What changed in this filing

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Item 1A. Risk Factors

2023-03-01 compared with 2022-03-10 · 51 added, 25 removed, 140 unchanged (35% of the section changed)

8 unchanged sentences

We have implemented certain systems and processes to thwart hackers and protect our data and systems;

however, these systems and processes may not be effective and, similar to many other global multinational companies, we experience cyber-threats, cyber-attacks and other attempts to breach the security of our systems.

however, these systems and processes may not be effective, particularly given the increasingly sophisticated tools and methods used by hackers, organized cyber criminals, and cyber terrorists, and, similar to many other global multinational companies, we experience cyber-threats, cyber-attacks and other attempts to breach the security of our systems.

Any fraudulent, malicious or accidental breach of data security could result in unintentional disclosure of, or unauthorized access to, customer, vendor, employee or other confidential or sensitive data or information, which could potentially result in additional costs to our company to enhance security or to respond to occurrences, lost sales, violations of privacy or other laws, notifications to individuals, penalties or litigation.

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We do not have control over the operations of the facilities of the third party cloud computing service that we use.

This, coupled with the fact that we cannot easily switch our cloud computing operations to another cloud provider, means that any disruption of or interference with our use of our current third party cloud computing service could disrupt our operations and our business could be adversely impacted.

This, coupled with the fact that we cannot easily switch our computing operations to another provider, means that any disruption of or interference with our use of our current third party cloud computing service could disrupt our operations and our business could be adversely impacted.

If our products and services do not maintain and/or achieve broad market acceptance, or if we are unable to keep pace with or adapt to rapidly changing technology, evolving industry standards, macroeconomic market conditions and changing regulatory requirements, our revenues could be adversely affected.

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Data security and data protection laws and regulations are continuously evolving and there are currently a number of legal challenges to the validity of EU mechanisms for adequate data transfers such as the Privacy Shield Framework and the Standard Contractual Clauses.

Although we have implemented policies and procedures that are designed to ensure compliance with applicable laws, rules and regulations, if our privacy or data security measures fail to comply with applicable current or future laws and regulations, including, without limitation, the EU ePrivacy Regulation and the California Consumer Privacy Act, we will likely be required to modify our data collection or processing practices and policies in an effort to comply with such laws and regulations, and we could be subject to increased costs, fines, litigation, regulatory investigations, and enforcement notices requiring us to change the way we use personal data or our marketing practices or other liabilities such as compensation claims by individuals affected by a personal data breach, as well as negative publicity and a potential loss of business.

Although we have implemented policies and procedures that are designed to ensure compliance with applicable laws, rules and regulations, if our privacy or data security measures fail to comply with applicable current or future laws and regulations, including, without limitation, the EU ePrivacy Regulation, the California Consumer Privacy Act, and the California Privacy Rights Act, we will likely be required to modify our data collection or processing practices and policies in an effort to comply with such laws and regulations, and we could be subject to increased costs, fines, litigation, regulatory investigations, and enforcement notices requiring us to change the way we use personal data or our marketing practices or other liabilities such as compensation claims by individuals affected by a personal data breach, as well as negative publicity and a potential loss of business.

Our business continuity plans may not be effective against events that may adversely impact our business.

We have established operational policies and procedures that manage the risks associated with business continuity and recovery from potential disruptions to our business.

These policies and procedures are designed to increase the likelihood

that we are prepared to continue operations during times of unexpected disruption and we have taken steps to minimize risks that could lead to disruptions in our operations and to avoid our customers being harmed in the event of a significant disruption in our operations.

These policies and procedures are designed to increase the likelihood that we are prepared to continue operations during times of unexpected disruption, and we have taken steps to minimize risks that could lead to disruptions in our operations and to avoid our customers being harmed in the event of a significant disruption in our operations.

However, there is no guarantee that these measures will be effective in minimizing any disruption from unexpected events that could result from a variety of causes, including human error, natural disasters (such as hurricanes and floods), infrastructure or network failures (including failures at third-party data centers, by third party cloud-computing providers, or of aging technology assets), and a disruption to our business that we are not capable of managing could adversely affect us.

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Public sources of free or relatively inexpensive information may reduce demand for our products and services.

Competition from such free or lower cost sources may also require us to reduce the price of some of our products and services (which may result in lower revenues) or make additional capital investments (which might result in lower profit margins).

Competition from such free or lower cost sources may also require us to reduce the price of some of our products

and services (which may result in lower revenues) or make additional capital investments (which might result in lower profit margins).

Demand could also be reduced as a result of cost-cutting, reduced spending or reduced activity by customers.

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We generate a significant percentage of our revenues from recurring subscription-based arrangements and highly predictable re-occurring transactional ("re-occurring") arrangements.

If we are unable to maintain a high annual revenue renewal rate, our results of operations could be adversely affected.

For the twelve months ended December 31, 2021, approximately 79.1% of our revenues were subscription-based and re-occurring based.

If we are unable to maintain a high annual renewal rate, our results of operations could be adversely affected.

For the year ended December 31, 2022, approximately 78% of our revenues were subscription-based and re-occurring based.

Because most of the revenues we report in each quarter are the result of subscription and re-occurring agreements entered into or renewed in previous quarters, with subscription renewals historically concentrated in the first quarter, a decline in subscriptions in any one quarter may not affect our results in that quarter, but could reduce revenues in future quarters.

Our operating results depend on our ability to achieve and sustain high renewal rates on our existing subscription and re-occurring arrangements and to obtain new subscriptions and re-occurring contracts with new and existing customers at competitive prices and other commercially acceptable terms.

Uncertain global economic conditions, including inflationary pressures and rising interest rates, have had and may continue to have an adverse impact on our business, including on our revenues from re-occurring revenues arrangements.

Failure to meet one or more of these subscription and re-occurring objectives could have a material adverse effect on our business, financial condition, and operating results.

1 unchanged sentence

Our ability to attract and retain customers is affected by external perceptions of our brand and reputation.

Failure to protect the reputation of our brands may adversely impact our credibility as a trusted source of content and may have a negative impact on our business.

Failure to protect the reputation of our brands may adversely impact our credibility as a trusted source of content and may have a negative

impact on our business.

In addition, in certain jurisdictions we engage sales agents in connection with the sale of certain of our products and services.

4 unchanged sentences

• political instability;

• international hostilities, military actions, terrorist or cyber-terrorist activities, natural disasters, pandemics (including a prolonged and delayed recovery from COVID-19), and infrastructure disruptions;

• international hostilities (including the ongoing war between Russia and Ukraine and related sanctions and negative economic impacts), military actions, terrorist or cyber-terrorist activities, natural disasters, pandemics (including a prolonged and delayed recovery from COVID-19), and infrastructure disruptions;

• differing economic cycles and adverse economic conditions;

• unexpected changes in regulatory environments and government interference in the economy;

• unexpected changes in regulatory environments and government interference in the economy and the possibility that the U.S.

could default on its debt obligations;

• increasing inflationary pressures and rising interests rates;

• varying tax regimes, including with respect to the imposition of withholding taxes on remittances and other payments by our partnerships or subsidiaries and the possibility that a U.S.

13 unchanged sentences

If we are not able to manage the risks related to our international operations, our business, financial condition and results of operations may be materially affected.

The international scope of our business operations subjects us to multiple overlapping tax regimes that can make it difficult to determine what our obligations are in particular situations.

In addition, the international scope of our business operations subjects us to multiple overlapping tax regimes that can make it difficult to determine what our obligations are in particular situations.

For example, we have been advised that we should be able to deliver the Merger Shares, consistent with our obligations under the Sponsor Agreement, to the recipients thereof without withholding for U.K.

employment and related taxes.

However, it is possible that Her Majesty’s Revenue and Customs (“HMRC”) could dispute our position and proceed against us for the amount of such taxes, which could be significant and, if sustained, could adversely affect our cash flows and financial position.

However, it is possible that His Majesty’s Revenue and Customs (“HMRC”) could dispute our position and proceed against us for the amount of such taxes, which could be significant and, if sustained, could adversely affect our cash flows and financial position.

Although we believe we would ultimately prevail in any such a proceeding, there can be no assurance that we would not be required to pay a significant amount in settlement of any such a claim brought by HMRC.

3 unchanged sentences

• events of default if we fail to comply with the financial and other covenants contained in the agreements governing our debt instruments, which could result in all of our debt becoming immediately due and payable or require us to negotiate an amendment to financial or other covenants that could cause us to incur additional fees and expenses;

• sensitivity to interest rate increases on our variable rate outstanding indebtedness, including uncertainty relating to the likely phasing out of LIBOR by the end of 2021, which could result in increased interest under our credit facilities which could cause our debt service obligations to increase significantly;

• sensitivity to interest rate increases on our variable rate outstanding indebtedness, which could result in increased interest under our credit facilities which could cause our debt service obligations to increase significantly;

• reducing the availability of our cash flow to fund working capital, capital expenditures, acquisitions and other general corporate purposes, and limiting our ability to obtain additional financing for these purposes;

7 unchanged sentences

We may incur substantial additional indebtedness, including secured indebtedness, for many reasons, including to fund acquisitions.

Such additional indebtedness may be subject to higher borrowing costs as a result of rising interest rates.

If we add additional debt or other liabilities, the related risks that we face could intensify.

4 unchanged sentences

The volatility introduced by changes in fair value on earnings may have an adverse effect on the market price of our ordinary shares.

We have identified material weaknesses in our internal control over financial reporting as of December 31, 2021, and if we are not able to remediate the material weaknesses, or if we identify additional material weaknesses in the future or otherwise fail to design and maintain effective internal control over financial reporting, we may be unable to accurately report our results of operations, meet our reporting obligations or prevent misstatements due to fraud or error.

We identified certain control deficiencies in the design of our internal control over financial reporting that constituted material weaknesses as of December 31, 2021.

A material weakness is a deficiency, or 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.

The material weaknesses related to:

(1) the lack of an effectively designed control over the communication of modifications to pre-existing compensation agreements in an acquisition transaction between the legal function and the accounting function to ensure the accounting impact of the modifications could be evaluated, and (2) the lack of an effectively designed control with a sufficient level of precision to allow for an appropriate review of the tax balances associated with the opening balance sheet of acquired entities.

The material weakness related to the communication of modifications to pre-existing compensation agreements in an acquisition transaction resulted in the restatement of the Company’s consolidated financial statements for the year ended December 31, 2020, the quarter ended December 31, 2020 and the first, second and third quarters of 2021.

The material weakness related to the review of the tax balances associated with the opening balance sheet of acquired entities resulted in immaterial adjustments of the Company’s consolidated financial statements for the year ended December 31, 2020 and each of the quarters of 2020 and the first, second and third quarters of 2021.

If we fail to design and maintain effective internal control over financial reporting, there could be material misstatements in our consolidated financial statements that we may not be able to prevent or detect on a timely basis and fail to meet our reporting obligations, which would likely cause investors to lose confidence in our reported financial information.

This could limit our access to capital markets, adversely affect our results of operations and lead to a decline in the trading price of the ordinary shares.

Additionally, ineffective internal control over financial reporting could expose us to an increased risk of fraud or misappropriation of assets and subject us to potential delisting from the stock exchange on which we list or to other regulatory investigations and civil or criminal sanctions.

We have incurred impairment charges for our goodwill and may incur further impairment charges for our goodwill and other intangible assets, which would negatively impact our operating results.

In connection with the preparation of our financial statements for the quarter ended September 30, 2022, we performed an interim quantitative goodwill impairment assessment over our reporting units due to possible impairment indicators including worsening market considerations and macroeconomic conditions, such as increasing inflationary pressures and rising interest rates, and sustained declines in the Company’s share price during the period.

As a result of the assessment, we recorded a goodwill impairment charge as of September 30, 2022 of $4,407.9 related to our ProQuest reporting unit, our former IP Management reporting unit and our former Patent reporting unit.

The impairment charge recorded for the ProQuest reporting unit and the former IP Management reporting unit represented a total write-off of the goodwill associated with these respective reporting units.

We review goodwill for impairment at least annually in the fourth quarter of the year or more frequently if indicators of impairment arise, and should market conditions or macroeconomic conditions continue to deteriorate, including a rise in inflationary pressures and interest rates, or a decline in our results of operations, the result of such review may indicate a decline in the fair value of goodwill requiring additional impairment charges for the former Patent reporting unit or additional reporting units.

In the event we are required to record an additional non-cash impairment charge to our goodwill, other intangibles, and/or long-lived assets, such a non-cash charge could have a material adverse effect on our consolidated statements of operations and balance sheets in the reporting period in which we record the charge.

For additional information, see Part I, Item 7, “Management’s Discussion and Analysis of Financial Condition and Results of Operations-Critical Accounting Policies, Estimates and Assumptions-Goodwill and Indefinite-Lived Intangible assets.”

Our Board has adopted a Tax Benefits Preservation Plan, which may not protect the future availability of the Company’s tax assets in all circumstances and which could delay or discourage takeover attempts that some shareholders may consider favorable.

As of December 31, 2022, we had U.S.

federal net operating losses (“NOLs”) and interest expense carryforwards totaling approximately $1,636.9, and comparable U.S.

state carryforwards of approximately $495.0.

Pursuant to Section 382 of the U.S.

Internal Revenue Code of 1986, as amended, and the Treasury Regulations issued thereunder, a corporation that undergoes an “ownership change” is subject to limitations on its use of its existing NOL and interest expense carryforwards and certain other tax attributes (collectively, “Tax Assets”), which can be utilized in certain circumstances to offset future U.S.

tax liabilities.

A corporation generally undergoes an “ownership change” for purposes of Section 382 if one or more “5% shareholders” (as determined under Section 382) increase their ownership of the corporation’s stock by more than 50 percentage points over a rolling three-year period.

In the event of such an “ownership change,” Section 382 imposes an annual limitation on the amount of post-change taxable income a corporation may offset with pre-change Tax Assets.

Similar rules apply in various U.S.

state and local jurisdictions.

A small portion of our Tax Assets are currently subject to limitations under Section 382.

However, with respect to the substantial majority of our Tax Assets, while we have in recent years experienced significant changes in the ownership of our stock, we do not believe we have undergone an “ownership change” that would limit our ability to use these Tax Assets.

However, there can be no assurance that the Internal Revenue Service will not challenge this position.

On December 22, 2022, the Board of Directors adopted the Tax Benefits Preservation Plan (the “Tax Benefits Preservation Plan”) to help protect the future availability of the Company’s Tax Assets.

The Tax Benefits Preservation Plan is intended to reduce the likelihood of such an “ownership change” at the Company by deterring any person or group that would be treated as a 5% shareholder from acquiring beneficial ownership, as determined for purposes of the Tax Benefits Preservation Plan, of either (i) 4.9% or more of the outstanding Ordinary Shares of the Company or (ii) 4.9% or more (by value) of the Company’s capital stock.

It also deters existing shareholders who currently meet or exceed this ownership threshold from acquiring additional Company stock.

See “Note 16 - Income Taxes” of our financial statements included in Part II, Item 8, to this Annual Report on Form 10-K for additional information on the terms and operation of the Tax Benefits Preservation Plan.

However, there can be no assurance that the Tax Benefits Preservation Plan will prevent an “ownership change” from occurring for purposes of Section 382, and events outside of our control and which may not be subject to the Tax Benefits Preservation Plan, such as sales of our stock by certain existing shareholders, may result in such an “ownership change” in the future.

While we currently have a full valuation allowance against our NOLs and other historic Tax Assets for financial accounting purposes, if we have undergone or in the future undergo an ownership change that applies to our Tax Assets, our ability to use these Tax Assets could be substantially limited after the ownership change, and this limit could have a substantial adverse effect on our cash flows and financial position.

While the Tax Benefits Preservation Plan is not principally intended to prevent a takeover, it may have an anti-takeover effect because an “acquiring person” thereunder may be diluted upon the occurrence of a triggering event.

Accordingly, the Tax Benefits Preservation Plan may complicate or discourage a merger, tender offer, accumulations of substantial blocks of our stock, or assumption of control by a substantial holder of our securities.

The Tax Benefits Preservation Plan should not interfere with any merger or other business combination approved by the Board of Directors.

Because the Board of Directors may consent to certain transactions, the Tax Benefits Preservation Plan gives our Board of Directors significant discretion to act in the best interests of shareholders.

CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING STATEMENTS

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• our ability to compete in the highly competitive industry in which we operate, and potential adverse effects of this competition;

• our ability to maintain high annual revenue renewal rates;

• our ability to maintain high annual renewal rates;

• the strength of our brand and reputation;

12 unchanged sentences

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 1A. Risk Factors