What changed in this filing

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Item 1A. Risk Factors

2025-02-20 compared with 2024-02-28 · 55 added, 120 removed, 574 unchanged (23% of the section changed)

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• There are particular challenges in addressing the market for healthcare interoperability solutions.

• Our industry is undergoing rapid technological changes and we may not be able to keep up.

• Our industry is undergoing rapid technological changes, including with the introduction of artificial intelligence (“AI”), and we may not be able to keep up.

• We have made and expect to continue to make acquisitions that could disrupt our operations and harm our operating results.

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Risks Related To Our Common Stock

• We cannot be certain that an active trading market for our common stock will continue and stock price has in the past and may in the future fluctuate significantly.

• We cannot be certain that an active trading market for our common stock will continue to be available and our stock price has in the past and may in the future fluctuate significantly.

• Shares of our common stock generally will be eligible for resale, which may cause our stock price to decline.

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federal income tax purposes, Ziff Davis, Consensus and Ziff Davis stockholders could be subject to significant tax liabilities, and, in certain circumstances, Consensus could be required to indemnify Ziff Davis for material taxes and other related amounts pursuant to indemnification obligations under the tax matters agreement.

• We may not be able to engage in desirable strategic or capital-raising transactions following the separation.

• We have a limited history of operating as an independent company and we have incurred and expect to continue to incur increased administrative and other costs following the separation by virtue of our status as an independent public company.

Our historical financial information is not necessarily representative of the results that we would have achieved as a separate, publicly traded company and may not be a reliable indicator of our future results.

• Our debt obligations could adversely affect our business and our ability to meet our obligations and pay dividends.

• We and Ziff Davis continue to have some obligations under transaction agreements that were executed as part of the separation.

Risks Related To Our Business

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There are ongoing efforts by governmental and nongovernmental entities to create a universally accepted method for electronically signing documents.

Widespread adoption of so-called “digital signatures” could, in the future, reduce demand for our fax services where the fax service is primarily being used to evidence a wet signature.

Widespread adoption of so-called “digital signatures” have reduced, and could continue to in the future reduce demand for our fax services where the fax service is primarily being used to evidence a wet signature.

While we have introduced a digital signature product, other companies have offered such products for longer and have greater customer adoption.

If future adoption of digital signature products results in a reduction for our fax services without a

corresponding adoption of our digital signature or other products, it could have a material adverse effect on our business, prospects, financial condition, operating results and cash flows.

If future adoption of digital signature products results in a reduction for our fax services without a corresponding adoption of our digital signature or other products, it could have a material adverse effect on our business, prospects, financial condition, operating results and cash flows.

Developments in the healthcare industry could adversely affect our business.

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Industry changes affecting healthcare, such as government regulation or private initiatives that affect the manner in which healthcare industry participants exchange data, consolidation of healthcare industry participants, reductions in governmental funding for healthcare or adverse changes in business or economic conditions affecting healthcare industry participants could affect the market for our offerings.

See the risk factor titled “Changes in regulations relating to health information communications protocols could affect our business” under the heading “Risks Related to Regulation Including Taxation.” The healthcare industry has changed significantly in recent years, and we expect that significant changes to the healthcare industry will continue to occur.

See the risk factor titled “Changes in regulations relating to health information communication protocols could affect our business” under the heading “Risks Related to Regulation Including Taxation.” The healthcare industry has changed significantly in recent years, and we expect that significant changes to the healthcare industry will continue to occur.

However, the timing and impact of developments in the healthcare industry are difficult to predict.

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foundational, structural, semantic and organizational.

Customers or vendors could use any of these four components to define their particular “interoperability solution.” Separately, the Center for Medicare and Medicaid Services further defined a fifth component of interoperability that includes patients, which is not included in the

HIMSS definition.

Furthermore, the Office of the National Coordinator for Health Information Technology (the “ONC”) has developed another definition that is included in the 21st Century Cures Act, which includes the concept of “information blocking” as a component of healthcare interoperability.

This wide variety of definitions has the potential to create a risk of confusion in the market, or allow competitors to reframe the problem to their advantage in a competitive situation, potentially allowing less robust solutions to hold themselves out as healthcare interoperability solutions.

This wide variety of definitions has the potential to create a risk of confusion in the market, or allow competitors to reframe the problem to their advantage in a competitive situation, potentially

allowing less robust solutions to hold themselves out as healthcare interoperability solutions.

We expect to encounter significant competition for customers as the healthcare interoperability market develops.

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and other countries in desirable locations at a reasonable cost and offer our services to our prospective customers without restrictions.

Our ability to procure and distribute numbers depends on factors such as applicable regulations, the practices of telecommunications carriers that provide numbers, the cost of these numbers and the level of demand for new numbers.

Our ability to procure and distribute numbers depends on factors such as

applicable regulations, the practices of telecommunications carriers that provide numbers, the cost of these numbers and the level of demand for new numbers.

For example, several years ago the Federal Communications Commission (the “FCC”) conditionally granted petitions by Connecticut and California to adopt specialized “unified messaging” area codes, but neither state has adopted such a code.

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We may be subject to increased rates for the telecommunications services we purchase from regulated carriers which could require us to either raise the retail prices of our offerings and lose customers or reduce our profit margins.

The FCC adopted wide-ranging reforms to the system under which regulated providers of telecommunications services compensate each other for the exchange of various kinds of traffic.

The FCC may continue to reform the system under which regulated providers of telecommunications services compensate each other for the exchange of various kinds of traffic.

While we are not a provider of regulated telecommunications services, we rely on such providers to offer our services to our customers.

As a result of the FCC’s reforms, regulated providers of telecommunications services are determining how the rates they charge customers like us will

change in order to comply with the new rules.

It is possible that some or all of our underlying carriers will increase the rates we pay for certain telecommunications services.

As a result of any such reforms, it is possible that some or all of our underlying carriers will increase the rates we pay for certain telecommunications services.

Should this occur, the costs we incur to provide phone number-based cloud services may increase which may require us to increase the retail price of our products services.

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We rely on encryption and authentication technology to effect secure transmission of confidential information, including customer credit and debit card numbers.

Advances in computer capabilities, new discoveries in the field of cryptography or other developments may result in a material compromise or breach of the technology used by us, our partners, vendors, or other third parties, to protect transaction and other confidential data.

Advances in computer capabilities, new discoveries in the field of cryptography or other developments, including the use of increasingly sophisticated and evolving artificial intelligence and machine learning tools, may result in a material compromise or breach of the technology used by us, our partners, vendors, or other third parties, to protect transaction and other confidential data.

Additionally, due to geopolitical tensions related to Russia’s invasion of Ukraine and the conflict in the Middle East, the risk of cyber-attacks may be elevated.

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We may not have the current capability to detect certain vulnerabilities, which may allow those vulnerabilities to persist in our systems over long periods of time.

Any system failure or security breach that causes interruptions or data loss in our operations, our partners, vendors, or other third parties, or in the

computer systems of our customers or leads to the misappropriation of our or our customers’ confidential information could result in a significant liability to us (including in the form of judicial decisions and/or settlements, regulatory findings and/or forfeitures, and other means), cause considerable harm to us and our reputation (including requiring notification to customers, regulators, and/or the media), cause a loss of confidence in our products and services, and deter current and potential customers from using our services.

Any system failure or security breach that causes interruptions or data loss in our operations, our partners, vendors, or other third parties, or in the computer systems of our customers or leads to the misappropriation of our or our customers’ confidential information could result in a significant liability to us (including in the form of judicial decisions and/or settlements, regulatory findings and/or forfeitures, and other means), cause considerable harm to us and our reputation (including requiring notification to customers, regulators, and/or the

media), cause a loss of confidence in our products and services, and deter current and potential customers from using our services.

We use vendors to assist with cybersecurity risks, but these vendors may not be able to assist us adequately in preparing for or responding to a cybersecurity incident.

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Some of these competitors offer their services at lower prices than we do.

These companies may be able to develop and expand their network infrastructures and capabilities more quickly, adapt more swiftly to new or emerging technologies and changes in customer requirements, take advantage of acquisition and other opportunities more readily and devote greater resources to the marketing and sale of their products and services than we can.

These companies may be able to develop and expand their network infrastructures and capabilities more quickly, adapt more swiftly to new or emerging technologies, such as artificial intelligence, and changes in customer requirements, take advantage of acquisition and other opportunities more readily and devote greater resources to the marketing and sale of their products and services than we can.

There can be no assurance that additional competitors will not enter markets that we are currently serving and plan to serve or that we will be able to compete effectively.

Competitive pressures may reduce our revenue, operating profits or both.

Some of our existing competitors and possible entrants may have greater brand recognition for certain products and services, more expertise in a particular segment of the market, and greater operational, strategic, technological, financial,

personnel, or other resources than we do.

Many of our competitors have access to considerable financial and technical resources with which to compete aggressively, including by funding future growth and expansion and investing in acquisitions, technologies, and research and development.

Further, emerging start-ups may be able to innovate and provide new products and services faster than we can.

Further, emerging start-ups may be able to innovate and provide new products and

services faster than we can.

In addition, competitors may consolidate with each other or collaborate, and new competitors may enter the market.

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In addition, our ability to register or protect our patents, copyrights, trademarks, trade secrets and other intellectual property may be limited in some foreign countries.

As a result, we may not be able to effectively prevent competitors in these

regions from utilizing our intellectual property, which could reduce our competitive advantage and ability to compete in those regions and negatively impact our business.

As a result, we may not be able to effectively prevent competitors in these regions from utilizing our intellectual property, which could reduce our competitive advantage and ability to compete in those regions and negatively impact our business.

We also strive to protect our intellectual property rights by relying on federal, state and common law rights, as well as contractual restrictions.

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We may be subject to risks from international operations.

To the extent we expand our business operations in countries outside the U.S., our future results could be materially adversely affected by a variety of uncontrollable and changing factors including, among others, foreign currency exchange rates;

foreign currency exchange rates;

political or social unrest, economic instability, geopolitical tensions or war in a specific country or region (including the invasion of Ukraine by Russia and the conflict in the Middle East);

trade protection measures and other regulatory requirements which may affect our ability to provide our services;

trade protection measures and other regulatory requirements, such as U.S.

imposed tariffs along with retaliatory measures taken by other nations in response to these tariffs, which may affect our ability to provide our services;

difficulties in staffing and managing international operations;

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We may be engaged in legal proceedings that could cause us to incur unforeseen expenses and could divert significant operational resources and our management’s time and attention.

From time to time, we may be subject to litigation or claims or become involved in other legal disputes or regulatory inquiries, including in the areas of patent infringement and anti-trust that could negatively affect our business operations and financial condition.

financial condition.

Such disputes could cause us to incur unforeseen expenses, divert operational resources, occupy a significant amount of our management’s time and attention and negatively affect our business operations and financial condition.

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The loss of the services of one or more of our key employees could have a material adverse effect on our business, prospects, financial condition, operating results and cash flows.

In particular, the recruitment and retention of top technical, marketing, sales and subject matter experts - particularly those with specialized knowledge, will

be critical to our success.

In particular, the recruitment and retention of top technical, marketing, sales and subject matter experts - particularly those with specialized knowledge, will be critical to our success.

Competition for such people is intense, substantial and continuous, and we may not be able to attract, integrate or retain highly qualified technical, sales or managerial personnel in the future.

In our effort to attract and retain key personnel, we may experience increased compensation costs that are not offset by either improved productivity or higher prices for our products or services.

We have observed an increasingly competitive labor market.

Increased employee turnover, changes in the availability of our employees and labor shortages more generally have resulted in, and could continue to result in, increased costs, and could adversely impact the efficiency of our operations.

Changes in the labor market, employee turnover, changes in the availability of our employees and labor shortages more generally could result in, increased costs, and could adversely impact the efficiency of our operations.

Political instability and volatility in the economy may adversely affect segments of our customers, which may result in decreased usage and advertising levels, customer acquisition and customer retention rates and, in turn, could lead to a decrease in our revenues or rate of revenue growth.

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In addition, we may sign business associate agreements in connection with the provision of the products and services developed for other third parties or in connection with certain of our other services that may transmit or store protected health information.

Failure to comply with the requirements of HIPAA or HITECH or any of the applicable federal and state laws regarding patient privacy, identity theft prevention and detection, breach notification and data security may subject us to penalties, including civil monetary penalties and, in some circumstances, criminal penalties or contractual liability under

agreements with our customers and clients.

Any failure or perception of failure of our products or services to meet HIPAA, HITECH and related regulatory requirements could expose us to risks of investigation, notification, litigation, penalty or enforcement, adversely affect demand for our products and services and force us to expend significant capital and other resources to modify our products or services to address the privacy and security requirements of our clients and HIPAA and HITECH.

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Due to economic and political conditions, tax rates in various jurisdictions may be subject to significant change.

As a result, our future effective tax rates could be affected by changes in the mix of earnings in countries with differing statutory tax rates, changes in the valuation of deferred tax assets and liabilities, or changes in tax laws or their interpretation.

As a result, our

future effective tax rates could be affected by changes in the mix of earnings in countries with differing statutory tax rates, changes in the valuation of deferred tax assets and liabilities, or changes in tax laws or their interpretation.

These changes may adversely impact our effective tax rate and harm our financial position and results of operations.

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The Controlling the Assault of Non-Solicited Pornography and Marketing Act of 2003 (the “CAN-SPAM Act”), which allows for penalties that run into the millions of dollars, requires commercial emails to include identifying information from the sender and a mechanism for the receiver to opt out of receiving future emails.

Several states have enacted additional, more restrictive and punitive laws regulating commercial email.

Several states have enacted additional, more

restrictive and punitive laws regulating commercial email.

Foreign legislation exists as well, including Canada’s Anti-Spam Legislation and the European laws that have been enacted pursuant to the GDPR and European Union Directive 2002/58/EC and its amendments.

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We cannot predict how or if these issues will be resolved nor can we evaluate any potential liability at this time.

While the EU policymakers approved a new EU-U.S.

Data Privacy Framework in 2023, the validity of data transfer mechanisms and additional safeguards remains subject to legal, regulatory, and political review and developments in both Europe and the U.S.

The Company has put into place various alternative grounds on which to rely in order to be in compliance with relevant law for the transfer of data from overseas locations to the U.S.

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The CCPA provides consumers with the right to opt out of the sale of their personal information including the requirement to include a “Do Not Sell” link on our websites and applications that sell personal data of California resident consumers.

We believe we have implemented such links to the extent necessary and our privacy policies have been updated and posted on our

We believe we have implemented such links to the extent necessary and our privacy policies have been updated and posted on our websites.

Further, on November 3, 2020, the California Privacy Rights Act (the “CPRA”) was voted into law by California residents.

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Failure or perceived failure by us to comply with our policies, applicable requirements, or industry self-regulatory principles related to the collection, use, sharing or security of personal information, or other privacy, data-retention or data-protection matters could result in a loss of user confidence in us, damage to our brands, and ultimately in a loss of users and advertising partners, which could adversely affect our business.

Changes in these or any other laws and regulations or the interpretation of them could increase our future compliance costs, limit the amount and type of data we can collect, transfer, share, or sell, make our products and services less attractive to our users, or cause us to change or limit our business practices.

Changes in these or any other laws and regulations or the

interpretation of them could increase our future compliance costs, limit the amount and type of data we can collect, transfer, share, or sell, make our products and services less attractive to our users, or cause us to change or limit our business practices.

Further, any failure on our part to comply with any relevant laws or regulations may subject us to significant civil or criminal liabilities.

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Risks Related To Our Stock

The trading market for our common stock has existed for only a short period following the distribution.

The trading market for our common stock has existed for a relatively short time since the distribution.

Our stock price may fluctuate significantly.

Prior to the distribution, there was no public market for our common stock.

An active trading market for our common stock commenced only recently following the distribution and may not be sustainable.

An active trading market for our common stock commenced only following the distribution and may not be sustainable.

The market price of our common stock has in the past, and may continue to, fluctuate significantly due to a number of factors, some of which may be beyond our control, including:

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This could have a material and adverse effect on us by, for example, leading to a decline in our share price and impairing our ability to raise additional capital, and also could result in litigation brought by our shareholders and others.

Future sales by Ziff Davis or others of our common stock, or the perception that such sales may occur, could depress our common stock price.

Ziff Davis has informed us that as of December 31, 2023, Ziff Davis owned 5% of the economic interest and voting power of our outstanding common stock.

Future sales of these shares in the public market will be subject to the volume and other restrictions of Rule 144 under the Securities Act of 1933, as amended (the “Securities Act”), for so long as Ziff Davis is deemed to be our affiliate, unless the shares to be sold are registered with the Securities and Exchange Commission, or SEC.

We are a party to a Stockholder and Registration Rights Agreement with Ziff Davis, pursuant to which we agreed, upon request of Ziff Davis, we will use our reasonable best efforts to effect the registration under applicable federal and state securities laws of any shares of our common stock that it retains.

In June 2022, the registration statement on Form S-1 we filed with respect to

the shares of our common stock held by Ziff Davis became effective, and Ziff Davis has informed us that it reduced its position in our common stock from 19.9% to approximately 5% over the course of 2022.

We are unable to predict with certainty whether or when Ziff Davis will distribute to holders of Ziff Davis debt and/or Ziff Davis stockholders, or sell, a substantial number of their remaining shares of our common stock following the distribution.

Sales by Ziff Davis or others of a substantial number of shares after the distribution, or a perception that such sales could occur, could significantly reduce the market price of our common stock.

Immediately following the distribution, we filed a registration statement on Form S-8 registering under the Securities Act the shares of our common stock reserved for issuance under our 2021 Equity Incentive Plan.

If equity securities granted under our 2021 Equity Incentive Plan are sold or it is perceived that they will be sold in the public market, the trading price of our common stock could decline substantially.

These sales also could impede our ability to raise future capital.

Certain provisions in our amended and restated certificate of incorporation and amended and restated bylaws, and of Delaware law, may prevent or delay an acquisition of Consensus, which could decrease the trading price of our common stock.

Our amended and restated certificate of incorporation and amended and restated bylaws contain, and Delaware law contains, provisions that are intended to deter coercive takeover practices and inadequate takeover bids and to encourage prospective acquirers to negotiate with our board of directors rather than to attempt a hostile takeover.

These provisions will, among other things:

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The trading market for Consensus’ common stock depends in part on the research and reports that securities or industry analysts publish about us or our business.

We currently have six research analysts covering Consensus’ common stock.

We currently have multiple research analysts covering Consensus’ common stock.

If one or more of the analysts downgrades our stock or publishes misleading or unfavorable research about our business, our stock price would likely decline.

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In addition, the IRS private letter ruling does not address all of the issues that are relevant to determining whether the distribution, together with certain related transactions, qualifies as a transaction that is generally tax-free for U.S.

federal income tax purposes, and an opinion of outside counsel or other external

tax advisor represents the judgment of such counsel or advisor which is not binding on the IRS or any court.

federal income tax purposes, and an opinion of outside counsel or other external tax advisor represents the judgment of such counsel or advisor which is not binding on the IRS or any court.

Accordingly, notwithstanding receipt by of the IRS private letter ruling and the tax opinions referred to above, there can be no assurance that the IRS will not assert that the distribution and/or certain related transactions do not qualify for tax-free treatment for U.S.

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jurisdictions that do not legally provide for tax-free separations, which may be material.

We may not be able to engage in desirable strategic or capital-raising transactions following the separation.

To preserve the tax-free treatment of the separation and the distribution for U.S.

federal income tax purposes, for the three-year period following the separation, we are prohibited under the tax matters agreement, except in specific circumstances, from:

(i) entering into any transaction pursuant to which all or a portion of the shares of Consensus common stock would be acquired, whether by merger or otherwise, (ii) issuing equity securities beyond certain thresholds, (iii) repurchasing shares of our common stock other than in certain open-market transactions, (iv) ceasing to actively conduct certain of our businesses or (v) taking or failing to take any other action that would prevent the distribution and certain related transactions from qualifying as a transaction that is generally tax-free for U.S.

federal income tax purposes under Sections 355 and 368(a)(1)(D) of the Code.

These restrictions may limit for a period of time our ability to pursue certain strategic transactions, equity issuances or repurchases or other transactions that we may believe to be in the best interests of our stockholders or that might increase the value of our business.

We have a limited history of operating as an independent company and have incurred and expect to continue to incur increased administrative and other costs following the separation by virtue of our status as an independent public company.

Our historical financial information for periods prior to the separation included in this Annual Report on Form 10-K is derived from the consolidated financial statements and accounting records of J2 Cloud Services, LLC (now Consensus Cloud Solutions, LLC) (“Historical Cloud Services”), previously a wholly owned subsidiary of J2 Global, Inc.

(now Ziff Davis).

As a result, the historical financial information for periods prior to the separation included in this Annual Report on Form 10-K does not necessarily reflect the financial position, results of operations or cash flows of Consensus following the separation or what Consensus’ financial position, results of operations and cash flows would have been had Consensus been a separate, standalone business during such periods.

Furthermore, the Historical Cloud Services financial information does not necessarily reflect the financial condition, results of operations or cash flows that we would have achieved as a separate, publicly traded company during the periods presented or those that we will achieve in the future primarily as a result of the following factors, among others:

• Prior to the separation, while our business operated on a relatively standalone basis, Ziff Davis or one of its affiliates performed various corporate functions for us such as legal, treasury, accounting, internal auditing, human resources and corporate affairs, and also provided our IT and other corporate infrastructure.

Our historical financial results for periods prior to the separation reflect allocations of corporate expenses from Ziff Davis for such functions were likely less than the expenses we would have incurred had we operated as a separate publicly

traded company.

Following the separation, our costs related to such functions previously performed by Ziff Davis have increased.

• To some extent historically, we shared certain economies of scope and scale with Ziff Davis.

Although we have entered into certain agreements (including a transition services agreement) with Ziff Davis in connection with the separation, these arrangements may not fully capture the benefits that we enjoyed as a result of being with a subsidiary of Ziff Davis and could result in us paying higher charges than in the past for these services.

• While Historical Cloud Services has engaged in some debt financing transactions specifically for its business, a substantial portion of its working capital requirements and capital for our general corporate purposes, including acquisitions and capital expenditures, were historically satisfied as part of the corporate-wide cash management policies of Ziff Davis.

In connection with the separation, we have entered into certain financing arrangements.

We may also need to obtain additional financing from banks, through public offerings or private placements of debt or equity securities, strategic relationships or other arrangements.

• Following the separation, the cost of capital for our business may be higher than Ziff Davis’s cost of capital prior to the separation.

• Other significant changes may occur in our cost structure, management, financing and business operations as a result of operating as a company separate from Ziff Davis.

Our debt obligations could adversely affect our business and our ability to meet our obligations and pay dividends.

As of December 31, 2023, Consensus has total outstanding indebtedness of approximately $742 million.

As of December 31, 2024, Consensus has total outstanding indebtedness of approximately $598 million, of which $249 million will mature on October 15, 2026 and the remainder with mature on October 15, 2028.

We may also incur additional indebtedness in the future.

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• increasing our cost of borrowing;

• limiting our ability to borrow additional funds as needed or take advantage of business opportunities as they arise, pay cash dividends or repurchase our common stock.

• limiting our ability to borrow additional funds as needed, refinance our debt or take advantage of business opportunities as they arise, pay cash dividends or repurchase our common stock.

In addition, the indentures governing our indebtedness contain, and the agreements governing any future indebtedness may contain, restrictive covenants that may limit our ability to engage in activities that may be in our long-term best interest.

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These restrictions will also not prevent us from incurring obligations that do not constitute “indebtedness.” If new indebtedness is added to our current debt levels, the related risks that we now face could intensify.

Our ability to incur additional indebtedness and/or refinance our existing indebtedness will depend on the debt and/or capital markets and our financial condition at the relevant time.

We may not be able to incur additional debt or refinance our existing debt on desirable terms or at all.

We may not be able to generate sufficient cash to service all of our indebtedness and may be forced to take other actions to satisfy our obligations under our indebtedness, which may not be successful.

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In addition, any event of default or declaration of acceleration under one debt instrument could result in an event of default under one or more of our other debt instruments.

We or Ziff Davis may fail to perform under transaction agreements that were executed as part of the separation.

We and Ziff Davis continue to have some obligations under transaction agreements that were executed as part of the separation.

In connection with the separation, we entered into several agreements with Ziff Davis, including among others, a separation agreement, a tax matters agreement, an employee matters agreement, an intellectual property license agreement and a stockholder and registration rights agreement with respect to Ziff Davis’ continuing ownership of Consensus common stock.

These agreements determine the allocation of named assets and liabilities between the companies following the separation and include any necessary indemnifications related to liabilities and obligations.

We rely on Ziff Davis to satisfy its performance and payment obligations under these agreements.

If Ziff Davis is unable to satisfy its obligations under these agreements, including its obligations with respect to the provision of transition services, we could incur operational difficulties or losses that could have a material and adverse effect on our business, financial condition and results of operations.

Potential indemnification liabilities to Ziff Davis pursuant to the separation agreement could materially and adversely affect our business, financial condition, results of operations and cash flows.

The separation agreement provide for, among other things, indemnification obligations generally designed to make us financially responsible for (i) liabilities primarily associated with the Consensus business;

(ii) our failure to pay, perform or otherwise promptly discharge any such liabilities or contracts, in accordance with their respective terms, whether prior to, at or after the distribution;

(iii) any guarantee, indemnification obligation, surety bond or other credit support agreement, arrangement, commitment or understanding by Ziff Davis for our benefit, unless related to liabilities primarily associated with the Ziff Davis business;

(iv) any breach by us of the separation agreement or any of the ancillary agreements or any action by us in contravention of our amended and restated certificate of incorporation or amended and restated bylaws;

and (v) any untrue statement or alleged untrue statement of a material fact or omission or alleged omission to state a material fact required to be stated therein or necessary to make the statements therein not misleading, with respect to all information contained in the registration statement of which this Form 10-K forms a part (as amended or supplemented) or any other disclosure document that describes the separation or the distribution or Consensus and its subsidiaries or primarily relates to the transactions contemplated by the separation agreement, subject to certain exceptions.

If we are required to indemnify Ziff Davis under the circumstances set forth in the separation agreement, we may be subject to substantial liabilities.

In connection with the separation, Ziff Davis is required to indemnify us for certain liabilities.

However, there can be no assurance that the indemnity will be sufficient to insure us against the full amount of such liabilities, or that Ziff Davis’s ability to satisfy its indemnification obligation will not be impaired in the future.

Additionally, third parties could also seek to hold us responsible for any of the liabilities that Ziff Davis has agreed to retain.

In addition, Ziff Davis’s insurers may attempt

to deny us coverage for liabilities associated with certain occurrences of indemnified liabilities prior to the separation.

Moreover, even if we ultimately succeed in recovering from Ziff Davis or such insurance providers any amounts for which we are held liable, we may be temporarily required to bear these losses.

Each of these risks could negatively affect our business, financial position, results of operations and cash flows.

We are subject to continuing contingent liabilities following the separation.

Following the separation, there are several significant areas where the liabilities of Ziff Davis may become our obligations.

For example, under the Code and the related rules and regulations, each corporation that was a member of the Ziff Davis consolidated U.S.

federal income tax return group during a taxable period or portion of a taxable period ending on or before the effective date of the distribution is severally liable for the U.S.

federal income tax liability of the Ziff Davis consolidated U.S.

federal income tax return group for that taxable period.

Consequently, if Ziff Davis is unable to pay the consolidated U.S.

federal income tax liability for a pre-separation period, we could be required to pay the amount of such tax, which could be substantial and in excess of the amount allocated to us under the tax matters agreement.

Other provisions of federal law establish similar liability for other matters, including laws governing tax-qualified pension plans, as well as other contingent liabilities.

While the term of many of the obligations under these agreements has passed, some obligations still remain.

For example, we continue to have indemnification obligations to Ziff Davis for matters including liabilities primarily associated with the Consensus business and we continue to be severally liable for certain Ziff Davis tax obligations.

Ziff Davis is also required to indemnify us for certain liabilities.

If Ziff Davis were to make an indemnification claim, or if Ziff Davis is unable to pay the taxes for which we may be severally liable, we could incur significant liabilities.

Potential liabilities may arise due to fraudulent transfer considerations, which would adversely affect our financial condition and results of operations.

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Generally, however, an entity would be considered insolvent if the fair value of its assets was less than the amount of its liabilities, or if it incurred debt beyond its ability to repay the debt as it matures.

Certain members of management, directors and shareholders hold stock in both Ziff Davis and Consensus, and as a result may face actual or potential conflicts of interest.

Certain members of management and directors own both Ziff Davis common stock and Consensus common stock.

This ownership overlap could create, or appear to create, potential conflicts of interest when our management and directors face decisions that could have different implications for us and Ziff Davis.

For example, potential conflicts of interest could arise in connection with the resolution of any dispute between Ziff Davis and us regarding the terms of the agreements governing the distribution and our relationship with Ziff Davis thereafter.

Potential conflicts of interest may also arise out of any commercial arrangements that we or Ziff Davis may enter into in the future.

As an independent, publicly traded company, we may not enjoy the same benefits that were available to us as a business unit of Ziff Davis.

It may be more costly for us to separately obtain or perform the various corporate functions that Ziff Davis performed for us prior to the separation, such as legal, treasury, accounting, auditing, human resources, investor relations, public affairs, finance and cash management services.

Historically, our business was operated as one of Ziff Davis’s business units, and Ziff Davis performed certain of the corporate functions for our operations.

Following the distribution, Ziff Davis provided support to us with respect to certain of

these functions on a transitional basis.

We have replicated, and must continue to replicate, certain systems, infrastructure and personnel to which we no longer have access and have incurred, and expect to continue to incur, capital and other costs associated with developing and implementing our own support functions in these areas.

Such costs could be material.

As an independent, publicly traded company, we may become more susceptible to market fluctuations and other adverse events than we would have been were we still a part of Ziff Davis.

As an independent, publicly traded company, we may become more susceptible to market fluctuations and other adverse events, as compared to when we were still a part of Ziff Davis.

As part of Ziff Davis, we were able to enjoy certain benefits from Ziff Davis’s operating diversity and available capital for investments and other uses.

1 unchanged sentence

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What changed 10-K

Item 1A. Risk Factors