduced disclosure obligations regarding executive compensation in our periodic reports, proxy statements and registration statements, (iii) exemptions from the requirements of holding a nonbinding advisory vote on executive compensation and shareholder approval of any golden parachute payments not previously approved, and (iv) only being required to provide two years of audited financial statements in this prospectus. We could be an emerging growth company for up to five years after the first sale of our Class A common stock pursuant to an effective registration statement under the Securities Act of 1933, as amended (the Securities Act). However, if certain events occur prior to the end of such five-year period, including if we become a “large accelerated filer,” our annual gross revenue exceed $1.235 billion, or we issue more than $1.0 billion of non-convertible debt securities in any three-year period, we would cease to be an emerging growth company prior to the end of such five-year period. We have made certain elections with regard to the reduced disclosure obligations regarding executive compensation in this prospectus and may elect to take advantage of other reduced disclosure obligations in future filings. As a result, the information that we provide to holders of our Class A common stock may be different than you might receive

 

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from other public reporting companies in which you hold equity interests. We cannot predict if investors will find our Class A common stock less attractive as a result of our reliance on these exemptions. If some investors find our Class A common stock less attractive as a result of any choice we make to reduce disclosure, there may be a less active trading market for our Class A common stock and the market price for our Class A common stock may be more volatile.

In addition, Section 107 of the JOBS Act provides that an emerging growth company can use the extended transition period provided in Section 7(a)(2)(B) of the Securities Act to delay adoption of new or revised accounting standards until such time as those standards apply to private companies. We have elected to “opt-in” to this extended transition period for complying with new or revised accounting standards and, therefore, we will not be subject to the same new or revised accounting standards as other public companies that comply with such new or revised accounting standards on a non-delayed basis. As a result of this election, our financial statements may not be comparable to companies that comply with public company effective dates.

We will incur increased costs as a result of operating as a public company, and our management will be required to devote substantial time to new compliance initiatives and corporate governance practices.

As a public company, and particularly after we are no longer an “emerging growth company,” we will incur significant legal, accounting, and other expenses that we did not incur as a private company, including costs resulting from public company reporting obligations under the Securities Act, the Exchange Act, or the regulations regarding corporate governance practices. The Sarbanes-Oxley Act, the Dodd-Frank Wall Street Reform and Consumer Protection Act, the rules of the SEC, stock exchange listing requirements, and other applicable securities rules and regulations impose various requirements on public companies, including establishment and maintenance of effective disclosure and financial controls and corporate governance practices. Our management and other personnel will devote a substantial amount of time to compliance with these requirements. Moreover, these rules and regulations will increase our legal and financial compliance costs and will make some activities more time-consuming and costly. We cannot predict or estimate the amount of additional costs we will incur as a public company or the specific timing of such costs.

Most of our management and other key personnel have little experience managing a public company and preparing public filings. In addition, we expect that our management and other key personnel will need to divert attention from other business matters to devote substantial time to the reporting and other requirements of being a public company. In particular, we expect to incur significant expense and devote substantial management effort to complying with the requirements of Section 404 of the Sarbanes-Oxley Act. We will need to hire additional accounting and financial staff with appropriate public company experience and technical accounting knowledge.

As a result of disclosure of information in this prospectus and in filings required of a public company, our business and financial condition will become more visible, which may result in threatened or actual litigation, including by stockholders and competitors. If such claims are successful, our business and operating results could be adversely affected, and even if the claims do not result in litigation or are resolved in our favor, these claims, and the time and resources necessary to resolve them, could divert the resources of our management and adversely affect our business and operating results.

As a public company, we will be obligated to develop and maintain proper and effective internal controls over financial reporting, and if we fail to develop and maintain an effective system of internal controls over financial reporting, our ability to produce timely and accurate financial statements or to comply with applicable laws and regulations could be impaired.

Pursuant to Sarbanes-Oxley Act Section 404, we will be required to furnish a report by our management on our internal control over financial reporting beginning with our second filing of an Annual Report on Form 10-K with the SEC after we become a public company. However, while we remain an emerging growth

 

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company, we will not be required to include an attestation report on internal control over financial reporting issued by our independent registered public accounting firm. To achieve compliance with Sarbanes-Oxley Act Section 404 within the prescribed period, we will be engaged in a process to document and evaluate our internal control over financial reporting, which is both costly and challenging. There is a risk that we will not be able to conclude, within the prescribed timeframe or at all, that our internal control over financial reporting is effective as required by Sarbanes-Oxley Act Section 404.

In addition to the material weaknesses in internal control over financial reporting identified in connection with the preparation of our financial statements, subsequent testing by us or our independent registered public accounting firm may reveal additional deficiencies in our internal control over financial reporting that are deemed to be material weaknesses. During the evaluation and testing process of our internal controls, if we identify additional material weaknesses in our internal control over financial reporting, we will be unable to certify that our internal control over financial reporting is effective. We cannot assure you that there will not be additional material weaknesses or significant deficiencies in our internal control over financial reporting in the future. Any failure to maintain internal control over financial reporting could severely inhibit our ability to accurately report our financial condition or results of operations. If we are unable to conclude that our internal control over financial reporting is effective, or if our independent registered public accounting firm determines we have additional material weaknesses or significant deficiency in our internal control over financial reporting, we could lose investor confidence in the accuracy and completeness of our financial reports, the market price of our Class A common stock could decline, and we could be subject to sanctions or investigations by the SEC or other regulatory authorities. Failure to remedy any material weakness in our internal control over financial reporting, or to implement or maintain other effective control systems required of public companies, could also restrict our future access to the capital markets.

Risks Related to Our Organizational Structure

If we were deemed an “investment company” under the Investment Company Act of 1940 (the 1940 Act) as a result of our ownership of AT Umbrella LLC and its consolidated subsidiaries, applicable restrictions could make it impractical for us to continue our business as contemplated and could have a material adverse effect on our business.

Under the Investment Company Act of 1940, as amended (the Investment Company Act), absent an applicable exemption, a company generally will be deemed to be an “investment company” if (a) it is in the business of investing, reinvesting, owning, holding, or trading in securities and (b) it owns or proposes to acquire “investment securities” having a value exceeding 40% of its total assets (other than U.S. government securities and cash items) on an unconsolidated basis. We do not believe that we or any of our subsidiaries are an “investment company” for purposes of the Investment Company Act, including in part, because neither we nor any of our subsidiaries are in the business of investing, reinvesting, owning, holding, or trading in securities. However, if we were deemed to be an “investment company” as a result of our ownership of AT Umbrella LLC and its consolidated subsidiaries, we would have to comply with a variety of substantive requirements under the Investment Company Act that impose, among other things, limitations on capital structure, restrictions on specified investments, prohibitions on transactions with affiliates, and compliance with reporting, record keeping, voting, proxy disclosure and other rules and regulations that would increase our operating and compliance costs, could make it impractical for us to continue our business as contemplated, and could have a material adverse effect on our business.

Our principal asset is our interest in AT Umbrella LLC and, accordingly, we depend on distributions from AT Umbrella LLC to pay our taxes and expenses, including payments under the Tax Receivable Agreement, which distributions AT Umbrella LLC may be restricted from making.

Andersen Group Inc. is a holding company, and after this offering and the related reorganization transactions, its sole material asset will be its indirect ownership interests in Andersen Tax Holdings LLC through its ownership of approximately % of the Class X Umbrella Units in AT Umbrella LLC, which in turn

 

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will own all ownership interests in Andersen Tax LLC. As such, we have no independent means of generating revenue or cash flow, and our ability to pay our taxes, satisfy our obligations under the Tax Receivable Agreement, pay operating expenses or declare and pay dividends, if any, in the future depends on the financial results and cash flows of AT Umbrella LLC and its subsidiaries. There can be no assurance that AT Umbrella LLC and its subsidiaries will generate sufficient cash flow to distribute funds to us or that applicable state law and contractual restrictions, including negative covenants in debt instruments of AT Umbrella LLC and its subsidiaries, will permit such distributions.

AT Umbrella LLC is treated as a partnership for U.S. federal income tax purposes and, as such, is not subject to any entity-level U.S. federal income tax. Instead, for U.S. federal income tax purposes, taxable income of AT Umbrella LLC is allocated to Andersen Group Inc., the other Class X Umbrella Unit holders and LTIP Unit holders. Accordingly, Andersen Group Inc. will incur income taxes on our distributive share of any net taxable income of AT Umbrella LLC. Under the terms of the AT Umbrella Amended and Restated Limited Liability Company Agreement, AT Umbrella LLC is obligated to make tax distributions to holders of economic interests in AT Umbrella (including holders of Class X Umbrella Units, LTIP Units, the CA Notes and the HO Note). In addition to tax expenses, we will incur expenses related to our operations, including obligations to make payments under the Tax Receivable Agreement. Due to the uncertainty of various factors, we cannot reasonably quantify the likely tax benefits we may realize as a result of the purchases of Class X Umbrella Units from the other Class X Umbrella Unit holders or as a result of Class X Umbrella Unit exchanges in the future or other tax benefits related to our entering into or making payments under the Tax Receivable Agreement, and therefore we cannot reasonably quantify the resulting amounts we are likely to pay out to other holders of Class X Umbrella Units pursuant to the Tax Receivable Agreement; however, we estimate that such payments will be substantial.

We expect that AT Umbrella LLC will make distributions to holders of economic interests in AT Umbrella (including holders of Class X Umbrella Units, LTIP Units, the CA Notes and the HO Note), in respect of the U.S. federal, state and local income tax liability attributable to each holder’s allocable share of taxable income of AT Umbrella LLC, calculated using an assumed tax rate equal to the highest marginal tax rate for a natural person resident in the state of the United States that has the highest individual income tax rates. Tax distributions will be made quarterly, on an estimated basis. Tax distributions made in respect of Class X Umbrella Units (but not LTIP Units) generally will be made pro rata in respect of such Units, as described in the AT Umbrella Amended and Restated Limited Liability Company Agreement. Tax distributions made to a member of AT Umbrella LLC generally will be treated as an advance of and shall be credited against future distributions to such member, and no adjustments will be made to the exchange ratio of Class X Umbrella Units for shares of our Class A common stock upon the exercise of the redemption rights described above to account for prior tax distributions (and tax distributions paid prior to such an exercise of redemption rights will not reduce distributions otherwise payable to us in respect of Class X Umbrella Units acquired in connection with the exercise of such redemption rights).

However, AT Umbrella LLC’s ability to make such distributions may be subject to various limitations and restrictions, such as restrictions on distributions that would violate either any contract or agreement to which AT Umbrella LLC or any of its subsidiaries is then a party, including debt agreements, or any applicable law, or that would have the effect of rendering AT Umbrella LLC or its subsidiaries insolvent. If we do not have sufficient funds to pay our taxes or other liabilities or to fund our operations, we may have to borrow funds, which could materially adversely affect our liquidity and financial condition and subject us to various restrictions imposed by any such lenders. To the extent that we are unable to make payments under the Tax Receivable Agreement, such payments generally will be deferred and will accrue interest until paid. Nonpayment for a specified period, however, may constitute a breach of a material obligation under the Tax Receivable Agreement and therefore accelerate payments due under the Tax Receivable Agreement, unless, generally, such nonpayment is due to a lack of sufficient funds or is prevented by any debt agreement to which AT Umbrella LLC or its subsidiaries is a party. See the sections titled “—Risks Related to this Offering and Our Class A Common Stock,” “Dividend Policy,” “Organizational Structure—Tax Receivable Agreement” and “Organizational Structure—Amended and Restated Limited Liability Company Agreement of AT Umbrella LLC.”

 

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The Tax Receivable Agreement with the TRA Parties requires us to make cash payments to them in respect of certain tax benefits to which we may become entitled, and the CA Notes and HO Note require AT Umbrella LLC to make cash payments to Aggregator. We expect that the payments we and AT Umbrella LLC will be required to make under these arrangements will be substantial.

In connection with the completion of this offering, Andersen Group Inc. will enter into the Tax Receivable Agreement with Aggregator, which will require us to pay to certain holders of Class X Umbrella Units who are or may become parties to the Tax Receivable Agreement from time to time 85% of the tax benefits, if any, that we actually realize, or, in some circumstances, are deemed to realize, as a result of (i) any increase in tax basis in the assets of AT Umbrella LLC and its flow-through subsidiaries resulting from purchases of Class X Umbrella Units from such Class X Umbrella Unit holders with the proceeds of this offering or resulting from exchanges of Class X Umbrella Units for shares of our Class A common stock or cash in the future; and (ii) certain other tax benefits related to our entering into the Tax Receivable Agreement, including tax benefits attributable to payments that we make under the Tax Receivable Agreement. Due to the uncertainty of various factors, we cannot reasonably quantify the likely tax benefits we may realize as a result of the purchases of Class X Umbrella Units from such Class X Umbrella Unit holders or as a result of Class X Umbrella Units exchanges in the future or other tax benefits related to our entering into or making payments under the Tax Receivable Agreement, and therefore we cannot reasonably quantify the resulting amounts that we are likely to pay out pursuant to the Tax Receivable Agreement; however, we estimate that such payments will be substantial. See the section titled “Organizational Structure—Tax Receivable Agreement.” Payments under the Tax Receivable Agreement will be based on the tax reporting positions that we determine. Any payments made by us under the Tax Receivable Agreement generally will reduce the amount of overall cash flow that otherwise might have been available to us (including for reinvestment). To the extent that we are unable to make payments under the Tax Receivable Agreement, such payments generally will be deferred and will accrue interest until paid. Nonpayment for a specified period, however, may constitute a breach of a material obligation under the Tax Receivable Agreement and therefore accelerate payments due under the Tax Receivable Agreement, unless, generally, such nonpayment is due to a lack of sufficient funds or is prevented by any debt agreement to which AT Umbrella LLC or any of its subsidiaries is a party. The payments under the Tax Receivable Agreement also are not conditioned upon the beneficiaries thereof maintaining a continued ownership interest in AT Umbrella LLC or us.

The actual amount and timing of any payments under the Tax Receivable Agreement will vary depending upon a number of factors, including the timing of exchanges by AT Umbrella LLC, the amount of gain recognized by the other Class X Umbrella Unit holders upon exchanges or purchases of Class X Umbrella Units, the amount and timing of the taxable income we generate in the future and the federal tax rates then applicable. See the section titled “Organizational Structure—Tax Receivable Agreement.”

In connection with the reorganization transactions, AT Umbrella LLC will issue two types of promissory notes to Aggregator representing (1) the HO Note and (2) the CA Notes. We expect the HO Note to accrue interest at 7.50% payable over eight years. We expect the CA Notes to accrue interest between 6.50% to 7.50% payable over one to seven years. The aggregate principal amount of the CA Notes is subject to a true-up mechanism following the issuance of these notes to reflect the final calculation of the amount of the related Member Notes, which must be determined on or before December 31, 2025. As a result, the principal amount of the CA Notes could increase or decrease to reflect the aggregate amount of the true-up adjustments. See the sections titled “Organizational Structure—Retiring and Retired Member Class H Aggregator Units” and “Organizational Structure—Capital Account Installment Notes.” To the extent that AT Umbrella LLC is unable to make payments under the CA Notes and HO Note, such payments generally will be deferred and will accrue interest until paid. Any payments made by AT Umbrella LLC under the CA Notes and HO Note generally will reduce the amount of overall cash that otherwise might have been available for our use (including for reinvestment).

 

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In certain cases, payments under the Tax Receivable Agreement may be accelerated and significantly exceed the actual benefits, if any, we realize in respect of the tax attributes subject to the Tax Receivable Agreement and may impair our ability to consummate change of control transactions or negatively impact the value received by holders of our Class A common stock.

The Tax Receivable Agreement provides that if (i) certain mergers, asset sales, other forms of business combination or other changes of control were to occur, (ii) we breach any of our material obligations under the Tax Receivable Agreement or (iii) at any time, we elect an early termination of the Tax Receivable Agreement, then the Tax Receivable Agreement will terminate and our obligations, or our successor’s obligations, to make payments under the Tax Receivable Agreement will accelerate and become immediately due and payable. The amount due and payable in that circumstance is based on certain assumptions, including an assumption that we will have sufficient taxable income to fully utilize all potential future tax benefits that are subject to the Tax Receivable Agreement. See the section titled “Organizational Structure—Tax Receivable Agreement.” We may need to incur debt to finance payments under the Tax Receivable Agreement to the extent our cash resources are insufficient to meet our obligations under the Tax Receivable Agreement as a result of timing discrepancies or otherwise.

As a result of a change in control, material breach or our election to terminate the Tax Receivable Agreement early, (i) we could be required to make cash payments to the TRA Parties that are greater than the specified percentage of the actual benefits we ultimately realize in respect of the tax benefits that are subject to the Tax Receivable Agreement and (ii) we would be required to make an immediate cash payment equal to the anticipated future tax benefits that are the subject of the Tax Receivable Agreement discounted in accordance with the Tax Receivable Agreement which payment may be made significantly in advance of the actual realization, if any, of such future tax benefits. In these situations, our obligations under the Tax Receivable Agreement could have a substantial negative impact on our liquidity and could have the effect of delaying, deferring or preventing certain mergers, asset sales, other forms of business combination, or other changes of control, or reducing the consideration in connection with any such change of control transaction than the consideration that would have been paid in the absence of such obligations. There can be no assurance that we will be able to finance our obligations under the Tax Receivable Agreement.

Our organizational structure, including the Tax Receivable Agreement, confers certain benefits upon the other Class X Umbrella Unit holders that will not benefit the other holders of our Class A common stock to the same extent.

Our organizational structure, including the Tax Receivable Agreement, confers certain benefits upon the other Class X Umbrella Units holders that will not benefit the other holders of our Class A common stock to the same extent. Andersen Group Inc. will enter into a Tax Receivable Agreement with Aggregator, which will require us to pay to certain holders of Class X Umbrella Units who are or may become parties to the Tax Receivable Agreement from time to time 85% of the amount of tax benefits, if any, that we actually realize, or in some circumstances are deemed to realize, as a result of (i) any increase in tax basis in the assets of AT Umbrella LLC and its flow-through subsidiaries resulting from purchases of Class X Umbrella Units from such Class X Umbrella Unit holders with the proceeds of this offering or resulting from exchanges of Class X Umbrella Units for shares of our Class A common stock or cash in the future; and (ii) certain other tax benefits related to our entering into the Tax Receivable Agreement, including tax benefits attributable to payments that we make under the Tax Receivable Agreement. Due to the uncertainty of various factors, we cannot reasonably quantify the likely tax benefits we may realize as a result of the purchases of Class X Umbrella Units from the other Class X Umbrella Unit holders or as a result of the Class X Umbrella Units exchanges in the future or other tax benefits related to our entering into or making payments under the Tax Receivable Agreement and therefore we cannot reasonably quantify resulting amounts that we are likely to pay out pursuant to the Tax Receivable Agreement; however, we estimate that such payments will be substantial. See the section titled “Organizational Structure—Tax Receivable Agreement.” Although we will retain 15% of the amount of such tax benefits, this and other aspects of our organizational structure may adversely impact the future trading market for the Class A

 

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common stock. In addition, our organizational structure, including the Tax Receivable Agreement, imposes additional compliance costs and requires a substantial amount of resources that would not be required of a company with a simpler organizational structure.

We may not be able to realize all or a portion of the tax benefits that are currently expected to result from the tax attributes covered by the Tax Receivable Agreement and from payments made under the Tax Receivable Agreement.

Our ability to realize the tax benefits that we currently expect as a result of the tax attributes covered by the Tax Receivable Agreement, the payments made pursuant to the Tax Receivable Agreement, and the interest deductions imputed under the Tax Receivable Agreement all depend on a number of assumptions, including that we will earn sufficient taxable income each year during the period over which such deductions are available and that there are no adverse changes in applicable law or regulations. If our actual taxable income were insufficient or there were adverse changes in applicable law or regulations, we may be unable to realize all or a portion of the expected tax benefits and our cash flows and shareholders’ equity could be negatively affected. See the section titled “Organizational Structure—Tax Receivable Agreement.”

The U.S. Internal Revenue Service (the IRS) might challenge the tax benefits we receive in connection with this offering and related transactions or in connection with future acquisitions of Class X Umbrella Units. As a result, it is possible that we could make cash payments under the Tax Receivable Agreement that are substantially greater than our actual cash tax savings.

Payments under the Tax Receivable Agreement will be based on the tax reporting positions that we determine at the time of the payments. Although we are not aware of any issue that would cause the IRS to challenge a tax basis increase, we will not be reimbursed for any cash payments previously made under the Tax Receivable Agreement if any tax benefits initially claimed by us are subsequently disallowed, in whole or in part, by the IRS or other applicable taxing authority. For example, if the IRS later asserts that we did not obtain a tax basis increase, among other potential challenges, then we would not be reimbursed for any cash payments previously made under the Tax Receivable Agreement with respect to such tax benefits that we had initially claimed. Instead, any excess cash payments made by us to a party to the Tax Receivable Agreement will be netted against future cash payments, if any, that we otherwise would be required to make to such party under the terms of the Tax Receivable Agreement. Any tax benefits initially claimed by us may not be disallowed for a number of years following the initial time of such payment or, even if challenged earlier, such excess cash payment may be greater than the amount of future cash payments that we otherwise might be required to make under the terms of the Tax Receivable Agreement. Accordingly, there may not be sufficient future cash payments against which to net. The applicable U.S. federal income tax rules are complex and their application to certain aspects of our structure are uncertain and there is no explicit authority in this regard. Therefore, there can be no assurance that the IRS or a court will not disagree with our tax reporting positions. As a result, it is possible that we could make cash payments under the Tax Receivable Agreement that are substantially greater than our actual cash tax savings.

AT Umbrella LLC may make distributions of cash to us in excess of the amounts we use to make distributions to our stockholders and pay our expenses (including our taxes and payments under the Tax Receivable Agreement). To the extent we do not distribute such excess cash as dividends on our Class A common stock, the other Class X Umbrella Unit holders would benefit from any value attributable to such cash as a result of their ownership of Class A common stock upon a redemption or exchange of their Class X Umbrella Units.

Following the completion of this offering, we will receive a portion of any distributions made by AT Umbrella LLC to us, Aggregator and the LTIP Unit holders. Any cash received by us from such distributions will first be used by us to satisfy any tax liability and then to make any payments required under the Tax Receivable Agreement. Subject to limitations imposed by applicable law and contractual restrictions (including pursuant to our debt instruments and any future debt instruments) and our having available cash, the AT Umbrella Amended

 

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and Restated Limited Liability Company Agreement requires AT Umbrella LLC to make certain distributions to us, the other Class X Umbrella Unit holders and the LTIP Unit holders to facilitate the payment of taxes with respect to the income of AT Umbrella LLC that is allocated to us and them. These distributions are based on an assumed tax rate, and to the extent the distributions we receive exceed the amounts actually required by us to pay taxes, Tax Receivable Agreement payments, and other expenses, we will not be required to distribute such excess cash to our stockholders. Our board of directors may, in its sole discretion, choose to use such excess cash for any purpose, including (i) to make distributions to the holders of our Class A common stock, (ii) to acquire additional newly issued Class X Umbrella Units, and/or (iii) to repurchase outstanding shares of our Class A common stock. Unless and until our board of directors chooses, in its sole discretion, to declare a distribution, we will have no obligation to distribute such cash (or other available cash other than any declared dividend) to our stockholders.

No adjustments to the redemption or exchange ratio of Class X Umbrella Units for shares of our Class A common stock will be made as a result of either (i) any cash distribution by us or (ii) any cash that we retain and do not distribute to our stockholders. To the extent we do not distribute such cash as dividends on our Class A common stock and instead, for example, hold such cash balances, buy additional Class X Umbrella Units or lend them to AT Umbrella LLC, this may result in shares of our Class A common stock increasing in value relative to the Class X Umbrella Units. The other holders of Class X Umbrella Units may benefit from any value attributable to such cash balances if they acquire shares of Class A common stock in redemption of or exchange for their Class X Umbrella Units or if we acquire additional Class X Umbrella Units (whether from AT Umbrella LLC or from other holders of Class X Umbrella Units) at a price based on the market price of our Class A common stock at the time, notwithstanding that such holders may have participated previously as holders of Class X Umbrella Units in distributions that resulted in such cash balances to us. See the sections titled “Certain Relationships and Related Party Transactions—Amended and Restated Limited Liability Company Agreement of AT Umbrella LLC” and “Dividend Policy” for further information.

The members of AT Umbrella LLC, including us, may have conflicting interests.

Holders of Class X Umbrella Units have the right to consent to certain amendments to the AT Umbrella Amended and Restated Limited Liability Company Agreement, as well as to certain other matters. Holders of these voting rights may exercise them in a manner that conflicts with the interests of shareholders of Andersen Group Inc. Circumstances may arise in the future when the interests of the other Class X Umbrella Unit holders conflict with the interests of our shareholders. Since Andersen Group Inc. is the managing member of AT Umbrella LLC, we have certain obligations to the other members of AT Umbrella LLC that may conflict with fiduciary duties our officers and directors owe to our shareholders. These conflicts may result in decisions that are not in the best interests of our shareholders.

If AT Umbrella LLC were to become a publicly traded partnership for U.S. federal income tax purposes, we and AT Umbrella LLC might be subject to potentially significant tax inefficiencies, and we would not be able to recover payments previously made under the Tax Receivable Agreement even if the corresponding tax benefits were subsequently determined to have been unavailable due to such publicly traded partnership status. Even as a partnership for U.S. federal income tax purposes, AT Umbrella LLC could become liable for amounts resulting from adjustments to its tax returns for prior years.

We intend to operate such that AT Umbrella LLC does not become a publicly traded partnership taxable as a corporation for U.S. federal income tax purposes. A “publicly traded partnership” is a partnership the interests of which are traded on an established securities market or are readily tradable on a secondary market or the substantial equivalent thereof. Under certain circumstances, transfers of units of AT Umbrella LLC could cause AT Umbrella LLC to be treated as a publicly traded partnership. Applicable U.S. Treasury regulations provide for certain safe harbors to avoid treatment as a publicly traded partnership, and we intend to operate such that AT Umbrella LLC qualifies for one or more of such safe harbors, although it may be unable to do so, or satisfaction of a safe harbor may be subject to varying interpretation. In addition, from time to time the U.S. Congress has

 

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considered legislation to change the tax treatment of partnerships and there can be no assurance that any such legislation will not be enacted or if enacted will not be adverse to us.

If AT Umbrella LLC were to become a publicly traded partnership taxable as a corporation for U.S. federal income tax purposes, we might be subject to potentially significant tax inefficiencies, including as a result of our inability to file a consolidated U.S. federal income tax return with AT Umbrella LLC. In addition, we may not be able to realize tax benefits covered under the Tax Receivable Agreement and would not be able to recover any payments previously made by us under the Tax Receivable Agreement, even if the corresponding tax benefits (including any claimed increase in the tax basis of AT Umbrella LLC’s assets) were subsequently determined to have been unavailable.

Even if AT Umbrella LLC continues to be treated as a partnership for U.S. federal income tax purposes, certain adjustments to AT Umbrella LLC’s tax return (or any tax returns of any subsidiary of AT Umbrella LLC that is treated as a partnership for U.S. federal income tax purposes) for prior years may result in liabilities for AT Umbrella LLC. Legislation that is effective for taxable years beginning after December 31, 2017, may impute liability for adjustments to a partnership’s tax return on the partnership itself with respect to taxable years of the partnership that are open to adjustment in certain circumstances, absent an election to the contrary. AT Umbrella LLC (or any subsidiary of AT Umbrella LLC that is treated as a partnership for U.S. federal income tax purposes) may be subject to material liabilities pursuant to this legislation and related guidance if, for example, its calculations of taxable income are incorrect.

Risks Related to this Offering and Our Class A Common Stock

No public market currently exists for our Class A common stock, and there can be no assurance that an active public market for our Class A common stock will develop.

Prior to this offering, there has been no public market for our Class A common stock. The initial public offering price for our Class A common stock will be determined through negotiations between us and the representatives of the underwriters and may not be indicative of the market price of our Class A common stock after this offering. If you purchase shares of our Class A common stock, you may not be able to resell those shares of Class A common stock at or above the initial public offering price. We cannot predict the extent to which investor interest in our Class A common stock will lead to the development of an active trading market or how liquid that market might become. If an active public market for our Class A common stock does not develop, or is not sustained, it may be difficult for you to sell your Class A common stock at a price that is attractive to you or at all.

The market price of our Class A common stock could be volatile and you may not be able to resell your shares at or above our initial public offering price. Declines in the market price of Class A common stock could subject us to litigation.

The trading prices of the securities of many companies have historically been highly volatile, and the financial and other capital markets have been unusually volatile. Accordingly, the market price of our Class A common stock could be subject to wide fluctuations for many reasons, many of which are beyond our control, including those described in this “Risk Factors” section and others such as:

 

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actual variations in our operating results and other financial and operational metrics, including the key business metrics disclosed in this prospectus, as well as how those results and metrics compare to analyst and investor expectations;

 

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speculation about our operating results;

 

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failure of analysts to initiate or maintain coverage of our company, changes in their estimates of our operating results or changes in recommendations by analysts that follow our Class A common stock;

 

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•

the financial projections we may provide to the public, any changes in these projections or our failure to meet these projections;

 

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announcements of new services, strategic alliances, strategic initiatives or significant agreements or other developments by us or our competitors;

 

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announcements by us or our competitors of mergers or acquisitions or rumors of such transactions involving us or our competitors;

 

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rumors and market speculation involving us or other companies in our industry, which may include short seller reports;

 

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the impact of regulatory changes, tariffs or other trade actions;

 

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changes in our senior management or other key personnel or departures of large groups of our Managing Directors;

 

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cybersecurity breaches or other issues;

 

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the strength of the global economy or the economy in the jurisdictions in which we operate, and market conditions in our industry;

 

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any coordinated trading activities or large derivative positions in our Class A common stock;

 

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litigation or other claims against us;

 

•

unfavorable news or other events regarding us which negatively affect our brand or reputation;

 

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the number of shares of our Class A common stock that are available for public trading; and

 

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any other factors discussed in this prospectus.

In addition, if the market for the stock of professional services companies or the stock market in general experiences a loss of investor confidence, the market price of our Class A common stock could decline for reasons unrelated to our business, results, and growth prospects. The market price of our Class A common stock might also decline in reaction to events that affect other companies, even if those events do not directly affect us. Some companies that have experienced volatility in the trading price of their stock have been the subject of securities class action litigation. If we are the subject of such litigation, it could result in substantial costs and could divert our management’s attention and resources, which could adversely affect our business.

We have broad discretion in the use of the net proceeds from this offering and may not use them effectively.

We currently intend to use the proceeds of this offering to acquire a number of newly issued Class X Umbrella Units equal to the number of shares of Class A common stock issued in this offering from AT Umbrella LLC, at a purchase price equal to the initial public offering price of Class A common stock after deducting underwriting discounts and commissions. We currently intend to cause AT Umbrella LLC to use the proceeds it receives from the sale of Class X Umbrella Units to us to pay fees and expenses in connection with this offering and the reorganization transactions and for other general corporate purposes. We also intend to cause AT Umbrella LLC to use the net proceeds for investments in technology, infrastructure, training and strategic acquisitions of, or investments in, other businesses or technologies that we believe will complement our current business and expansion strategies, although we do not currently have any agreements or commitments for any specific material acquisitions or investments. Our management will have broad discretion in the application of the net proceeds from this offering that have not otherwise been identified for particular purposes described in the section titled “Use of Proceeds.” Because of the number and variability of factors that will determine our use of the net proceeds from this offering, their ultimate use may vary substantially from their currently intended use. Our management might not apply our net proceeds in ways that ultimately increase the value of your investment, and the failure by our management to apply these funds effectively could harm our business. Pending their use, we may invest the net proceeds from this offering in short- and intermediate-term interest-bearing obligations,

 

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investment-grade instruments, certificates of deposit or direct or guaranteed obligations of the U.S. government. These investments may not yield a favorable return to our stockholders. If we do not invest or apply the net proceeds from this offering in ways that enhance stockholder value, we may fail to achieve expected results, which could cause the market price of our Class A common stock to decline.

The dual-class structure of our common stock has the effect of concentrating voting control with Aggregator, which will hold in the aggregate   % of the combined voting power of our outstanding capital stock following the completion of this offering. This ownership will limit or preclude your ability to influence corporate matters, including the election of directors, amendments of our organizational documents, and any major corporate transaction requiring stockholder approval, including change of control transactions.

Our Class B common stock has ten votes per share, and our Class A common stock, which is the stock we are selling in this offering, has one vote per share. Upon completion of this offering, Aggregator will hold all outstanding shares of our Class B common stock. As a result, immediately following the completion of this offering, and after giving effect to the reorganization transactions described under the section titled “Organizational Structure,” Aggregator will hold   % of the combined voting power of our outstanding capital stock, assuming no exercise by the underwriters of their over-allotment option and therefore will be able to control all matters submitted to our stockholders for approval.

This concentrated control will limit or preclude your ability to influence corporate matters for the foreseeable future, including the election of directors, amendments of our organizational documents, and any merger, consolidation, sale of all or substantially all of our assets, or other major corporate transaction requiring stockholder approval. In addition, this may prevent or discourage unsolicited acquisition proposals or offers for our capital stock that you may feel are in your best interests as one of our stockholders.

Further, we cannot predict whether our dual-class structure, combined with the concentrated control of Aggregator, will result in a lower or more volatile market price of our Class A common stock or in negative publicity or other adverse consequences.

Sales of a substantial number of shares of our Class A common stock in the public market by our existing stockholders following this offering could cause the market price of our Class A common stock to decline.

Upon the completion of this offering, we will have      shares of Class A common stock (or    shares if the underwriters exercise their over-allotment option in full) outstanding, excluding     shares of Class A common stock that would be issued if all outstanding Class X Umbrella Units held by Aggregator were exchanged for a corresponding number of newly issued shares of Class A common stock. All of the shares sold in this offering will be freely tradable without further restriction or registration under the Securities Act. The      shares of Class A common stock that would be issued if all outstanding Class X Umbrella Units held by Aggregator were exchanged for a corresponding number of newly issued shares of Class A common stock, will be deemed “restricted securities,” as that term is defined under Rule 144 of the Securities Act.

Each of Andersen Group Inc.’s executive officers and directors are subject to lock-up restrictions with the underwriters during the period ending 180 days after the date of this prospectus that prevents them from selling their shares prior to the expiration of this lock-up period, subject to certain exceptions. Morgan Stanley & Co. LLC and UBS Securities LLC may permit our executive officers or directors to sell shares prior to the expiration of the restrictive provisions contained in the “lock-up” agreements with the underwriters. In addition, Mr. Vorsatz, our Chairman and Chief Executive Officer, has entered into an additional lock-up restriction with us that prevents him from selling his shares during a period ending 18 months after the date of this prospectus, which restriction may only be waived by our board of directors. Further, the Aggregator Limited Liability Company Agreement will contractually restrict the ability of Andersen Managing Directors to sell their shares during the period ending 180 days after the date of this prospectus, subject to certain exceptions. We have agreed with the underwriters that

 

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we will not waive, modify or amend such transfer restrictions during the period ending 180 days after the date of this prospectus without the consent of Morgan Stanley & Co. LLC and UBS Securities LLC. See the sections titled “Description of Capital Stock—Redemption, Transferability and Exchange,” “Underwriters” and “Shares Eligible for Future Sale” for a more complete description of the lock-up agreements that we and our executive officers and directors have entered into with the underwriters and pursuant to agreements with us.

After the lock-up agreements and related transfer restrictions pertaining to this offering expire, up to an additional     shares of Class A common stock (which are issuable upon exchange of an equal amount of Class X Umbrella Units and forfeiture of corresponding shares of Class B common stock) will be eligible for sale in the public market, subject to various vesting and transfer restrictions, including those described in the section titled “Organizational Structure—Vesting and Transfer Restrictions of Aggregator Members.” The market price of our Class A common stock could decline as a result of the sale of a substantial number of our shares in the public market or the perception in the market that the holders of a large number of shares intend to sell their shares.

We intend to file one or more registration statements on Form S-8 under the Securities Act to register shares of our Class A common stock or securities convertible into or exchangeable for shares of our Class A common stock issued pursuant to our 2025 Equity Incentive Plan. Any such Form S-8 registration statements will automatically become effective upon filing. Accordingly, shares registered under such registration statements will be available for sale in the open market.

In the future, we may also issue our securities in connection with investments or acquisitions. The number of shares of our Class A common stock (or securities convertible into or exchangeable for our Class A common stock) issued in connection with an investment or acquisition could constitute a material portion of our then-outstanding shares of Class A common stock. As restrictions on resale end, the market price of our shares of Class A common stock could drop significantly if the holders of these restricted shares sell them or are perceived by the market as intending to sell them. These factors could also make it more difficult for us to raise additional funds through future offerings of our Class A common stock or other securities or to use our Class A common stock as consideration for acquisitions of other businesses, investments or other corporate purposes.

If you purchase our Class A common stock in this offering, you will incur immediate and substantial dilution.

The initial public offering price is substantially higher than the pro forma as adjusted net tangible book value per share of our Class A common stock of $   per share as of June 30, 2025. Investors purchasing common stock in this offering will pay a price per share that substantially exceeds the net tangible book value per share. As a result, investors purchasing common stock in this offering will incur immediate dilution of $    per share, based on the initial public offering price of $    per share, the midpoint of the price range set forth on the cover page of this prospectus.

Future sales and issuances of our Class A common stock or rights to purchase or acquire common stock could result in additional dilution to our stockholders and could cause the market price of our Class A common stock to decline.

After this offering, we will have    shares of Class A common stock authorized but unissued, including    shares of Class A common stock issuable upon exchange of Class X Umbrella Units and forfeiture of corresponding shares of Class B common stock that will be held by Aggregator. We may issue additional Class A common stock, convertible securities, preferred stock or other equity following the completion of this offering. We will also admit new Managing Directors from time to time, who we currently expect will become indirect owners of Class X Umbrella Units or LTIP Units of AT Umbrella LLC along with paired shares of Class B common stock, each held indirectly through Aggregator. LTIP Units are exchangeable into Class X Umbrella Units when certain conditions are met. We may alternatively admit new Managing Directors to whom we will issue Class A common stock and/or Class B common stock. We also expect to issue Class A common stock to our

 

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employees, directors, and other service providers pursuant to our equity incentive plan. Such issuances could be dilutive to investors and could cause the market price of our Class A common stock to decline. New investors in such issuances could also receive rights senior to those of holders of our Class A common stock. Similarly, the AT Umbrella Amended and Restated Limited Liability Company Agreement permits AT Umbrella LLC to issue an unlimited number of additional limited liability company interests of AT Umbrella LLC with designations, preferences, rights, powers and duties that are different from, and may be senior to, those applicable to the Class X Umbrella Units, and which may be exchangeable for shares of our Class A common stock. In the future, we may also issue additional securities if we need to raise capital, including, but not limited to, in connection with acquisitions, which could constitute a material portion of our then-outstanding shares of Class A common stock. Any such issuance could substantially dilute the ownership and voting power of our existing stockholders and cause the market price of our Class A common stock to decline.

We will be a “controlled company” within the meaning of NYSE rules and, as a result, will qualify for, and intend to rely on, exemptions and relief from certain corporate governance requirements. You will not have the same protections afforded to stockholders of companies that are subject to such requirements.

After the completion of the reorganization transactions and this offering, Aggregator will hold   % of the combined voting power of our outstanding capital stock (or   % of the combined voting power of our outstanding capital stock if the underwriters exercise their over-allotment option in full). Aggregator will therefore have the ability to determine all matters requiring approval by our stockholders, including the election of our directors, amendment of our governing documents, and approval of major corporate transactions. Because Aggregator will control a majority of the voting power of our outstanding capital stock, Andersen Group Inc. will be a “controlled company” within the meaning of the NYSE corporate governance standards. Under these corporate governance standards, a company of which more than 50% of the voting power in the election of directors is held by an individual, group or another company is a “controlled company” and may elect not to comply with certain corporate governance requirements, namely the requirements to have a majority of directors be independent, to have a compensation committee and to have an independent nominating function. Following this offering, we intend to have a majority of our board of directors be independent and to have an independent compensation committee in addition to an independent audit committee. While our compensation committee will be fully independent, certain actions typically taken by a compensation committee under NYSE rules will instead be taken by the full board in reliance on the “controlled company” exemption, including that our full board of directors will determine and approve our CEO’s compensation, based on recommendations from our compensation committee. In addition, we do not intend to have a nominating committee. The typical functions of this committee will be addressed by our full board of directors. For as long as the “controlled company” exemption is available, our board of directors in the future may not consist of a majority of independent directors and may not have an independent nominating committee or compensation committee. As a result, you may not have the same protections afforded to stockholders of companies that are subject to all of the NYSE rules regarding corporate governance. Use of the controlled company exemptions could cause our Class A common stock to be less attractive to certain investors or otherwise cause the market price of our Class A common stock to decline.

If industry or financial analysts do not publish research or reports about our business, or if they issue inaccurate or unfavorable research regarding our Class A common stock, our stock price and trading volume could decline.

The market for our Class A common stock will be influenced by the research and reports that industry or financial analysts publish about us or our business. We do not control these analysts or the content and opinions included in their reports. As a new public company, we may be slow to attract research coverage and the analysts who publish information about our Class A common stock will have had relatively little experience with our company, which could affect their ability to accurately forecast our results and make it more likely that we fail to meet their estimates. In the event we obtain industry or financial analyst coverage, if any of the analysts who cover us issues an inaccurate or unfavorable opinion regarding the market price of our Class A common stock, our stock price would likely decline. In addition, the stock prices of many companies have declined significantly

 

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after those companies have failed to meet, or significantly exceed, the financial guidance publicly announced by the companies or the expectations of analysts. If our financial results fail to meet, or significantly exceed, our announced guidance or the expectations of analysts or public investors, analysts could downgrade our Class A common stock or publish unfavorable research about us. If one or more of these analysts cease coverage of our company or fail to publish reports on us regularly, our visibility in the financial markets could decrease, which in turn could cause our stock price or trading volume to decline.

Anti-takeover provisions in our charter documents and under Delaware law could make an acquisition of our company more difficult, could limit attempts to make changes in our management, and could depress the market price of our Class A common stock.

Provisions in Andersen Group Inc.’s amended and restated certificate of incorporation and amended and restated bylaws may have the effect of delaying or preventing a change in control of our company or limiting changes in our management. Among other things, they will provide:

 

•

a dual-class structure which provides our holders of Class B common stock with ten votes per share until the date on which Aggregator and its designees and affiliates cease to beneficially own 50% of the voting power of our common stock entitled to vote generally in the election of directors (the Triggering Event), giving Aggregator the ability to significantly influence the outcome of matters requiring stockholder approval until the date of the Triggering Event;

 

•

authorization of the issuance of “blank check” preferred stock that our board of directors could use to implement a stockholder rights plan;

 

•

from and after the Triggering Event, our board of directors will be divided into three classes with members of each class serving staggered three-year terms;

 

•

from and after the Triggering Event, our stockholders may not call special meetings of the stockholders;

 

•

from and after the Triggering Event, our stockholders will only be able to take action at a meeting of stockholders and not by written consent; and

 

•

advance notice requirements for nominations for election to our board of directors or for proposing matters that can be acted upon by stockholders at annual stockholder meetings.

These provisions may delay or prevent attempts by our stockholders to replace members of our management by making it more difficult for stockholders to replace members of our board of directors, which is responsible for appointing the members of our management. We have opted out of Section 203 of the Delaware General Corporation Law, or the DGCL; however, our amended and restated certificate of incorporation contains similar provisions that shall apply to us after the Triggering Event, providing that we may not engage in certain “business combinations” with any “interested stockholder” for a three-year period following the time that the stockholder became an interested stockholder, subject to certain exceptions. Anti-takeover provisions could depress the market price of our Class A common stock by acting to delay or prevent a change in control of our company. For information regarding these and other provisions, see the section titled “Description of Capital Stock.”

Our amended and restated certificate of incorporation will provide that the Court of Chancery of the State of Delaware and the federal district courts of the United States of America will be the exclusive forums 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.

Upon the completion of this offering, Andersen Group Inc.’s amended and restated certificate of incorporation will provide that the Court of Chancery of the State of Delaware will be the exclusive forum for actions or proceedings brought under Delaware statutory or common law: (i) any derivative claim or cause of action brought on our behalf; (ii) any action asserting a claim of a breach of fiduciary duty; (iii) any action asserting a claim against us arising under the DGCL; (iv) any action arising under or seeking to interpret, apply, enforce, or determine the validity of our amended and restated certificate of incorporation or our amended and

 

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restated bylaws (as either may be amended from time to time); (v) any claim or cause of action against us that is governed by the internal affairs doctrine; or (vi) any action asserting an “internal corporate claim” as defined in the DGCL, in all cases to the fullest extent permitted by law and subject to the court’s having personal jurisdiction over the indispensable parties named as defendants.

Our amended and restated certificate of incorporation will further provide that the federal district courts of the United States of America will be the exclusive forum for resolving any complaint asserting a cause or causes of action arising under the Securities Act, including all causes of action asserted against any defendant to such complaint. Some companies that adopted a similar federal district court forum selection provision were subject to a suit in the Chancery Court of Delaware by stockholders who asserted that the provision is not enforceable. While the Delaware Supreme Court held that such federal district court forum selection provision was in fact valid, there can be no assurance that federal courts or other state courts will follow the holding of the Delaware Supreme Court or determine that the our federal district court forum selection provision should be enforced in a particular case. These choice of forum provisions do not apply to actions brought to enforce a duty or liability created by the Exchange Act. We intend for the choice of forum provision regarding claims arising under the Securities Act to apply despite the fact that Section 22 of the Securities Act creates concurrent jurisdiction for federal and state courts over all actions brought to enforce any duty or liability created by the Securities Act or the rules and regulations thereunder. There is uncertainty as to whether a court would enforce such provision with respect to claims under the Securities Act. Our exclusive forum provision will not relieve us of our duties to comply with the federal securities laws and the rules and regulations thereunder, and our stockholders will not be deemed to have waived our compliance with these laws, rules and regulations.

For the avoidance of doubt, this provision is intended to benefit and may be enforced by us, our officers and directors, the underwriters to any offering giving rise to such complaint, and any other professional entity whose profession gives authority to a statement made by that person or entity and who has prepared or certified any part of the documents underlying the offering. These exclusive forum provisions may limit the ability of our stockholders to bring a claim in a judicial forum that such stockholders find favorable for disputes with us or our directors, officers or employees, which may discourage such lawsuits against us and our directors, officers, and employees. Alternatively, if a court were to find such provisions contained in our certificate of incorporation to be inapplicable or unenforceable in an action, we may incur additional costs associated with resolving such action in other jurisdictions. These exclusive forum provisions would not apply to suits brought to enforce a duty or liability created by the Exchange Act.

We do not intend to pay dividends on our capital stock, so any returns will be limited to increases in the value of our Class A common stock.

Andersen Group Inc. has never declared or paid any cash dividends on its capital stock. The declaration, amount, and payment of any future dividends will be at the sole discretion of our board of directors, and will depend on, among other things, general and economic conditions, our results of operations and financial condition, our available cash and current and anticipated cash needs, capital requirements, contractual, legal, tax and regulatory restrictions and implications on the payment of dividends by us to our stockholders or by our subsidiaries to us, including restrictions under any future credit facility or financing we may obtain, and such other factors as our board of directors may deem relevant. See the section titled “Dividend Policy.”

 

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SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS

This prospectus includes forward-looking statements that involve substantial risks and uncertainties. All statements other than statements of historical facts contained in this prospectus, including statements regarding our future operating results and financial position, our business strategy and plans, market growth, and our objectives for future operations, are forward-looking statements. The words “believe,” “may,” “will,” “estimate,” “continue,” “anticipate,” “design,” “intend,” “expect,” “could,” “plan,” “potential,” “predict,” “seek,” “should,” “would,” or the negative version of these words and similar expressions are intended to identify forward-looking statements. We have based these forward-looking statements on our current expectations and projections about future events and trends that we believe may affect our financial condition, results of operations, strategy, short- and long-term business operations and objectives, and financial needs. Forward-looking statements contained in this prospectus include, but are not limited to, statements about:

 

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our future revenue and operating expenses;

 

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the demand for our services;

 

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our ability to acquire new clients and successfully retain existing clients;

 

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our ability to comply with laws and regulations that currently apply or become applicable to our business both in the United States and internationally, including but not limited to, privacy and data security laws and regulations;

 

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estimates regarding the size of the markets we target;

 

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our reliance on key personnel and our ability to identify, recruit, and retain skilled personnel;

 

•

our plans to expand our business, whether through acquisitions of businesses, introduction of new services or otherwise;

 

•

our ability to maintain our culture;

 

•

competition in the markets in which we operate;

 

•

our ability to protect against or mitigate the effects of cyberattacks or other breaches of our data;

 

•

the effects of natural disasters, man-made problems, and similar events on our business;

 

•

general economic conditions in the United States and globally, including the effects of global geopolitical conflicts, inflation, tariffs, interest rates, any instability in the global banking sector, and foreign currency exchange rates;

 

•

our ability to grow our business in light of macroeconomic uncertainty;

 

•

the risks related to our Class A common stock, our dual-class common stock structure and this offering;

 

•

our ability to remediate our material weaknesses in our internal control over financial reporting;

 

•

our future financial performance, including our expectations regarding our revenue, cost of revenue, operating expenses, key metrics and our ability to achieve and maintain future profitability;

 

•

our business model;

 

•

our ability to effectively manage our growth and expand our operations;

 

•

our market opportunity and anticipated trends in our business and industry;

 

•

our ability to remain competitive as we continue to scale our business;

 

•

our expectations regarding our ability to obtain, maintain, enforce, defend and enhance our intellectual property rights;

 

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•

the amount and timing of any payments under the Tax Receivable Agreement;

 

•

increased expenses associated with being a public company;

 

•

our anticipated uses of net proceeds from this offering; and

 

•

other statements regarding our future operations, financial condition, prospects and business strategies.

We caution you that the foregoing list may not contain all of the forward-looking statements made in this prospectus.

These forward-looking statements are subject to a number of risks, uncertainties, and assumptions, including those described in the section titled “Risk Factors.” Moreover, we operate in a very competitive and rapidly changing environment. New risks emerge from time to time. It is not possible for our management to predict all risks, nor can we assess the impact of all factors on our business or the extent to which any factor, or combination of factors, may cause actual results to differ materially from those contained in any forward-looking statements we may make. In light of these risks, uncertainties, and assumptions, the forward-looking events and circumstances discussed in this prospectus may not occur and actual results could differ materially and adversely from those anticipated or implied in the forward-looking statements.

You should not rely upon forward-looking statements as predictions of future events. The events and circumstances reflected in the forward-looking statements may not be achieved or occur. Although we believe that the expectations reflected in the forward-looking statements are reasonable, we cannot guarantee future results, performance or achievements. The forward-looking statements made in this prospectus are given only as of the date on which the statements are made. We undertake no obligation to update any of these forward-looking statements for any reason after the date of this prospectus or to conform these statements to actual results or to changes in our expectations, except as required by law.

In addition, statements that “we believe” and similar statements reflect our beliefs and opinions on the relevant subject. These statements are based upon information available to us as of the date of this prospectus, and while we believe such information forms a reasonable basis for such statements, such information may be limited or incomplete, and our statements should not be read to indicate that we have conducted an exhaustive inquiry into or review of all potentially available relevant information. These statements are inherently uncertain and investors are cautioned not to unduly rely upon these statements.

You should read this prospectus and the documents that we reference in this prospectus and have filed with the SEC as exhibits to the registration statement of which this prospectus is a part with the understanding that our actual future results, performance, and events and circumstances may be materially different from what we expect.

 

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ORGANIZATIONAL STRUCTURE

This offering is being conducted through what is commonly referred to as an umbrella partnership C-corporation (UP-C) structure, which is often used by partnerships and limited liability companies when they decide to undertake an initial public offering. The UP-C structure can provide tax benefits and associated cash flow advantages to both the issuer corporation and the existing owners of the partnership or limited liability company in the initial public offering.

Structure Prior to the Reorganization Transactions

We currently conduct our business through Andersen Tax Holdings LLC and its subsidiaries, including Andersen Tax LLC. Prior to the consummation of the reorganization transactions described below and this offering, all of the equity interests of Andersen Tax Holdings LLC are owned by MD Management LLC (MDM) and MD Investment LLC (MDI and together with MDM, the Management Holdcos). Each of the Management Holdco’s equityholders include current and former Managing Directors.

The following diagram depicts the Andersen Tax Holdings LLC organizational structure prior to the reorganization transactions. This chart is provided for illustrative purposes only and does not purport to represent all legal entities within the Andersen Tax Holdings LLC organizational structure.

 

 

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Reorganization Transactions

Prior to the completion of this offering, we intend to complete an internal reorganization through a series of transactions (the reorganization transactions). In connection with the reorganization transactions:

 

•

Each of the Management Holdcos will issue to each of their members a promissory note in a principal amount equal to such member’s and its related transferees’ aggregated capital account balance in respect of such Management Holdco as of     , with repayment over a seven-year period for each family of related notes with a principal balance of at least $550,000 either a three- or seven-year period for each family of related notes with a principal balance of less than $550,000 and a period of between one to seven years for notes issued to certain retiring and retired Managing Director members of the Management Holdcos (the Member Notes). The aggregate principal amount of the Member Notes is subject to a true-up mechanism following the issuance of these notes to reflect the final calculation of the amount of the related capital accounts, which must be determined on or before December 31, 2025.

 

•

In a series of transactions, the Management Holdcos will merge with and into Aggregator, a newly formed Delaware limited liability company, resulting in Aggregator becoming the managing member of Andersen Tax Holdings LLC immediately after the mergers. After the reorganization, the Member Notes will become a liability of Aggregator. AT Umbrella LLC will issue corresponding notes to Aggregator with principal amounts of $  , $  , $  , $  , $  , $  , and $  , equal to the sum of the aggregate principal amounts of the Member Notes, to be paid over the same one- to seven-year periods, respectively (the CA Notes). The aggregate principal amount of the CA Notes is subject to a true-up mechanism following the issuance of these notes to reflect the final calculation of the amount of the related capital accounts, which must be determined on or before December 31, 2025. We expect the CA Notes to accrue interest between 6.50% to 7.50%.

 

•

In connection with the reorganization of the Management Holdcos, Aggregator will issue Class H Aggregator Units entitling certain retiring and retired Managing Director members of the Management Holdcos subject to certain terms and conditions, to certain cash distributions paid over a period of up to seven years relating to payment of certain post-service obligations.

 

•

Aggregator will form, or cause to be formed, AT Umbrella, a Delaware limited liability company. AT Umbrella will issue Class X Umbrella Units to Aggregator. Immediately after such contribution, AT Umbrella will become the managing member of Andersen Tax Holdings LLC.

 

•

AT Umbrella LLC will issue to Aggregator a promissory note in a principal amount of $     with repayment occurring over an eight-year period relating to payment of the above mentioned post-service obligations to certain retiring and retired Managing Director members of the Management Holdcos (the HO Note). We expect the HO Note to accrue interest at 7.50%.

 

•

Andersen Group Inc. will amend and restate its certificate of incorporation and will be authorized to issue two classes of common stock, which we refer to collectively as our “common stock” and which are summarized in the following table:

 

Class of Common Stock		Votes				Economic Rights
Class A common stock			1				Yes
Class B common stock			10				None

Our common stock generally will vote together as a single class on all matters submitted to a vote of our stockholders. We will issue shares of our Class A common stock to the investors in this offering. We do not intend to list our Class B common stock on any stock exchange.

 

•

Andersen Group Inc. will issue to Aggregator shares of our Class B common stock equal in number to the Class X Umbrella Units issued to Aggregator in exchange for the payment by Aggregator of the aggregate par value of the Class B common stock that is received.

 

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•

If Aggregator then has outstanding Aggregator LTIP Units, AT Umbrella will issue LTIP Units to Aggregator. Andersen Group Inc. will issue to Aggregator shares of our Class B common stock equal in number to the maximum number of Class X Umbrella Units issuable upon exchange of such LTIP Units issued to Aggregator in exchange for the payment by Aggregator of the aggregate par value of the Class B common stock that is received. LTIP Units in AT Umbrella will be economically similar to stock options. Each LTIP Unit has a per unit hurdle price, which is economically similar to the exercise price of a stock option.

This Offering and Our Post-IPO Structure

Based on the assumed initial public offering price of $      per share (the midpoint of the price range set forth on the cover page of this prospectus), we estimate that the net proceeds from this offering will be $      (or $      if the underwriters exercise their over-allotment option in full), after deducting underwriting discounts and commissions. We intend to contribute the net proceeds from this offering to AT Umbrella in exchange for a number of Class X Umbrella Units equal to the contribution amount divided by the price paid by the underwriters for shares of our Class A common stock in this offering. Such contribution amount will be used by AT Umbrella for working capital and general corporate purposes. We also intend to cause AT Umbrella LLC to use a portion of the net proceeds from this offering for acquisitions of complementary businesses or other assets. We estimate that the offering expenses (other than the underwriting discounts and commissions) will be approximately $     million. All of such offering expenses will be paid for or otherwise borne by AT Umbrella. See the section titled “Use of Proceeds” for further details.

Andersen Group Inc. is a holding company, and immediately after the consummation of the reorganization transactions and this offering, its sole material asset will be its indirect ownership interests in Andersen Tax Holdings LLC through its ownership of approximately  % of the Class X Umbrella Units in AT Umbrella LLC, which in turn will own all ownership interests in Andersen Tax LLC. Immediately following this offering and the related reorganization transactions, the holders of our Class A common stock will collectively own 100% of the economic interests in Andersen Group Inc. and have    % of the voting power of Andersen Group Inc. Aggregator will own the remaining    % of the voting power of Andersen Group Inc. through ownership of 100% of the outstanding shares of our Class B common stock. After the offering, Andersen Group Inc. will own approximately     % of the Class X Umbrella Units in AT Umbrella LLC, which in turn will own 100% of the common units of Andersen Tax Holdings LLC. Aggregator will own the remaining     % of the Class X Umbrella Units in AT Umbrella LLC, which will be redeemable at the election of Aggregator or its members for newly issued shares of our Class A common stock on a one-for-one basis or, at Andersen Group Inc.’s election, for cash (based on the volume-weighted average market price of our Class A common stock), and such exchange, at Andersen Group Inc.’s election, may be effected as a direct exchange of cash or Class A common stock for Class X Umbrella Units (and the cancellation of paired shares of Class B common stock) in lieu of such redemption. Upon such exchange, an equivalent number of shares of Class B common stock will be cancelled. Immediately following this offering and assuming no LTIP Units are outstanding as of such time, the total number of Class X Umbrella Units directly owned by us and directly owned by Aggregator will equal the sum of the outstanding shares of our Class A common stock and Class B common stock. Thereafter, the sum of the total number of Class X Umbrella Units directly owned by us and of Class X Umbrella Units and LTIP Units directly owned by Aggregator will equal the sum of the outstanding shares of our Class A common stock and Class B common stock. Under the Aggregator Limited Liability Company Agreement, shares of our Class B common stock held by Aggregator cannot be transferred except in connection with an exchange of Class X Umbrella Units into shares of our Class A common stock, subject to certain exceptions, such as to permitted transferees.

Because Andersen Group Inc. will have a controlling financial interest under GAAP rules in AT Umbrella due to its position as its sole managing member, we will consolidate the financial results of AT Umbrella. A portion of our net income (loss) will be allocated to a non-controlling interest to reflect the entitlement of the members of AT Umbrella (other than Andersen Group Inc.) to a portion of AT Umbrella’s net income (loss) attributable to AT Umbrella. We will account for the reorganization transactions in a manner consistent with a

 

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common-control transaction and will initially measure the interests of the pre-offering members of AT Umbrella at their carrying amounts as of the date of the completion of the reorganization transactions.

The following diagram depicts our organizational structure following the reorganization transactions and this offering. For purposes of depicting ownership of voting power in Andersen Group Inc., the below diagram takes into account shares of Class B common stock held by Aggregator. For purposes of depicting ownership of economic interests in Andersen Group Inc., the below diagram assumes that no LTIP Units or Aggregator LTIP Units are outstanding following the reorganization transactions and this offering. This chart is provided for illustrative purposes only and does not represent all legal entities within our organization:

 

 

 

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Amended and Restated Limited Liability Company Agreement of AT Umbrella LLC

As a result of the reorganization, Andersen Group Inc. will conduct all of its business activities through its direct subsidiary, AT Umbrella LLC, an intermediate holding company. The operations of AT Umbrella, and the rights and obligations of its members, will be set forth in an Amended and Restated Limited Liability Company Agreement of AT Umbrella LLC, a form of which will be provided as an exhibit to the registration statement of which this prospectus forms a part. The following is a description of the material terms of this agreement.

Governance. Andersen Group Inc. will serve as the sole managing member of AT Umbrella. As such, we will control its business and affairs and be responsible for the management of its business. We will also have the power to delegate certain of our management responsibilities in respect of AT Umbrella, including to agents and employees of a member of AT Umbrella or of AT Umbrella or its subsidiaries. No other members of AT Umbrella, in their capacity as such, will have any authority or right to control the management of AT Umbrella or to bind it in connection with any matter.

Economic Rights of Members. AT Umbrella will have units designated as Class X Umbrella Units and LTIP Units. Except by reason of the hurdle price for LTIP Units and/or any catch-up distributions in respect of certain LTIP Units, distributions by AT Umbrella (other than tax distributions) in respect of Class X Umbrella Units and LTIP Units will generally be made to the holders of such Units pro rata in accordance with the number of Class X Umbrella Units and LTIP Units they hold. In addition, we may consider effecting catch-up distributions in connection with future holders of LTIP Units.

Issuances of Units. Except as described below when LTIP Units are exchanged for Class X Umbrella Units, upon the issuance of new Class X Umbrella Units to Aggregator, we will issue to Aggregator a number of shares of Class B common stock equal to the number of such new Class X Umbrella Units. Upon the issuance of new LTIP Units, we currently intend to issue to Aggregator a number of shares of Class B common stock equal to the maximum number of Class X Umbrella Units issuable upon exchange of such LTIP Units. The Class B common stock issued in connection with such new Class X Umbrella Units and/or new LTIP Units will be entitled to ten votes per share. We currently expect the new Managing Directors we admit from time to time will become beneficial owners of Class X Umbrella Units or LTIP Units of AT Umbrella LLC along with paired shares of Class B common stock, each held indirectly through Aggregator. We may alternatively admit new Managing Directors to whom we will issue Class A common stock and/or Class B common stock.

Redemption Rights. Under the Amended and Restated Limited Liability Company Agreement of AT Umbrella, Aggregator will have the right from time to time to cause AT Umbrella to redeem any or all of its Class X Umbrella Units (and cancel paired shares of Class B common stock), in exchange for, at Andersen Group Inc.’s election (subject to certain exceptions), either cash (based on the volume-weighted average market price of a share of our Class A common stock) or shares of our Class A common stock, and such exchange, at Andersen Group Inc.’s election, may be effected as a direct exchange of cash or Class A common stock for Class X Umbrella Units (and the cancellation of paired shares of Class B common stock) in lieu of such redemption.

From time to time, subject to certain restrictions, members of Aggregator desiring to transfer all or any portion of their vested interests in Aggregator can elect to (i) cause Aggregator to distribute to them a portion of Class X Umbrella Units indirectly owned by such members in redemption of their corresponding interests in Aggregator and (ii) immediately thereafter exercise their redemption and exchange rights as members of AT Umbrella as described above.

Subject to certain restrictions, the Managing Directors that hold Aggregator LTIP Units will have the right, in connection with the exchange of Aggregator LTIP Units for Class X Aggregator Units prior to a redemption of such Class X Aggregator Units, to cause (1) Aggregator to exchange its vested LTIP Units corresponding to such Aggregator LTIP Units for a number of Class X Umbrella Units equal to the amount to which Aggregator would be entitled to receive on account of such LTIP Units if the fair market value of AT Umbrella LLC (as reasonably determined by the managing member of AT Umbrella LLC) was distributed to the members in liquidation of AT

 

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Umbrella LLC divided by the amount to which we would be entitled to receive on account of one Class X Umbrella Unit if the fair market value of AT Umbrella LLC (as reasonably determined by the managing member of AT Umbrella LLC) was distributed to the members in liquidation of AT Umbrella LLC and (2) us to either issue to Aggregator a number of shares of Class B common stock or cancel a number of shares of Class B common stock (and in such event, Aggregator shall surrender to us such shares for cancellation) such that the number of shares of Class B common stock held by Aggregator immediately after such exchange is equal to the number of such Class X Umbrella Units being issued to Aggregator in such exchange, and following such an exchange immediately thereafter exercise their redemption and exchange rights as members of Aggregator as described above.

Aggregator members who are indirect owners of Class X Umbrella Units and/or LTIP Units held by Aggregator will be subject to vesting and transfer restrictions as described below.

Transfers of Units. Holders of any Units of AT Umbrella may not transfer any such Units to any person unless he or she complies with the terms of the Amended and Restated Limited Liability Company Agreement of AT Umbrella. Subject to various terms and conditions, Aggregator may not transfer any Class X Umbrella Units held by it unless it transfers an equal number of shares of our Class B common stock to the same transferee. Our units of AT Umbrella are non-transferable.

Amendments. The Amended and Restated Limited Liability Company Agreement of AT Umbrella may be amended by members who together own a majority in interest of the Units then outstanding, provided that no amendment may adversely modify in any material respect the Units then held by members of AT Umbrella in any materially disproportionate manner to those held by any other member of AT Umbrella without the prior consent of a majority in interest of such disproportionately affected members. For purposes of determining a majority in interest required to amend the agreement, the interest of a member that holds our Class B common stock is weighted by a multiple of 10.

Indemnification and Exculpation. AT Umbrella will indemnify Andersen Group Inc., as its current managing member, the former members of its board of managers, our officers and directors and its officers against losses, claims, damages, liabilities, expenses (including all reasonable out-of-pocket fees and expenses of counsel and other advisors), judgments, fines, settlements and other amounts arising from any and all claims, demands, actions, suits or proceedings in connection with any matter arising out of or in connection with the AT Umbrella’s business or affairs, or the Amended and Restated Limited Liability Company Agreement of AT Umbrella or any related document, unless such loss, claim, damage, liability, expense, judgment, fine, settlement or other amount is a result of not acting in good faith on behalf of AT Umbrella or arose as a result of the willful commission of any act that is dishonest and materially injurious to AT Umbrella, or results from the breach of certain contractual obligations under the Amended and Restated Limited Liability Company Agreement of AT Umbrella.

Vesting and Transfer Restrictions of Aggregator Members

By entering into the Aggregator Limited Liability Company Agreement, the members of Aggregator who hold Class X Aggregator Units and Aggregator LTIP Units will agree, among other things, to:

 

•

except as described below, maintain beneficial ownership of such member’s units received on or prior to the date of this offering for a period of five years thereafter;

 

•

maintain beneficial ownership of at least one-third of the units received by such member as long as such member is employed or engaged by Andersen Tax LLC or an affiliate; and

 

•

comply with the underwriters’ 180-day lock-up arrangement described under “Underwriters” and with certain other transfer restrictions when requested to do so by Aggregator.

A portion of the Class X Aggregator Units held as of this offering by each member of Aggregator and by certain affiliated persons and entities of such member, which are collectively referred to as a member group, will

 

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be subject to vesting based on the number of prior service years with Andersen Tax LLC or affiliates (or, at the sole discretion of Aggregator’s Board of Directors, service as a managing director or equivalent position other than at Andersen Tax LLC or an affiliate) by such member as follows:

 

Service Years		Percentage of Units Vested at the Time of This Offering
Fewer than 2 years			5	%
2 – 4 years			10	%
4 – 6 years			20	%
6 – 8 years			30	%
8 – 10 years			40	%
Greater than 10 years			50	%

Unvested units cannot be transferred or exchanged, except for certain permitted transfers, and are subject to forfeiture upon the occurrence of certain events, including the termination of such member’s employment. Members of Aggregator who continue to be employed or engaged by Andersen Tax LLC or an affiliate will vest and no longer be subject to forfeiture as to 20% of the restricted units held by such member’s affiliated member group following the completion of each 12-month period of continuous employment or engagement by Andersen Tax LLC or an affiliate commencing on the date of this offering.

Additionally, a member group may only exchange units for Class X Umbrella Units, to be subsequently exchanged for Class A common stock, up to a cumulative limit equal to 20% of the units granted to members within such affiliated member group for each 12-month period after the date of this offering.

Subject to compliance with certain provisions of the Aggregator Limited Liability Company Agreement, upon the retirement of a member at the age of 65 or above, or upon the death or disability of a member, the vesting of all remaining unvested units held by such member’s affiliated member group will accelerate, and such units are no longer subject to any of the transfer restrictions described above, except for the 20% per 12-month period cumulative exchange limit as to a retired member and the underwriters’ 180-day lock-up arrangement.

Any modifications or waivers of the vesting and transfer restrictions described above require our consent.

Managing Director Matters Agreement

Andersen Group Inc. and Aggregator have entered into a Managing Director Matters Agreement. The purpose of the Managing Director Matters Agreement is to establish procedures for certain continued involvement of our Managing Directors in the management of Andersen. The Managing Director Matters Agreement will provide, among other things, mechanisms for Aggregator’s Board to continue to vote on new Managing Director admissions after the consummation of the offering.

Tax Receivable Agreement

Future redemptions or exchanges of Class X Umbrella Units from members of AT Umbrella (other than Andersen Group Inc.) in exchange for shares of our Class A common stock or cash are expected to produce favorable tax attributes that would not be available to us in the absence of such redemptions or exchanges.

Andersen Group Inc. intends to enter into a Tax Receivable Agreement with Aggregator that will provide for the payment by us to certain holders of Class X Umbrella Units who are or may become parties to the Tax Receivable Agreement from time to time 85% of the amount of cash savings, if any, in U.S. federal, state and local income tax or franchise tax that we realize or are deemed to realize (determined by using assumptions regarding combined state and local income tax rates) as a result of (i) any increase in tax basis in the assets of AT Umbrella LLC and its flow-through subsidiaries resulting from purchases of Class X Umbrella Units from such Class X Umbrella Unit holders with the proceeds of this offering or resulting from exchanges of Class X Umbrella Units for, at Andersen Group Inc.’s election, shares of our Class A common stock or cash in the future; and (ii) certain other tax benefits related to our entering into the Tax Receivable Agreement, including tax

 

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benefits attributable to payments that we make under the Tax Receivable Agreement. The Tax Receivable Agreement will make certain simplifying assumptions regarding the determination of the cash savings that we realize or are deemed to realize from the covered tax attributes, which may result in payments pursuant to the Tax Receivable Agreement in excess of those that would result if such assumptions were not made. No TRA Party will reimburse us for any payments previously made if such basis increases or other benefits are subsequently disallowed, except that excess payments made to the TRA Parties will be netted against future payments that would otherwise be made under the Tax Receivable Agreement, if any, after our determination of such excess. We could make future payments to the TRA Parties under the Tax Receivable Agreement that are greater than our actual cash tax savings and may not be able to recoup those payments, which could negatively impact our liquidity. Assuming that all units eligible to be redeemed for cash or Class A common stock would be exchanged for Class A common stock by Andersen Group Inc. at the time of the offering and that we will have sufficient taxable income to utilize all of the tax attributes covered by the Tax Receivable Agreement when they are first available to be utilized under applicable law, we estimate that payments under the Tax Receivable Agreement would aggregate to approximately $     million over the next 15 years and for yearly payments over that time to range between approximately $     million to $     million per year, based on the assumed initial public offering price of $     (the midpoint of the price range set forth on the cover page of this prospectus). Each $1.00 increase or decrease in the assumed initial public offering price of $      per share, which is the midpoint of the price range set forth on the cover page of this prospectus, would increase or decrease, as applicable, the total payments under the Tax Receivable Agreement by approximately $     million, assuming that the number of shares of Class A common stock offered by us, as set forth on the cover page of this prospectus, remains the same and after deducting underwriting discounts and commissions. Similarly, each increase or decrease of 1.0 million shares in the number of shares of our Class A common stock offered in this offering would increase or decrease, as applicable, total payments under the Tax Receivable Agreement by approximately $    million, assuming the assumed initial public offering price remains the same and after deducting underwriting discounts and commissions. See the sections titled “Risk Factors—Risks Related to Our Organizational Structure—The Tax Receivable Agreement with the TRA Parties requires us to make cash payments to them in respect of certain tax benefits to which we may become entitled, and we expect that the payments we will be required to make will be substantial” and “Certain Relationships and Related Party Transactions—Tax Receivable Agreement.”

Retiring and Retired Member Class H Aggregator Units

In connection with the reorganization of the Management Holdcos, Aggregator will issue Units referred to as Class H Aggregator Units entitled to, subject to certain terms and conditions, certain cash distributions over a period of up to seven years totaling an aggregate payment of $    , on account of their interests under the current Management Holdco limited liability company agreements relating to payment of the above mentioned post-service obligations to certain retiring and retired Managing Directors to Aggregator. AT Umbrella LLC will issue to Aggregator a promissory note in a principal amount of $     with repayment over an eight-year period relating to a portion of the payments made to Aggregator on account of such Class H Aggregator Units (the HO Note). We expect the HO Note to accrue interest at 7.50%.

Capital Account Installment Notes

In connection with the reorganization of the Management Holdcos, each of the Management Holdcos will issue to each of their members a promissory note in a principal amount equal to such member’s and its related transferees’ aggregated capital account balance in respect of such Management Holdco as of     , with repayment over a seven-year period for each family of related notes with a principal balance of at least $550,000 either a three- or seven-year period for each family of related notes with a principal balance of less than $550,000. After the reorganization, the Member Notes will become a liability of Aggregator. Additionally, AT Umbrella LLC will issue corresponding notes to Aggregator with principal amounts of $  , $  , $  , $  , $  , $  , and $  , equal to the sum of the aggregate principal amounts of the Member Notes, to be paid over the same one- to seven-year period, respectively. We expect the CA Notes to accrue interest between 6.50% to 7.50%.

 

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INDUSTRY AND MARKET DATA

Information contained in this prospectus concerning our industry and the market in which we operate, including our general expectations and market position, market opportunity, and market size is based on information from various sources. This information involves a number of assumptions and limitations, and you are cautioned not to give undue weight to such estimates. Although neither we nor the underwriters have independently verified the accuracy or completeness of any third-party information, we believe the market position, market opportunity and market size information included in this prospectus is reliable and based on reasonable assumptions. The industry in which we operate is subject to uncertainty and risk due to a variety of factors, including those described in the section titled “Risk Factors.” These and other factors could cause results to differ materially from those expressed in the estimates made by the third parties.

The sources of the estimates, forecasts and market data contained in this prospectus are:

 

•

United Nations Conference on Trade and Development, World Investment Report 2024, June 2024;

 

•

Government Accountability Office, “Tax Cuts and Jobs Act: Considerable Progress Made Implementing Business Provisions, but IRS Faces Administrative and Compliance Challenges,” February 25, 2020;

 

•

Mercer Public Accounting Firms Compensation Survey;

 

•

OECD Initiative to combat Base Erosion and Profit Shifting (BEPS);

 

•

Accounting Today, “Inside the 2025 Top 100 Firms,” March 6, 2025; and

 

•

IBISWorld’s Tax Preparation Services, Accounting Services, Management Consulting and Business Valuation Firms industry reports, 2024.

 

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USE OF PROCEEDS

We estimate that the net proceeds from our issuance and sale of shares of our Class A common stock in this offering will be approximately $     million (or approximately $     million if the underwriters exercise their over-allotment option in full), assuming an initial public offering price of $ per share, the midpoint of the price range set forth on the cover page of this prospectus, after deducting underwriting discounts and commissions. We estimate that the offering expenses (other than the underwriting discounts and commissions) will be approximately $    . All of such offering expenses will be paid for or otherwise borne by AT Umbrella LLC.

Each $1.00 increase or decrease in the assumed initial public offering price of $     per share, the midpoint of the price range set forth on the cover page of this prospectus, would increase or decrease, as applicable, the net proceeds to us from this offering by approximately $     million, assuming that the number of shares offered by us, as set forth on the cover page of this prospectus, remains the same, and after deducting underwriting discounts and commissions. We may also increase or decrease the number of shares we are offering. A 1.0 million share increase or decrease in the number of shares offered by us would increase or decrease, as applicable, the net proceeds to us from this offering by approximately $      million, assuming that the assumed initial offering price to the public remains the same, and after deducting underwriting discounts and commissions. We do not expect that a change in the initial price to the public or the number of shares by these amounts would have a material effect on the uses of the proceeds from this offering.

We currently intend to use the net proceeds from this offering (including net proceeds received if the underwriters exercise their over-allotment option in full) to acquire a number of newly issued Class X Umbrella Units equal to the number of shares of Class A common stock issued in this offering from AT Umbrella LLC, at a purchase price per Class X Umbrella Unit equal to the initial public offering price of Class A common stock after deducting underwriting discounts and commissions. We currently intend to cause AT Umbrella LLC to use the proceeds it receives from the sale of Class X Umbrella Units to us to pay fees and expenses of approximately $     million in connection with this offering and the reorganization transactions and for other general corporate purposes. We also intend to cause AT Umbrella LLC to use the net proceeds for investments in technology, infrastructure, training and strategic acquisitions of, or investments in, other businesses or technologies that we believe will complement our current business and expansion strategies, although we do not currently have any agreements or commitments for any specific material acquisitions or investments.

Pending other use of the net proceeds from this offering, we intend to invest the net proceeds of this offering in a variety short-term, interest-bearing, investment-grade securities and government securities.

 

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DIVIDEND POLICY

We have never declared or paid any dividends on our Class A common stock. Holders of our non-economic Class B common stock are not entitled to participate in any cash dividends declared by our board of directors. We currently intend to retain all available funds and any future earnings for the operation and expansion of our business. Accordingly, following this offering, we do not anticipate declaring or paying dividends in the foreseeable future. The payment of any future dividends will be at the discretion of our board of directors and will depend on our results of operations, capital requirements, financial condition, prospects, contractual arrangements, any limitations on payment of dividends present in our future debt agreements, and other factors that our board of directors may deem relevant. Because our business is conducted through our subsidiaries, dividends, distributions and other payments from, and cash generated by, our subsidiaries will be our principal sources of cash to fund operations and pay dividends. Accordingly, our ability to pay dividends to our stockholders is dependent on the earnings and distributions of funds from our subsidiaries. Our ability to pay cash dividends on our capital stock in the future may also be limited by the terms of any preferred securities we may issue or agreements governing any additional indebtedness we may incur.

Following this offering and subject to funds being legally available, we intend to cause AT Umbrella LLC to make distributions to each holder of economic interests in AT Umbrella LLC, including holders of Class X Umbrella Units, LTIP Units, CA Notes and HO Note, in respect of the U.S. federal, state and local income tax liability attributable to each holder’s allocable share of taxable income of AT Umbrella LLC, calculated using an assumed tax rate equal to the highest marginal tax rate for a natural person resident in the state of the United States that has the highest individual income tax rates. Tax distributions will be made quarterly, on an estimated basis. Tax distributions made in respect of Class X Umbrella Units (but not LTIP Units) will generally be made pro rata in respect of such Units, as described in the AT Umbrella Amended and Restated Limited Liability Company Agreement. The declaration and payment of any dividends by Andersen will be at the sole discretion of our board of directors, which may change our dividend policy at any time. Our board of directors will take into account:

 

•

general economic and business conditions;

 

•

our financial condition and operating results;

 

•

our available cash and cash equivalents and current and anticipated cash needs;

 

•

our capital requirements;

 

•

contractual, legal, tax and regulatory restrictions and implications on the payment of dividends by us to our stockholders or by our subsidiaries (including AT Umbrella LLC) to us; and

 

•

such other factors as our board of directors may deem relevant.

Andersen Group Inc. is a holding company and, immediately after the consummation of the reorganization transactions described in this prospectus and this offering, our sole material asset will be our indirect ownership interests in Andersen Tax Holdings LLC through our ownership of approximately    % of the Class X Umbrella Units in AT Umbrella LLC, which in turn will own all ownership interests in Andersen Tax LLC. As a result, our ability to declare and pay dividends to the holders of our Class A common stock will be subject to the ability of AT Umbrella LLC to provide distributions to us, and there can be no assurance that AT Umbrella LLC and its subsidiaries will generate sufficient cash flow to distribute funds to us or that applicable state law and contractual restrictions, including negative covenants in debt instruments of AT Umbrella LLC and its subsidiaries, will permit such distributions. If AT Umbrella LLC makes such distributions to us, the other Class X Umbrella Unit holders generally will be entitled to receive equivalent distributions from AT Umbrella LLC. However, because we must pay taxes and make payments under the Tax Receivable Agreement, amounts ultimately distributed as dividends to holders of our Class A common stock are expected to be less than the amounts distributed by AT Umbrella LLC to the other Class X Umbrella Unit holders on a per share basis. See the section titled “Certain Relationships and Related Party Transactions—Tax Receivable Agreement.”

 

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Assuming AT Umbrella LLC makes distributions to its members in any given year, the determination to pay dividends, if any, to our Class A common stockholders out of the portion, if any, of such distributions remaining after our payment of taxes, Tax Receivable Agreement payments and expenses (any such portion, an excess distribution) will be made by our board of directors. Because our board of directors may determine to pay or not pay dividends to our Class A common stockholders, our Class A common stockholders may not necessarily receive dividend distributions relating to excess distributions, even if AT Umbrella LLC makes such distributions to us. Holders of our Class B common stock are not entitled to participate in any cash dividends declared by our board of directors. See the section titled “Risk Factors—Risks Relating to Our Organizational Structure— AT Umbrella LLC may make distributions of cash to us in excess of the amounts we use to make distributions to our stockholders and pay our expenses (including our taxes and payments under the Tax Receivable Agreement). To the extent we do not distribute such excess cash as dividends on our Class A common stock, the other Class X Umbrella Unit holders would benefit from any value attributable to such cash as a result of their ownership of Class A common stock upon a redemption or exchange of their Class X Umbrella Units.”

 

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CAPITALIZATION

The following table sets forth our cash and cash equivalents and our total capitalization, as of June 30, 2025:

 

•

on an actual basis for Andersen Tax Holdings LLC;

 

•

on a pro forma basis to reflect (1) distributions planned and paid after the latest balance sheet date but prior to the completion of this offering described in the section titled “Unaudited Pro Forma Financial Information,” (2) the reorganization transactions and post-IPO structure (excluding the Offering) described in the section titled “Organizational Structure” (the Reorganization), and (3) the filing of our amended and restated certificate of incorporation, which will occur immediately prior to the completion of this offering; and

 

•

on a pro forma as adjusted basis to reflect the pro forma adjustments set forth above and the issuance and sale of shares of Class A common stock in this offering at the assumed initial public offering price of $    per share, the midpoint of the price range set forth on the cover page of this prospectus, after deducting underwriting discounts and commissions and estimated offering expenses payable by us, and the application of the proceeds therefrom as described in the section titled “Use of Proceeds.”

For more information, see the sections titled “Organizational Structure,” “Use of Proceeds” and “Unaudited Pro Forma Financial Information.” You should read this information together with the section titled “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and the consolidated financial statements of Andersen Tax Holdings LLC and the related notes included elsewhere in this prospectus.

 

		As of June 30, 2025
		Actual				Pro Forma				Pro Forma As Adjusted(1)
		(unaudited)
		(in thousands, except share and per share data)
Cash and cash equivalents		$	78,945			$				$
Promissory notes(2)		$	—			$				$
Members’ equity/stockholder’s equity:
Members’ equity		$	198,351			$				$
Preferred stock, par value $0.0001 per share: no shares authorized, issued and outstanding, actual;   shares authorized, no shares issued and outstanding, pro forma and pro forma as adjusted			—
Class A common stock, par value $0.0001 per share: no shares authorized, issued and outstanding, actual;   shares authorized,   shares issued outstanding, pro forma; and   shares authorized,   shares issued and outstanding, pro forma as adjusted			—
Class B common stock, par value $0.0001 per share: no shares authorized, issued and outstanding, actual;   shares authorized,   shares issued outstanding, pro forma; and   shares authorized,   shares issued and outstanding, pro forma as adjusted			—
Additional paid-in capital			—
Accumulated deficit			—
Non-controlling interest			—
Total members’ equity/stockholders’ equity			198,351
Total capitalization		$	198,351			$				$

 

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(1)

The pro forma as adjusted information set forth above is illustrative only and will change based on the actual initial public offering price and other terms of this offering determined at pricing. Each $1.00 increase or decrease in the assumed initial public offering price of $    per share, the midpoint of the price range set forth on the cover page of this prospectus, would increase or decrease, as applicable, pro forma as adjusted cash and cash equivalents, additional paid-in capital, total members’ equity/stockholders’ equity and total capitalization by approximately $    million, assuming that the number of shares offered by us, as set forth on the cover page of this prospectus, remains the same, and after deducting underwriting discounts and commissions. A 1.0 million share increase or decrease in the number of shares offered by us would increase or decrease, as applicable, pro forma as adjusted cash and cash equivalents, additional paid-in capital, total members’ equity/stockholders’ equity and total capitalization by approximately $    million, assuming that the assumed initial offering price to the public remains the same, and after deducting underwriting discounts and commissions.

(2)

The aggregate principal amount of the Member Notes and CA Notes is subject to a true-up mechanism following the issuance of these notes to reflect the final calculation of the amount of the related capital accounts, which must be determined on or before December 31, 2025. As a result, the amount of promissory notes could increase or decrease to reflect the aggregate amount of the true-up adjustments.

The number of shares of our Class A common stock to be outstanding after this offering is based on the membership interests of AT Umbrella LLC outstanding as of   , 2025 and, after giving effect to the reorganization transactions, excludes:

 

•

shares of Class A common stock reserved for future issuance under our 2025 Equity Incentive Plan, which we intend to adopt prior to the completion of this offering; and

 

•

shares of Class A common stock reserved for issuance upon the redemption or exchange of Class X Umbrella Units (together with corresponding shares of our Class B common stock).

Our 2025 Equity Incentive Plan will also provide for automatic annual increases in the number of shares reserved under this plan, as more fully described in the section titled “Executive Compensation—Equity Incentive Plans.”

 

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DILUTION

If you invest in our Class A common stock, your ownership interest will be immediately diluted to the extent of the difference between the initial public offering price per share of our Class A common stock in this offering and the pro forma as adjusted net tangible book value per share of our Class A common stock immediately after this offering.

Our pro forma net tangible book value as of June 30, 2025 would have been approximately $  million, or $    per share. Our pro forma net tangible book value per share represents our total tangible assets less our total liabilities, divided by the number of shares common stock outstanding, after giving effect to the reorganization transactions and post-IPO structure (excluding the Offering) described in the section titled “Organizational Structure” (based on the assumed initial public offering price of $    per share, the midpoint of the price range set forth on the cover page of this prospectus), and assuming that all of the holders of Class X Umbrella Units in AT Umbrella LLC exchanged their Class X Umbrella Units for newly issued shares of Class A common stock on a one-for-one basis and that no LTIP Units are outstanding.

After giving effect to the reorganization transactions, including the issuance of the CA Notes and the HO Note, described under the section titled “Organizational Structure,” including the application of the proceeds from this offering as described in the section titled “Use of Proceeds,” assuming that Aggregator, or its permitted transferees in connection with the redemption, redeem or exchange all or any portion of their Class X Umbrella Units for newly issued shares of our Class A common stock on a one-for-one basis and that no LTIP Units are outstanding, and after giving further effect to the sale of    shares of Class A common stock in this offering at the assumed initial public offering price of $    per share (the midpoint of the price range on the cover page of this prospectus), our pro forma as adjusted net tangible book value as of June 30, 2025 would have been $     million, or $     per share. This amount represents an immediate increase in pro forma as adjusted net tangible book value of $     per share to our existing stockholders and an immediate dilution of $     per share to investors participating in this offering. We determine dilution per share to investors participating in this offering by subtracting pro forma as adjusted net tangible book value per share after this offering from the assumed initial public offering price per share paid by investors participating in this offering.

 

Assumed initial public offering price per share						$
Pro forma net tangible book value (deficit) per share as of June 30, 2025		$
Increase in pro forma net tangible book value per share attributable to new investors participating shares in this offering
Pro forma as adjusted net tangible book value per share immediately after this offering
Dilution per share to new investors in this offering						$

The dilution information discussed above is illustrative only and will change based on the actual initial public offering price and other terms of this offering determined at pricing. Each $1.00 increase or decrease in the assumed initial public offering price of $    per share, the midpoint of the price range set forth on the cover page of this prospectus, would increase or decrease, as applicable, the pro forma as adjusted net tangible book value per share by $    per share and the dilution per share to investors participating in this offering by $    per share, assuming that the number of shares offered by us, as set forth on the cover page of this prospectus, remains the same and after deducting underwriting discounts and commissions. We may also increase or decrease the number of shares we are offering. A 1.0 million share increase or decrease in the number of shares offered by us, as set forth on the cover page of this prospectus, would increase or decrease, as applicable, the pro forma as adjusted net tangible book value per share by $    and decrease the dilution per share to investors participating in this offering by approximately $    , assuming the initial public offering price of $    per share, the midpoint of the price range set forth on the cover page of this prospectus, remains the same and after deducting underwriting discounts and commissions. The aggregate

 

78

principal amounts of the Member Notes and the CA Notes are subject to a true-up mechanism following the issuance of these notes to reflect the final calculation of the amount of the related capital accounts, which must be determined on or before December 31, 2025. As a result, total liabilities could increase or decrease to reflect the aggregate amount of the true-up adjustments.

If the underwriters exercise their over-allotment option in full, the pro forma as adjusted net tangible book value of our Class A common stock would increase to $     per share, representing an immediate increase in the pro forma net tangible book value per share to existing stockholders of $    per share and an immediate dilution of $    per share to investors participating in this offering.

The following table summarizes as of June 30, 2025, on the pro forma as adjusted basis described above, the number of shares of our Class A common stock, the total consideration and the average price per share (1) paid to us by our existing stockholders and (2) to be paid by investors purchasing shares of our Class A common stock in this offering at the assumed initial public offering price of $    per share, the midpoint of the price range set forth on the cover page of this prospectus, before deducting underwriting discounts and commissions and estimated offering expenses payable by us.

 

		Shares of Class A Common Stock Purchased								Total Consideration								Weighted- Average Price Per Share
		Number				Percent				Amount				Percent
Existing stockholders before this offering								%		$						%		$
New investors purchasing shares in this offering																		$
Total							100.0	%			$				100.0	%

Each $1.00 increase or decrease in the assumed initial public offering price of $     per share, which is the midpoint of the price range set forth on the cover page of this prospectus, would increase or decrease, as applicable, the total consideration paid by new investors and total consideration paid by all stockholders by approximately $   million, assuming that the number of shares of Class A common stock offered by us, as set forth on the cover page of this prospectus, remains the same and after deducting underwriting discounts and commissions. Similarly, each increase or decrease of 1.0 million shares in the number of shares of our Class A common stock offered in this offering would increase or decrease, as applicable, total consideration paid by new investors and total consideration paid by all stockholders by approximately $   million, assuming the initial public offering price remains the same and after deducting underwriting discounts and commissions.

If the underwriters exercise their over-allotment option in full, the number of shares held by the existing stockholders after this offering would be reduced to     shares, or     % of the total number of shares of our Class A common stock outstanding after this offering, and the number of shares held by new investors would increase to     shares, or    % of the total number of shares of our Class A common stock outstanding after this offering.

The foregoing tables and calculations above exclude:

 

•

shares of Class A common stock reserved for future issuance under our 2025 Equity Incentive Plan, which we intend to adopt prior to the completion of this offering.

 

•

shares of Class A common stock reserved for issuance upon the redemption or exchange of Class X Umbrella Units (together with corresponding shares of our Class B common stock).

Our 2025 Equity Incentive Plan will also provide for automatic annual increases in the number of shares reserved under this plan, as more fully described in the section titled “Executive Compensation—Equity Incentive Plans.”

 

79

In the future, to the extent that outstanding new options or other securities are issued under our 2025 Equity Incentive Plan, or we issue additional shares of Class A common stock in the future, including in connection with acquisitions, or as we admit new Managing Directors from time to time, whom we currently expect will become indirect owners of Class X Umbrella Units or LTIP Units of AT Umbrella LLC along with corresponding paired shares of Class B common stock held by Aggregator, but to whom we may alternatively issue Class A common stock and/or Class B common stock, there will be further dilution to investors participating in this offering. In addition, we may choose to raise additional capital because of market conditions or strategic considerations, even if we believe that we have sufficient funds for our current or future operating plans. If we raise additional capital through the sale of equity or convertible debt securities, the issuance of these securities could result in further dilution to our stockholders.

 

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UNAUDITED PRO FORMA FINANCIAL INFORMATION

The unaudited condensed pro forma income statements for the year ended December 31, 2024 and the six months ended June 30, 2025 give effect to (i) the reorganization transactions described under the section titled “Organizational Structure” and (ii) certain adjustments in connection with the offering, as if each had occurred on January 1, 2024.

The unaudited condensed consolidated pro forma balance sheet as of June 30, 2025 gives effect to (i) distributions planned and paid after the latest balance sheet date but prior to this offering (the Distribution Transactions); (ii) the reorganization transactions and post-IPO structure (excluding the Offering as defined in (iii)) described in the section titled “Organizational Structure” (the Reorganization) and (iii) the sale of shares of Class A common stock in this offering and the application of the net proceeds from this offering (the Offering and collectively with the Distribution Transactions and Reorganization, the Transactions) as if each had occurred on June 30, 2025. See the sections titled “Capitalization” and “Use of Proceeds.”

The unaudited pro forma financial information has been prepared by our management and is based on Andersen Tax Holdings LLC’s and its subsidiaries’ consolidated historical financial statements and the assumptions and adjustments described in the notes to the unaudited pro forma financial information below. The presentation of the unaudited pro forma financial information is prepared in conformity with Article 11 of Regulation S-X.

The historical financial information for the year ended December 31, 2024 and the six months ended June 30, 2025 has been derived from Andersen Tax Holdings LLC’s and its subsidiaries’ consolidated financial statements and related notes included elsewhere in this prospectus.

For purposes of the unaudited pro forma financial information, we have assumed that      shares of Class A common stock will be issued by us at a price per share equal to the midpoint of the price range set forth on the cover of this prospectus, and as a result, immediately following the completion of this offering, the ownership percentage represented by Class X Umbrella Units not held by us will be     %, and the net income attributable to Class X Umbrella Units not held by us will accordingly represent     % of our net income. If the underwriters’ over-allotment option is exercised in full, the ownership percentage represented by Class X Umbrella Units not held by us will be     % and the net income attributable to Class X Umbrella Units not held by us will accordingly represent     % of our net income. The higher percentage of net income attributable to Class X Umbrella Units not held by us over the ownership percentage of Class X Umbrella Units not held by us is due to the recognition of additional current income tax expense after giving effect to the adjustments for the reorganization transactions and this offering that is entirely attributable to our interest.

We based the pro forma adjustments on available information and on assumptions that we believe are reasonable under the circumstances in order to reflect, on a pro forma basis, the impact of the relevant transactions on the historical financial information of Andersen Tax Holdings LLC and its subsidiaries. See the notes to unaudited pro forma financial information below for a discussion of assumptions made.

The unaudited pro forma financial information should be read together with “Capitalization,” “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and Andersen Tax Holdings LLC’s and its subsidiaries’ financial statements and related notes thereto included elsewhere in this prospectus.

The unaudited pro forma financial information has been prepared for illustrative purposes only and is not necessarily indicative of financial results that would have been attained had the Transactions occurred on the dates indicated above or that could be achieved in the future. Future results may vary significantly from the results reflected in the unaudited consolidated and combined pro forma income statement and should not be relied on as an indication of our results after the completion of this offering and the other transactions contemplated by such unaudited pro forma financial information. However, our management believes that the assumptions provide a reasonable basis for presenting the significant effects of the transactions as contemplated and that the Transactions give appropriate effect to those assumptions and are properly applied in the unaudited pro forma financial information.

 

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The pro forma adjustments related to the Transactions, are described in the notes to the unaudited pro forma financial information, and principally include the Transactions described under the section titled “Organizational Structure.”

The pro forma adjustments related to the Offering are described in the notes to the unaudited pro forma financial information, and include:

 

•

the issuance and sale of shares of our Class A common stock to the purchasers in this offering in exchange for net proceeds of approximately $     million, assuming that the shares are offered at $    per share (the midpoint of the price range set forth on the cover page of this prospectus), after deducting underwriting discounts and commissions but before offering expenses payable by us;

 

•

provision for U.S. federal and state income taxes of Andersen Group Inc. as a taxable corporation at an effective rate of     % for the year ended December 31, 2024 (the effective rate was calculated using the new U.S. federal income tax rate of     %);

 

•

the application by Andersen Group Inc. of the proceeds of this offering to purchase     Class X Umbrella Units from AT Umbrella LLC and the application of such proceeds by AT Umbrella LLC to pay fees and expenses of approximately $     million in connection with this offering and the reorganization transactions; and

 

•

the grant of restricted stock units (RSUs) under our 2025 Equity Incentive Plan in connection with this offering.

As a public company, we will implement additional procedures and processes for the purpose of addressing the standards and requirements applicable to public companies. We expect to incur additional annual expenses related to these procedures and processes including, among other things, additional directors’ and officers’ liability insurance, director fees, fees related to SEC reporting requirements, transfer agent fees, hiring additional accounting, legal and administrative personnel, increased auditing and legal fees and similar expenses. We have not included any pro forma adjustments relating to these costs.

In connection with the completion of this offering, we will enter into the Tax Receivable Agreement with Aggregator, which provides for the payment by us to certain holders of Class X Umbrella Units who are or may become parties to such agreement of 85% of the tax benefits, if any, that we realize, or, in some circumstances, are deemed to realize, as a result of any increase in tax basis in the asset of AT Umbrella LLC and its flow-through subsidiaries resulting from purchases of Class X Umbrella Units from such Class X Umbrella Unit holders with proceeds of this offering or resulting from the exchanges of Class X Umbrella Units for shares of our Class A common stock or cash in the future and certain other tax benefits related to entering into the Tax Receivable Agreement, including tax benefits attributable to payments under the Tax Receivable Agreement. The Tax Receivable Agreement will be accounted for as a contingent liability, with amounts accrued when considered probable and reasonably estimable.

Due to the uncertainty in the amount and timing of future redemptions or exchanges, the unaudited pro forma consolidated financial information assumes that no redemptions or exchanges have occurred and, therefore, no increases in tax basis in assets or other tax benefits that may be realized thereunder have been assumed in the unaudited pro forma consolidated financial information. However, if all of the pre-IPO owners were to exchange their interests, we would recognize a deferred tax asset of approximately $     million and a liability of approximately $     million, assuming (i) all exchanges occurred on the same day; (ii) a price of $     per share (the midpoint of the price range set forth on the cover page of this prospectus); (iii) a constant corporate tax rate of     %; (iv) we will have sufficient taxable income to fully utilize the tax benefits; and (v) no material changes in tax law.

 

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Unaudited Pro Forma Condensed Consolidated and Combined Income Statement

For the Year Ended December 31, 2024

($ in thousands)

See accompanying notes to unaudited pro forma financial information.

 

		Historical Andersen Tax Holdings LLC(1)				Reorganization Adjustments								As Adjusted Before Offering Adjustments				Offering Adjustments								Andersen Group Inc. Pro Forma
Revenue		$	731,593			$	—							$	731,593
Operating expenses:
Cost of services (excluding depreciation and amortization)			461,777				188,036				(7	)			649,813								(8	)
Sales, general and administrative			131,947				45,059				(7	)			177,006								(8	)
Equity restructuring costs			—				199,399				(6	)			199,399
Depreciation and amortization			8,325				—								8,325
Total operating expenses			602,049				432,494								1,034,543
Operating income			129,544				(432,494	)							(302,950	)
Interest income			4,524				—								4,524
Interest expense			(64	)			(27,721	)			(5	)			(27,785	)
Other income, net			3,192				—								3,192
Income (loss) before income tax expense			137,196				(460,215	)							(323,019	)
Income tax expense/(benefit)			2,395				2,814				(2	)			5,209								(2	)
Net income (loss)		$	134,801			$	(463,029	)						$	(328,228	)
Less: Net loss attributable to non-controlling interests			—				(292,679	)			(3	)			(292,679	)
Net income (loss) attributable to Andersen Group Inc.		$	134,801			$	(170,350	)						$	(35,549	)
Pro forma net loss per share
Pro forma weighted average shares of Class A common stock outstanding
Basic																															(4	)
Diluted																															(4	)
Net loss available to Class A common stock per share
Basic																															(4	)
Diluted																															(4	)

 

Notes to Unaudited Pro Forma Condensed Consolidated and Combined Income Statement

 

(1)

Andersen Group Inc. was incorporated as a Delaware corporation in April 2025 and has no material assets or results of operations until the completion of this offering and therefore its historical income statement is not shown in a separate column in this unaudited pro forma consolidated and combined income statement. This column represents the historical consolidated financial statements of Andersen Tax Holdings LLC and its subsidiaries. Andersen Tax Holdings LLC is a wholly owned subsidiary of AT Umbrella LLC, a holding company.

(2)	Andersen Tax LLC, an indirect wholly owned subsidiary of AT Umbrella LLC, has been, and will continue to be, taxed as a disregarded entity for U.S. federal and state income tax purposes. As such, income

 

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generated by Andersen Tax LLC will flow through to its indirect partners, including us, and is generally not subject to tax at the Andersen Tax LLC level. However, certain state and local jurisdictions impose an entity level income tax and these amounts are reflected as income taxes in the unaudited pro forma consolidated and combined income statement. Following the Transactions, we will be subject to U.S. federal income taxes, in addition to state and local income taxes with respect to our allocable share of any taxable income of Andersen Tax LLC. As a result, the unaudited pro forma consolidated and combined income statement reflects adjustments to our income tax expense to reflect an effective income tax rate of (1.6)%, which was calculated assuming the U.S. federal and state and local rates currently in effect. The effective tax rate differs from the U.S. federal statutory rate of 21% primarily related to (i) non-controlling interest as Andersen Group Inc. only accrues taxes on its allocable share of income, (ii) non-recurring equity restructuring expense that is not deductible for tax purposes, (iii) non-cash compensation expense that is not deductible for tax purposes and (iv) state, local and foreign income taxes.

(3)

Upon completion of the Transactions, Andersen Group Inc. will become the sole managing member of AT Umbrella LLC. Although we will have a minority economic interest in AT Umbrella LLC, because we will have a controlling financial interest under GAAP in AT Umbrella LLC due to our position as its sole managing member, we will consolidate the financial results of AT Umbrella LLC. As a result, we will report a non-controlling interest related to the Class X Umbrella Units held by Aggregator on our consolidated statements of operations. Following this offering, assuming the underwriters do not exercise their over-allotment option, Andersen Group Inc. will own    % of the economic interest of AT Umbrella LLC and Aggregator will own the remaining    % of the economic interest of AT Umbrella LLC. Net income attributable to non-controlling interests will represent    % of the income before income taxes of Andersen Group Inc. If the underwriters exercise their over-allotment option in full, Andersen Group Inc. will own    % of the economic interest of AT Umbrella LLC and Aggregator will own the remaining     % of the economic interest of AT Umbrella LLC and net income attributable to non-controlling interests would represent    % of the income before income taxes of AT Umbrella LLC. The calculation of net income attributable to non-controlling interests is based on preliminary estimates and is subject to revision upon the finalization of the Transactions.

(4)

The weighted average number of shares underlying the basic earnings per share calculation reflects shares of Class A common stock outstanding. Shares of Class A common stock outstanding after the offering are included within the weighted average number of shares as they are the only outstanding securities which participate in distributions or dividends by Andersen Group Inc. Proceeds from the sale of Class A common stock in this offering will be used to purchase Class X Umbrella Units, and we will cause AT Umbrella LLC to use the proceeds it receives from the sale of Class X Umbrella Units to us to pay fees and expenses in connection with this offering and the reorganization transactions and for general corporate purposes. Pro forma diluted income per share is computed by adjusting pro forma net income attributable to Andersen Group Inc. and the weighted average shares of Class A common stock outstanding to give effect to potentially dilutive securities that qualify as participating securities using the treasury stock method, as applicable. Shares of Class B common stock are not participating securities and therefore are not included in the calculation of pro forma basic income per share. Potentially dilutive shares includes      RSUs and Class X Umbrella Units held by noncontrolling interest owners which enable the holders to exchange Class X Umbrella Units for Class A common stock on a one-for-one basis. The dilutive effects of the restricted stock units and the exchangeable non-controlling interests were not included in the computation of diluted loss per share because the effect would have been anti-dilutive.

(5)

In connection with the reorganization transactions discussed in the section titled “Organizational Structure,” AT Umbrella LLC will issue two types of promissory notes to Aggregator representing (1) cash distributions to retiring or retired Managing Directors (HO Note) and (2) return of capital to members of the Management Holdcos (CA Notes). We expect the HO Note to accrue interest at 7.50% payable over eight years. We expect the CA Notes to accrue interest between 6.50% to 7.50% payable over one to seven years. The pro-forma adjustment reflects aggregate incremental interest expense of $27.7 million for the year ended December 31, 2024, with $15.4 million for the CA Notes and $12.3 million for the HO Note. The aggregate principal amount of the CA Notes is subject to a true-up mechanism following the issuance of these notes to reflect the final calculation of the amount of the related Member Notes, which must be

 

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determined on or before December 31, 2025. As a result, the principal amount of the CA Notes could increase or decrease to reflect the aggregate amount of the true-up adjustments.

(6)

In connection with the reorganization transactions discussed in the section titled “Organizational Structure,” Andersen Tax LLC will incur certain equity restructuring expenses as a result of the exchange of historical equity interests at the Management Holdcos for new Class H Aggregator Units and Class X Aggregator Units. The new Class H Aggregator Units will include a higher income allocation to unit holders than under the previous Management Holdco units held by such unit holders, which results in an incremental one-time expense that will not recur beyond 12 months after the transaction expense to be recognized on the date of the completion of the reorganization transactions. The pro-forma adjustment reflects incremental expense for these Class H Aggregator Units of $164.2 million. The value for the equity restructuring costs associated with Class H Aggregator Units was estimated using a discounted cash flow methodology. Certain holders of historical equity interests at the Management Holdcos will also receive Class X Aggregator Units and a return of contributed capital through the Member Notes which results in an incremental one-time expense that will not recur beyond 12 months after the transaction for these Class X Aggregator Units of $35.2 million. The value for the equity restructuring costs associated with Class X Aggregator Units was estimated as the difference between the value of the Class X Aggregator Units and the value of the historical equity interests at the Management Holdcos. These adjustments are based on preliminary estimates and are subject to revision upon the finalization of the Transactions.

(7)

In connection with the reorganization transactions discussed in the section titled “Organizational Structure,” Andersen Tax LLC will incur certain compensation expenses as a result of the exchange of historical equity interests of the Management Holdcos for new Class X Aggregator Units with Managing Directors of Andersen Tax LLC, of which a portion of the new interests will be subject to vesting conditions. These Class X Aggregator Units will vest over a five-year service period. The portion of units subjected to service-based vesting conditions will result in incremental compensation expense to be recognized over the requisite service period. The pro-forma adjustment reflects incremental compensation expense of $233.1 million associated with the expected twelve months of compensation expense for Class X Aggregator Units, of which $188.0 million will be recognized in cost of services and $45.1 million will be recognized in sales, general and administrative expenses. We estimate that we will recognize aggregate compensation expense of $1,031.2 million through 2030 related to these units. The value for the compensation expense associated with Class X Aggregator Units was estimated using a market approach methodology. This adjustment is based on preliminary estimates and is subject to revision upon the finalization of the Transactions.

(8)

This adjustment represents the period increase in compensation expense we expect to incur as a result of the grants of RSUs under our 2025 Equity Incentive Plan that we intend to make in connection with this offering. We estimate that we will recognize aggregate equity-based compensation expense of $     million through 2031 related to these RSUs allocated between cost of services and sales, general and administrative expense.

 

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Unaudited Pro Forma Condensed Consolidated and Combined Income Statement

For the Six Months Ended June 30, 2025

($ in thousands)

See accompanying notes to unaudited pro forma financial information.

 

		Historical Andersen Tax Holdings LLC(1)				Reorganization Adjustments								As Adjusted Before Offering Adjustments				Offering Adjustments								Andersen Group Inc. Pro Forma
Revenue		$	384,058			$	—							$	384,058
Operating expenses:
Cost of services (excluding depreciation and amortization)			343,206				87,116				(6	)			430,322								(7	)
Sales, general and administrative			89,241				20,876				(6	)			110,117								(7	)
Depreciation and amortization			4,131				—								4,131
Total operating expenses			436,578				107,992								544,570
Operating income			(52,520	)			(107,992	)							(160,512	)
Interest income			2,230				—								2,230
Interest expense			(247	)			(13,860	)			(5	)			(14,107	)
Other income, net			2,293				—								2,293
Income before income tax expense			(48,244	)			(121,852	)							(170,096	)
Income tax expense/(benefit)			(2,837	)			9,124				(2	)			6,287
Net loss		$	(45,407	)		$	(130,976	)						$	(176,383	)
Less: Net loss attributable to non-controlling interests			—				(155,273	)			(3	)			(155,273	)
Net loss attributable to Andersen Group Inc.		$	(45,407	)		$	24,297							$	(21,110	)
Pro forma net loss per share
Pro forma weighted average shares of Class A common stock outstanding
Basic																															(4	)
Diluted																															(4	)
Net loss available to Class A common stock per share
Basic																															(4	)
Diluted																															(4	)

Notes to Unaudited Pro Forma Condensed Consolidated and Combined Income Statement

 

(1)

Andersen Group Inc. was incorporated as a Delaware corporation in April 2025 and has no material assets or results of operations until the completion of this offering and therefore its historical income statement is not shown in a separate column in this unaudited pro forma consolidated and combined income statement. This column represents the historical consolidated financial statements of Andersen Tax Holdings LLC and its subsidiaries. Andersen Tax Holdings LLC is a wholly owned subsidiary of AT Umbrella LLC, a holding company.

 

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