What changed in this filing

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Item 1A. Risk Factors

2021-05-12 compared with 2020-11-06 · 487 added, 460 removed, 452 unchanged (68% of the section changed)

Risk Factors.

Risk Factor Summary

We are providing the following summary of the risk factors contained in this Quarterly Report on Form 10-Q to enhance the readability and accessibility of our risk factor disclosures.

We encourage you to carefully review the full risk factors contained in this Quarterly Report on Form 10-Q in their entirety for additional information regarding the material factors that make an investment in our securities speculative or risky.

These risks and uncertainties include, but are not limited to, the following:

We have a history of operating losses, and we may not be able to generate sufficient revenue to achieve and sustain profitability;

We have experienced strong growth in recent periods, and our recent growth rates may not be indicative of our future growth;

We face intense competition and may lack sufficient financial or other resources to maintain or improve our competitive position, which may harm our ability to add new customers, retain existing customers, and grow our business;

The COVID-19 pandemic and the associated economic uncertainty and our response may continue to impact us, our customers, and our partners;

Our future revenue and operating results will be harmed if we are unable to acquire new customers or the growth in ecommerce during the COVID-19 pandemic fails to continue after the pandemic ends.

Our success depends in part on our partner-centric strategy;

We have a limited operating history, which makes it difficult to forecast our future results of operations;

Failure to effectively develop and expand our marketing and sales capabilities could harm our ability to increase our customer base and achieve broader market acceptance of our platform;

To the extent our security measures are actually or believed to have been compromised, our platform may be perceived as not being secure.

This may result in customers curtailing or ceasing their use of our platform, our reputation being harmed, our incurring significant liabilities, and adverse effects on our results of operations and growth prospects;

Increases in cost, interruptions in service, latency, or poor service from our third-party data center providers could impair the delivery of our platform;

If there are interruptions or performance problems associated with our technology or infrastructure, our customers, partners and prospects may experience service outages, and delays in using our platform;

We may need to reduce or change our pricing model to remain competitive;

Our sales cycle with mid-market and large enterprise customers can be long and unpredictable, and our sales efforts require considerable time and expense;

If we fail to maintain or grow our brand recognition, our ability to expand our customer base will be impaired and our financial condition may suffer;

If we fail to offer high quality support, our business and reputation could suffer;

If the security of this information is compromised or is otherwise accessed without authorization, our reputation may be harmed and we may be exposed to liability and loss of business;

Evolving global laws, regulations and standards, privacy regulations, cross-border data transfer restrictions, and data localization requirements may limit the use and adoption of our services, expose us to liability, or otherwise adversely affect our business;

Mobile devices are increasingly being used to conduct commerce.

If our platform does not operate as effectively when accessed through these devices, our customers and their shoppers may not be satisfied with our services, which could harm our business;

Activities of customers, their shoppers, and our partners could damage our brand, subject us to liability and harm our business and financial results;

We could incur substantial costs in protecting or defending our proprietary rights.

Failure to adequately protect our rights could impair our competitive position.

We could lose valuable assets, experience reduced revenue, and incur costly litigation;

We have been, and may in the future be, subject to legal proceedings and litigation, including intellectual property disputes.

Such disputes are costly and may subject us to significant liability and increased costs of doing business.

Our business may suffer if it is alleged or determined that our technology infringes the intellectual property rights of others;

Our inability to obtain third-party licenses for such software, or obtain them on favorable terms, or any errors or failures caused by such software could adversely affect our business, results of operations and financial condition;

Our use of open source software could subject us to possible litigation or cause us to subject our platform to unwanted open source license conditions that could negatively impact our sales;

If our platform fails to perform properly, and if we fail to develop enhancements to resolve performance issues, we could lose customers, become subject to performance or warranty claims, or incur significant costs;

Payment transactions on our ecommerce platform subject us to regulatory requirements, additional fees, and other risks that could be costly and difficult to comply with or that could harm our business;

We provide our ecommerce platform to businesses in highly-regulated industries, which subjects us to a number of challenges and risks;

Our ability to use our net operating losses to offset future taxable income may be subject to certain limitations;

Changes in tax laws or regulations that are applied adversely to us or our customers could increase the cost of our ecommerce platform and adversely impact our business.

We may be subject to tax liability for past sales or lose certain tax benefits that we enjoy in Ukraine, which could harm our business;

The market price of shares of our Series 1 common stock has been volatile, which could cause the value of your investment to decline;

Our failure to raise capital when needed could harm our business, operating results and financial condition.

Debt or equity issued to raise additional capital may reduce the value of our Series 1 common stock;

Insiders have substantial control over us, which may limit our stockholders’ ability to influence corporate matters and delay or prevent a third party from acquiring control over us;

If our operating and financial performance in any given period does not meet the guidance that we provide to the public or the expectations of investment analysts, the market price of our Series 1 common stock may decline;

The requirements of being a public company, including compliance with the reporting requirements of the Exchange Act, the requirements of the Sarbanes-Oxley Act and the requirements of Nasdaq, may strain our resources, increase our costs and distract management, and we may be unable to comply with these requirements in a timely or cost-effective manner;

If we are unable to implement and maintain effective internal control over financial reporting in the future, investors may lose confidence in the accuracy and completeness of our financial reports, and the market price of our common stock may decline;

Increases in interest rates may cause the market price of our common stock to decline;

Provisions in our organizational documents and certain rules imposed by regulatory authorities may delay or prevent our acquisition by a third party;

The provision of our amended and restated certificate of incorporation requiring exclusive venue in the Court of Chancery in the State of Delaware and the federal district courts of the United States for certain types of lawsuits may have the effect of discouraging lawsuits against our directors and officers;

Our estimates of market opportunity and forecasts of market growth may prove to be inaccurate.

Even if the market in which we compete achieves the forecasted growth, our business could fail to grow at similar rates, if at all;

We anticipate that our operations will continue to increase in complexity as we grow, which will create management challenges;

We depend on our senior management team and the loss of one or more key employees or an inability to attract and retain highly skilled employees could adversely affect our business;

If we are unable to maintain our corporate culture as we grow, we could lose the innovation, teamwork, passion and focus on execution that we believe contribute to our success, and our business may be harmed;

Unfavorable conditions in our industry or the global economy, or reductions in IT spending, could limit our ability to grow our business and negatively affect our results of operations;

Natural catastrophic events and man-made problems such as power disruptions, computer viruses, global pandemics, data security breaches and terrorism may disrupt our business;

Indemnity provisions in various agreements potentially expose us to substantial liability for intellectual property infringement, data protection, and other losses;

Our current operations are international in scope, and we plan further geographic expansion.

This will create a variety of operational challenges;

Our international operations may subject us to potential adverse tax consequences;

We are subject to governmental export and import controls that could impair our ability to compete in international markets and subject us to liability if we violate the controls;

We are exposed to fluctuations in currency exchange rates, which could negatively affect our operating results;

We are subject to anti-corruption, anti-bribery, anti-money laundering, and similar laws.

Non-compliance with such laws can subject us to criminal and/or civil liability and harm our business;

Changes in subjective assumptions, estimates and judgments by management related to complex accounting matters or changes in accounting principles generally accepted in the United States, could significantly affect our financial condition and results of operations;

We may not be able to secure sufficient additional financing on favorable terms, or at all, to meet our future capital needs

We may acquire or invest in companies, which may divert our management’s attention and result in additional dilution to our stockholders.

We may be unable to integrate acquired businesses and technologies successfully or achieve the expected benefits of such acquisitions.

The following section discusses material risks and uncertainties that could adversely affect our business and financial condition.

Investing in our Series 1 common stock involves substantial risks.

You should carefully consider the following risk factors, as well as all of the other information contained in this Quarterly Report on Form 10-Q, including our condensed consolidated financial statements and related notes.

You should carefully consider the following risk factors, as well as all of the other information contained in this Quarterly Report on Form 10-Q, including “Management’s Discussion and Analysis of the Financial Condition and Results of Operations” and the consolidated financial statements and related notes thereto included elsewhere in this Quarterly Report on Form 10-Q, before deciding to invest in our Series 1 common stock.

Additional risks and uncertainties that we are unaware of may also become important factors that adversely affect our business.

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In such case, the market price of our Series 1 common stock could decline, and you could lose all or part of your investment.

Risks related to our business and industry

Risks related to the growth and profitability of our business.

We have a history of operating losses, and we may not be able to generate sufficient revenue to achieve and sustain profitability.

We have not yet achieved profitability.

We incurred net losses of $42.6 million and $23.4 million for the year ended December 31, 2019 and the nine months ended September 30, 2020, respectively, as compared to $38.9 million and $32.3 million for the year ended December 31, 2018 and the nine months ended September 30, 2019, respectively.

As of September 30, 2020, we had an accumulated deficit of $299.2 million .

We incurred net losses of $37.6 million, $42.6 million and $38.9 million for the years ended December 31, 2020, 2019, and 2018, respectively.

As of December 31, 2020, we had an accumulated deficit of $313.4 million.

While we have experienced significant revenue growth over recent periods, we may not be able to sustain or increase our growth or achieve profitability in the future.

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You should not rely on our revenue for any prior periods as any indication of our future revenue or revenue growth.

Our future revenue and operating results will be harmed if we are unable to acquire new customers, retain existing customers, expand s ales to our existing customers, or develop new functionality for our platform that achieves market acceptance, or the increase in ecommerce during the COVID-19 pandemic fails to continue after the pandemic ends .

Our future revenue and operating results will be harmed if we are unable to acquire new customers, retain existing customers, expand sales to our existing customers, develop new functionality for our platform that achieves market acceptance, or the increase in ecommerce during the COVID-19 pandemic fails to continue after the pandemic ends.

To continue to grow our business, it is important that we continue to acquire new customers to purchase and use our platform.

Our success in adding new customers depends on numerous factors, including our ability to:

(1) offer a compelling ecommerce platform, (2) execute our sales and marketing strategy, (3) attract, effectively train and retain new sales, marketing, professional services, and support personnel in the markets we pursue, (4) develop or expand relationships with partners, payment providers, systems integrators, and resellers, (5) expand into new geographies and market segments, (6) efficiently onboard new customers on to our platform, and (7) provide additional paid services that complement the capabilities of our customers and their partners.

systems integrators, and resellers, (5) expand into new geographies and market segments, (6) efficiently onboard new customers on to our platform, and (7) provide additional paid services that complement the capabilities of our customers and their partners.

Our ability to increase revenue also depends in part on our ability to retain existing customers and to sell more functionality and adjacent services to our existing and new customers.

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The adverse effect on our financial results may be particularly acute because of the significant research, development, marketing, sales, and other expenses we will have incurred in connection with the new functionality and services.

As reported by the U.S.

Department of Commerce, U.S.

ecommerce grew more than 30% between the first and second quarters of 2020 as a result of changes in consumer behavior due to the COVID-19 pandemic.

We were a beneficiary of this trend but there are no assurances this trend will continue.

In response to the COVID-19 pandemic, governments have instituted lockdown, social distancing, and similar measures to slow infection rates.

These restrictions have prompted shifts from physical commerce to ecommerce, which has increased usage of our services.

After the COVID-19 pandemic has abated, our customers’ stores may experience decreases or decreased growth rates in transactions, which would negatively affect our business, financial condition, and operating results.

We may experience decreases or decreased growth rates in sales of new store subscriptions to customers, which would negatively affect our business, financial condition and operating results.

We face intense competition, especially from well-established companies offering solutions and related applications.

We may lack sufficient financial or other resources to maintain or improve our competitive position, which may harm our ability to add new customers, retain existing customers, and grow our business.

The market for ecommerce solutions is evolving and highly competitive.

We expect competition to increase in the future from established competitors and new market entrants.

With the introduction of new technologies and the entry of new companies into the market, we expect competition to persist and intensify in the future.

This could harm our ability to increase sales, maintain or increase renewals, and maintain our prices.

We face intense competition from other software companies that may offer related ecommerce platform software solutions and services.

Our competitors include larger companies that have acquired ecommerce platform solution providers in recent years.

We also compete with custom software internally developed within ecommerce businesses.

In addition, we face competition from niche companies that offer point products that attempt to address certain of the problems that our platform solves.

Merger and acquisition activity in the technology industry could increase the likelihood that we compete with other large technology companies.

Many of our existing competitors have, and our potential competitors could have, substantial competitive advantages such as greater name recognition, longer operating histories, larger sales and marketing budgets and resources, greater customer support resources, lower labor and development costs, larger and more mature intellectual property portfolios, and substantially greater financial, technical and other resources.

Some of our larger competitors also have substantially broader product lines and market focus and will therefore not be as susceptible to downturns in a particular market.

Conditions in our market could change rapidly and significantly as a result of

technological advancements, partnering by our competitors, or continuing market consolidation.

New start-up companies that innovate, and large companies that are making significant investments in research and development, may invent similar or superior products and technologies that compete with our platform.

In addition, some of our competitors may enter into new alliances with each other or may establish or strengthen cooperative relationship s with agency partners, technology and application providers in complementary categories, or other parties.

Furthermore, ecommerce on large marketplaces, such as Amazon, could increase as a percentage of all ecommerce activity, thereby reducing customer tr affic to individual merchant websites.

Any such consolidation, acquisition, alliance or cooperative relationship could lead to pricing pressure, a loss of market share, or a smaller addressable share of the market.

It could also result in a competitor with greater financial, technical, marketing, service, and other resources, all of which could harm our ability to compete.

Some of our larger competitors use broader product offerings to compete, including by selling at zero or negative margins, by bundling their product, or by closing access to their technology platforms.

Potential customers may prefer to purchase from their existing suppliers rather than a new supplier regardless of product performance or features.

Furthermore, potential customers may be more willing to incrementally add solutions to their existing infrastructure from competitors than to replace their existing infrastructure with our platform.

These competitive pressures in our market, or our failure to compete effectively, may result in price reductions, fewer orders, reduced revenue and gross margins, increased net losses, and loss of market share.

Any failure to meet and address these factors could harm our business, results of operations, and financial condition.

The COVID-19 pandemic could materially adversely affect our business, financial condition and results of operations.

The COVID-19 pandemic, the measures attempting to contain and mitigate the effects of the COVID-19 pandemic, including stay-at-home, business closure, and other restrictive orders, and the resulting changes in consumer behaviors, have disrupted our normal operations and impacted our employees, suppliers, partners, and customers.

We expect these disruptions and impacts to continue.

In response to the COVID-19 pandemic, we have taken a number of actions that have impacted and continue to impact our business, including transitioning employees across all our offices (including our corporate headquarters) to remote work-from-home arrangements and imposing travel and related restrictions.

While we believe these actions were reasonable and necessary as a result of the COVID-19 pandemic, they were disruptive to our business and could adversely impact our results of operations.

Given the continued spread of COVID-19 and the resultant personal, economic, and governmental reactions, we may have to take additional actions in the future that could harm our business, financial condition, and results of operations.

While we have a distributed workforce and our employees are accustomed to working remotely or working with other remote employees, our workforce has not historically been fully remote.

Prior to the COVID-19 pandemic, certain of our employees traveled frequently to establish and maintain relationships with one another and with our customers, partners, and investors.

We continue to monitor the situation and may adjust our current policies as more information and guidance become available.

Suspending travel and doing business in-person on a long-term basis could negatively impact our marketing efforts, our ability to enter into customer contracts in a timely manner, our international expansion efforts and our ability to recruit employees across the organization.

These changes could negatively impact our sales and marketing in particular, which could have longer-term effects on our sales pipeline, or create operational or other challenges as our workforce remains predominantly remote.

Any of these impacts could harm our business.

In addition, our management team has spent, and will likely continue to spend, significant time, attention, and resources monitoring the COVID-19 pandemic and associated global economic uncertainty and seeking to manage its effects on our business and workforce.

The degree to which COVID-19 will affect our business and results of operations will depend on future developments that are highly uncertain and cannot currently be predicted.

These developments include but are not limited to the duration, extent, and severity of the COVID-19 pandemic, actions taken to contain the COVID-19 pandemic, the impact of the COVID-19 pandemic and related restrictions on economic activity and domestic and international trade, and the extent of the impact of these and other factors on our employees, suppliers, partners, and customers.

The COVID-19 pandemic and related restrictions could limit our customers’ ability to continue to operate (to obtain inventory, generate sales, or make timely payments to us).

It could disrupt or delay the ability of employees to work because they become sick or are required to care for those who become sick, or for dependents for whom external care is not available.

It could cause delays or disruptions in services provided by key suppliers and vendors, make us, our partners and our service providers more vulnerable to security breaches, denial of service attacks or other hacking or phishing attacks, or cause other unpredictable effects.

The COVID-19 pandemic also has caused heightened uncertainty in the global economy.

If economic conditions further deteriorate, consumers may not have the financial means to make purchases from our customers and may delay or reduce discretionary purchases, negatively impacting our customers and our results of operations.

Uncertainty from the pandemic may cause prospective or existing customers to defer investment in ecommerce.

Our SMB customers may be more susceptible to general economic conditions than larger businesses, which may have greater liquidity and access to capital.

Uncertain and adverse economic conditions also may lead to increased refunds and chargebacks.

Since the impact of COVID-19 is ongoing, the effect of the COVID-19 pandemic and the related impact on the global economy may not be fully reflected in our results of operations until future periods.

Volatility in the

capital markets has been heightened during recent months and such volatility may continue, which may cause declines in the price of our Series 1 common stock.

To the extent there is a sustained general economic downturn and our software is perceived by customers and potential customers as costly, or too difficult to deploy or migrate to, our revenue may be disproportionately affected.

Our revenue may also be disproportionately affected by delays or reductions in general information technology spending.

Competitors, many of whom are larger and more established than we are, may respond to market conditions by lowering prices and attempting to lure away our customers.

In addition, the increased pace of consolidation in certain industries may result in reduced overall spending on our subscription offerings and related services.

We cannot predict the timing, strength, or duration of any economic slowdown, instability, or recovery, generally or within any particular industry.

If the economic conditions of the general economy or markets in which we operate worsen from present levels, our business, results of operations, and financial condition could be materially and adversely affected.

If we fail to adapt and respond effectively to rapidly changing technology, evolving industry standards, and changing customer needs or preferences, our platform may become less competitive.

The software industry is subject to rapid technological change, evolving industry standards and practices, and changing customer needs and preferences.

The success of our business will depend, in part, on our ability to adapt and respond effectively to these changes on a timely basis.

If we are unable to develop and sell new technology, features, and functionality for our platform that satisfy our customers and that keep pace with rapid technological and industry change, our revenue and operating results could be adversely affected.

If new technologies emerge that deliver competitive solutions at lower prices, more efficiently, more conveniently, or more securely, it could adversely impact our ability to compete.

Our platform must also integrate with a variety of network, hardware, mobile, and software platforms and technologies.

We need to continuously modify and enhance our platform to adapt to changes and innovation in these technologies.

If businesses widely adopt new ecommerce technologies, we would have to develop new functionality for our platform to work with those new technologies.

This development effort may require significant engineering, marketing and sales resources, all of which would affect our business and operating results.

Any failure of our platform to operate effectively with future technologies could reduce the demand for our platform.

If we are unable to respond to these changes in a cost-effective manner, our platform may become less marketable and less competitive or obsolete, and our operating results may be negatively affected.

Our success depends in part on our partner-centric strategy.

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Any failure of our platform to operate effectively with business applications could reduce the demand for our platform, resulting in customer dissatisfaction and harm to our business.

If we are unable

to respond to these changes or failures in a cost-effective manner, our platform may become less marketable, less competitive, or obsolete, and our results of operations may be negatively impacted.

If we are unable to respond to these changes or failures in a cost-effective manner, our platform may become less marketable, less competitive, or obsolete, and our results of operations may be negatively impacted.

We have strategic technology partnerships with third parties that pay us a revenue share on their gross sales to our joint customers and/or collaborate to co-sell and co-market BigCommerce to new customers.

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If our relationships with our strategic technology partners are disrupted, we may receive less revenue and incur costs to form other revenue-generating strategic technology partnerships.

If our strategic technology partners were to be acquired by a competitor or were to acquire a competitor, it could compromise these relationships.

If our strategic technology partners were to be acquired by a competitor or were to acquire a competitor, it could compromise these

relationships.

This could harm our relationship with our customers, our reputation and brand, and our business and results of operations.

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If our assumptions regarding these risks, uncertainties, or future revenue growth are incorrect, or if we do not address these risks successfully, our operating and financial results could differ materially from our expectations, and our business could suffer.

The estimates of market opportunity and forecasts of market growth included in this Quarterly Report on Form 10-Q and our other filings may prove to be inaccurate.

Even if the market in which we compete achieves the forecasted growth, our business could fail to grow at similar rates, if at all.

The market for ecommerce solutions is relatively new and will experience changes over time.

Ecommerce market estimates and growth forecasts are uncertain and based on assumptions and estimates that may be inaccurate.

Our addressable market depends on a number of factors, including businesses’ desire to differentiate themselves through ecommerce, partnership opportunities, changes in the competitive landscape, technological changes, data security or privacy concerns, customer budgetary constraints, changes in business practices, changes in the regulatory environment, and changes in economic conditions.

Our estimates and forecasts relating to the size and expected growth of our market may prove to be inaccurate and our ability to produce accurate estimates and forecasts may be impacted by the economic uncertainty associated with the COVID-19 pandemic.

Even if the market in which we compete meets the size estimates and growth rates we forecast, our business could fail to grow at similar rates, if at all.

If we fail to manage our growth effectively, we may be unable to execute our business plan, maintain high levels of service and customer satisfaction or adequately address competitive challenges.

We may continue to experience rapid growth and organizational change, which may continue to place significant demands on our management and our operational and financial resources.

We have also experienced growth in the number of customers, the

amount of transactions we process, and the amount of data that our hosting infrastructure supports.

Our success will depend i n part on our ability to manage this growth effectively.

We will require significant capital expenditures and valuable management resources to grow without undermining our culture of innovation, teamwork, and attention to customer success, which has been c entral to our growth so far.

If we fail to manage our anticipated growth and change in a manner that preserves our corporate culture, it could negatively affect our reputation and ability to retain and attract customers and employees.

We intend to expand our international operations in the future.

Our expansion will continue to place a significant strain on our managerial, administrative, financial, and other resources.

If we are unable to manage our growth successfully, our business and results of operations could suffer.

It is important that we maintain a high level of customer service and satisfaction as we expand our business.

As our customer base continues to grow, we will need to expand our account management, customer service, and other personnel.

Failure to manage growth could result in difficulty or delays in launching our platform, declines in quality or customer satisfaction, increases in costs, difficulties in introducing new features, or other operational difficulties.

Any of these could adversely impact our business performance and results of operations.

Failure to effectively develop and expand our marketing and sales capabilities could harm our ability to increase our customer base and achieve broader market acceptance of our platform.

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As we rely on third-party and public-cloud infrastructure, we will depend in part on third-party security measures to protect against unauthorized access, cyberattacks, and the mishandling of customer data.

A cybersecurity event could have significant costs, including regulatory enforcement actions, litigation, litigation indemnity obligations, remediation costs, network downtime, increases in insurance

premiums, and reputational damage.

Many companies that provide cloud-ba sed services have reported a significant increase in cyberattack activity since the beginning of the COVID-19 pandemic.

A cybersecurity event could have significant costs, including regulatory enforcement actions, litigation, litigation indemnity obligations, remediation costs, network downtime, increases in insurance premiums, and reputational damage.

Our cyber insurance may not protect against all of the costs, liabilities, and other adverse effects arising from a security breach or system failure.

Many companies that provide cloud-based services have reported a significant increase in cyberattack activity since the beginning of the COVID-19 pandemic.

We depend on third-party data hosting and transmission services.

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Even with current and planned disaster recovery arrangements, our business could be harmed.

If we experience damage or interruption, our insurance policies may not adequately compensate us for any losses that we may incur.

If we experience damage or interruption, our insurance policies may not adequately compensate us for or protect us against any losses, liabilities and costs that we may incur.

These factors in turn could further reduce our revenue, subject us to liability, cause us to issue credits, or cause customers to terminate their subscriptions, any of which could materially adversely affect our business.

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We have experienced and may, in the future, experience disruptions, data loss, outages, and other performance problems with our infrastructure.

These can be due to a variety of factors, including infrastructure changes, introductions of new functionality, human or software errors, capacity constraints, denial-of-service attacks, or other security-related incidents, any of which may be recurring.

These can be due to a variety of factors, including infrastructure changes, introductions of new functionality, human or software errors, capacity constraints, denial-of-service

attacks, or other security-related incidents, any of which may be recurring.

As we continue to add customers, expand geographically, and enhance our platform’s functionality, the additional scale may increase complexity and our average uptime for future periods may decrease.

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We may also be unable to address capacity constraints, upgrade our systems, and develop our technology and network architecture to accommodate actual and anticipated technology changes.

Any of the above circumstances or events may harm our reputation, cause customers to terminate their agreements with us, impair our ability to grow our customer base, subject us to financial liabilities under our SLAs, and otherwise harm our business, results of operations, and financial condition.

We anticipate that our operations will continue to increase in complexity as we grow, which will create management challenges.

Our business has experienced strong growth and is complex.

We expect this growth to continue and for our operations to become increasingly complex.

To manage this growth, we continue to make substantial investments to improve our operational, financial, and management controls as well as our reporting systems and procedures.

We may not be able to implement and scale improvements to our systems and processes in a timely or efficient manner or in a manner that does not negatively affect our operating results.

For example, we may not be able to effectively monitor certain extraordinary contract requirements or individually negotiated provisions as the number of transactions continues to grow.

Our systems and processes may not prevent or detect all errors, omissions, or fraud.

We may have difficulty managing improvements to our systems, processes and controls or in connection with third-party software.

This could impair our ability to provide our platform to our customers, causing us to lose customers, limiting our platform to less significant updates, or increasing our technical support costs.

If we are unable to manage this complexity, our business, operations, operating results and financial condition may suffer.

As our customer base continues to grow, we will need to expand our services and other personnel, and maintain and enhance our partnerships, to provide a high level of customer service.

Extended stay-at-home, business closure, and other restrictive orders may impact our ability to identify, hire, and train new personnel.

We also will need to manage our sales processes as our sales personnel and partner network continue to grow and become more complex, and as we continue to expand into new geographies and market segments.

If we do not effectively manage this increasing complexity, the quality of our platform and customer service could suffer, and we may not be able to adequately address competitive challenges.

These factors could impair our ability to attract and retain customers and expand our customers’ use of our platform.

We depend on our senior management team and the loss of one or more key employees or an inability to attract and retain highly skilled employees could adversely affect our business.

Our success depends largely upon the continued services of our executive officers.

We rely on our leadership team for research and development, marketing, sales, services, and general and administrative functions, and on mission-critical individual contributors.

From time to time, our executive management team may change from the hiring or departure of executives, which could disrupt our business.

We do not have employment agreements with our executive officers or other key personnel that require them to continue to work for us for any specified period;

therefore, they could terminate their employment with us at any time.

The loss of one or more of our executive officers or key employees (including any limitation on the performance of their duties or short term or long term absences as a result of COVID-19) could have a serious adverse effect on our business.

To execute our growth plan, we must attract and retain highly qualified personnel.

Competition for these personnel is intense, especially for experienced software engineers and senior sales executives.

If we are unable to attract such personnel in cities where we are located, we may need to hire in other locations, which may add to the complexity and costs of our business operations.

We expect to continue to experience, difficulty in hiring and retaining employees with appropriate qualifications.

Extended stay-at-home, business closure, and other restrictive orders may impact our ability to identify, hire, and train new personnel.

Many of the companies with which we compete for experienced personnel have greater resources than we have.

If we hire employees from competitors or other companies, their former employers may attempt to assert that these employees or BigCommerce have breached legal obligations, resulting in a diversion of our time and resources.

In addition, job candidates and existing employees often consider the value of the stock awards they receive in connection with their employment.

If the perceived value of our stock awards declines, it may adversely affect our ability to recruit and retain highly skilled employees.

If we fail to attract new personnel or fail to retain and motivate our current personnel, it could adversely affect our business and future growth prospects.

We believe a critical component to our success has been our corporate culture.

We have invested substantial time and resources in building our team.

As we grow and develop our infrastructure as a public company, our operations may become increasingly complex.

We may find it difficult to maintain these important aspects of our corporate culture.

If we are required to maintain work-from-home arrangements for a significant period of time, it may impact our ability to preserve our corporate culture.

Any failure to preserve our culture could negatively affect our future success, including our ability to retain and recruit personnel, and to effectively focus on and pursue our corporate objectives.

We may need to reduce or change our pricing model to remain competitive.

We price our subscriptions based on a combination of GMV order volume, and feature functionality.

We expect that we may need to change our pricing from time to time.

As new or existing competitors introduce products that compete with ours or reduce their prices, we may be unable to attract new customers or retain existing customers.

We also must determine the appropriate price to enable us to compete effectively internationally.

Mid-market and large enterprise customers may demand substantial price discounts as part of the negotiation of sales contracts.

As a result, we may be required or choose to reduce our prices or otherwise change our pricing model, which could adversely affect our business, operating results, and financial condition.

Our sales cycle with mid-market and large enterprise customers can be long and unpredictable, and our sales efforts require considerable time and expen se.

Any of the above circumstances or events may harm our reputation, cause customers to terminate their agreements with us, impair our ability to grow our customer base, subject us to financial liabilities under our service level agreements (“SLAs”), and otherwise harm our business, results of operations, and financial condition.

Our sales cycle with mid-market and large enterprise customers can be long and unpredictable, and our sales efforts require considerable time and expense.

The timing of our sales with our mid-market and large enterprise customers and related revenue recognition is difficult to predict because of the length and unpredictability of the sales cycle for these customers.

Mid-market and large enterprise customers, particularly those in highly regulated industries and those requiring customized applications, may have a lengthy sales cycle for the evaluation and implementation of our platform.

If these customers maintain work-from-home arrangements for a significant period of time, it may cause a lengthening of these sales cycles.

This may cause a delay between increasing operating expenses for such sales efforts and, upon successful sales, the generation of corresponding revenue.

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On occasion, some customers will negotiate their contracts to include a trial period, delayed payment or a number of months on a promotional basis.

If customers maintain work-from-home arrangements for a significant period of time, or if other factors lengthen these sales cycles, it could negatively affect our revenue in future periods.

As the purchase and launch of our platform can be dependent upon customer initiatives, infrequently, our sales cycle can extend to up to twelve months.

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The importance of high-quality support will increase as we expand our business and pursue new customers, particularly mid-market and large enterprise customers.

help our customers quickly resolv e issues and provide effective ongoing support, our ability to sell new software to existing and new customers could suffer and our reputation with existing or potential customers could be harmed.

If we do not help our customers quickly resolve issues and provide effective ongoing support, our ability to sell new software to existing and new customers could suffer and our reputation with existing or potential customers could be harmed.

We store personal information of our customers and their shoppers.

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Third-party applications available on our platform and mobile applications may also store personal information, credit card information, and other confidential information.

We cannot and do not proactively monitor the content that our customers upload or the information provided to us through the applications integrated with our ecommerce platform;

We generally cannot and do not proactively monitor the content that our customers upload or the information provided to us through the applications integrated with our ecommerce platform;

therefore, we do not control the substance of the content on our servers, which may include personal information.

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We could be subject to fines and higher transaction fees, we could face regulatory or other legal action, and our customers could end their relationships with us.

The limitations of liability in our contracts may not be enforceable or adequate or would otherwise protect us from any such liabilities or damages with respect to any particular claim.

limitations of liability in our contracts may not be enforceable or adequate or would otherwise protect us from any such liabilities or damages with respect to any particular claim.

Our insurance coverage, including coverage for errors and omissions and cyber liability, may not continue to be available on acceptable terms or may not be available in sufficient amounts to cover one or more large claims.

Our insurers could deny coverage as to any future claim.

Our insurers could deny coverage as to any future claim and our cyber liability coverage may not adequately protect us against any losses, liabilities and costs that we may incur.

The successful assertion of one or more large claims against us, or changes in our insurance policies, including premium increases or the imposition of large deductible or co-insurance requirements, could have an adverse effect on our business, financial condition, and results of operations.

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If we fail to observe these requirements, our business, operating results, and financial condition could be adversely affected.

Federal, state, or foreign governmental bodies or agencies have in the past adopted, and may in the future adopt, laws and regulations affecting the use of the internet as a commercial medium.

These laws and regulations could impact taxation, internet neutrality, tariffs, content, copyrights, distribution, electronic contracts and other communications, consumer protection, and the

characteristics and quality of services.

Legislators and regulators may make legal and regulatory changes, or apply existing law s, in ways that require us to incur substantial costs, expose us to unanticipated civil or criminal liability, or cause us to change our business practices.

These laws and regulations and resulting increased costs could materially harm our business, result s of operations, and financial condition.

Laws and regulations governing data privacy are constantly evolving.

Many of these laws and regulations, including the European Union’s GDPR and the California Consumer Privacy Act (the “CCPA”), contain detailed requirements regarding collecting and processing personal information, restrict the use and storage of such information, and govern the effectiveness of consumer consent.

They could restrict our ability to store and process personal data (in particular, our ability to use certain data for purposes such as risk or fraud avoidance, marketing or advertising), to control our costs by using certain vendors or service providers, and to offer certain services in certain jurisdictions.

Further, the CCPA requires covered companies to provide new disclosures to California consumers, provide such consumers new ways to opt-out of certain sales of personal information, and allow for a new cause of action for data breaches.

Such laws could restrict our customers’ ability to run their businesses;

for example, by limiting their ability to effectively market to interested shoppers.

This could reduce our revenue and the general demand for our services.

Such laws and regulations are often inconsistent and may be subject to amendment or re-interpretation, which may cause us to incur significant costs and expend significant effort to ensure compliance.

For example, the European Court of Justice recently invalidated the U.S.-EU Privacy Shield as a basis for transfers of personal data from the EU to the U.S.

and introduced requirements to carry out risk assessments in relation to use of other data transfer mechanisms.

This may increase regulatory and compliance burdens and may lead to uncertainty about or interruptions of personal data transfers from Europe to the United States (and beyond).

Use of other data transfer mechanisms now involves additional compliance steps and in the event any court blocks personal data transfers to or from a particular jurisdiction on the basis that certain or all such transfer mechanisms are not legally adequate, this could give rise to operational interruption in the performance of services for customers and internal processing of employee information, greater costs to implement alternative data transfer mechanisms that are still permitted, regulatory liabilities, or reputational harm.

Our response to these requirements globally may not meet the expectations of individual customers, their shoppers, or other stakeholders, which could reduce the demand for our services.

Some customers or other service providers may respond to these evolving laws and regulations by asking us to make certain privacy or data-related contractual commitments that we are unable or unwilling to make.

This could lead to the loss of current or prospective customers or other business relationships.

Certain laws and regulations, like the GDPR, also include restrictions on the transfer of personal information across national borders.

Because our services are accessible worldwide, certain foreign jurisdictions may claim that we are required to comply with such laws even in jurisdictions where we have no local entity, employees or infrastructure.

Some of these laws include strict localization provisions that require certain data to be stored within a particular region or jurisdiction.

We rely on a globally distributed infrastructure in order to be able to provide our services efficiently, and consequently may not be able to meet the expectations of customers who are located in or otherwise subject to such localization requirements, which may reduce the demand for our services.

In addition, the United Kingdom enacted legislation in May 2018 that substantially implements the GDPR, but the United Kingdom’s exit from the EU (which formally occurred on January 31, 2020), commonly referred to as “Brexit”, has created uncertainty with regard to the regulation of data protection in the United Kingdom.

Our failure to comply with these and additional laws or regulations could expose us to significant fines and penalties imposed by regulators, as well as legal claims by our customers, or their shoppers, or other relevant stakeholders.

Similarly, many of these laws require us to maintain an online privacy policy and terms of service that disclose our practices regarding the collection, processing, and disclosure of personal information.

If these disclosures contain any information that a court or regulator finds to be inaccurate or inadequate, we could also be exposed to legal or regulatory liability.

Any such proceedings or violations could force us to spend money in defense or settlement, result in the imposition of monetary liability or demanding injunctive relief, divert management’s time and attention, increase our costs of doing business, and materially adversely affect our reputation.

Mobile devices are increasingly being used to conduct commerce, and if our platform does not operate as effectively when accessed through these devices, our customers and their shoppers may not be satisfied with our services, which could harm our business.

Ecommerce transacted over mobile devices continues to grow more rapidly than desktop transactions.

We are dependent on the interoperability of our platform with third-party mobile devices and mobile operating systems as well as web browsers that are out of our control.

Changes in such devices, systems, or web browsers that degrade the functionality of our platform or give preferential treatment to competitive services could adversely affect usage of our platform.

Mobile ecommerce is a key element in our strategy and effective mobile functionality is integral to our long-term development and growth strategy.

If our customers and their shoppers have difficulty accessing and using our platform on mobile devices, our business and operating results could be adversely affected.

Activities of customers, their shoppers, and our partners could damage our brand, subject us to liability and harm our business and financial results.

Our terms of service prohibit our customers from using our platform to engage in illegal activities and our terms of service permit us to take down a customer’s shop if we become aware of illegal use.

Customers may nonetheless engage in prohibited or illegal activities or upload store content in violation of applicable laws, which could subject us to liability.

Our partners may engage in prohibited or illegal activities, which could subject us to liability.

Furthermore, our brand may be negatively impacted by the actions of customers or partners that are deemed to be hostile, offensive, inappropriate, or illegal.

We do not proactively monitor or review the appropriateness of the content of our customers’ stores or our partners’ activities.

Our safeguards may not be sufficient for us to avoid liability or avoid harm to our brand.

Hostile, offensive, inappropriate, or illegal use could adversely affect our business and financial results.

In many jurisdictions, laws relating to the liability of providers of online services for activities of their shoppers and other third parties are being tested by actions based on defamation, invasion of privacy, unfair competition, copyright and trademark infringement, and other theories.

Any court ruling or other governmental regulation or action that imposes liability on customers of online services in connection with the activities of their shoppers could harm our business.

We could also be subject to liability under applicable law, which may not be fully mitigated by our terms of service.

Any liability attributed to us could adversely affect our brand, reputation, ability to expand our subscriber base, and financial results.

Unfavorable conditions in our industry or the global economy, or reductions in IT spending, could limit our ability to grow our business and negatively affect our results of operations.

Our results of operations may vary based on the impact of changes in our industry or the global economy on us or our customers.

The revenue growth and potential profitability of our business depend on demand for our platform.

Current or future economic uncertainties or downturns could adversely affect our business and results of operations.

Negative conditions in the global economy or individual markets, including changes in gross domestic product growth, financial and credit market fluctuations, political turmoil, natural catastrophes, warfare and terrorist attacks on the United States, Europe, Australia, the Asia Pacific region or elsewhere, could cause a decrease in business investments, including spending on IT and negatively affect our business.

In particular, given our investment in our development capabilities in Ukraine, political turmoil, warfare, or terrorist attacks in Ukraine could negatively affect our business.

To the extent our platform is perceived by customers and potential customers as costly, or too difficult to launch or migrate to, it would negatively affect our growth.

Our revenue may be disproportionately affected by delays or reductions in general IT spending.

Competitors, many of whom are larger and more established than we are, may respond to market conditions by lowering prices and attempting to lure away our customers.

In addition, consolidation in certain industries may result in reduced overall spending on our platform.

We cannot predict the timing, strength, or duration of any economic slowdown, instability or recovery, generally or within any particular industry.

If the economic conditions of the general economy or markets in which we operate worsen from present levels, our business, results of operations and financial condition could be adversely affected.

Natural catastrophic events and man-made problems such as power disruptions, computer viruses, global pandemics, data security breaches and terrorism may disrupt our business.

We rely heavily on our network infrastructure and IT systems for our business operations.

An online attack, damage as a result of civil unrest, earthquake, fire, terrorist attack, power loss, global pandemics (such as the COVID-19 pandemic), telecommunications failure, or other similar catastrophic event could cause system interruptions, delays in accessing our service, reputational harm, and loss of critical data.

Such events could prevent us from providing our platform to our customers.

A catastrophic event that results in the destruction or disruption of our data centers, or our network infrastructure or IT systems, including any errors, defects, or failures in third-party hardware, could affect our ability to conduct normal business operations, and adversely affect our operating results.

In addition, as computer malware, viruses, computer hacking, fraudulent use attempts, and phishing attacks have become more prevalent, we face increased risk from these activities.

These activities threaten the performance, reliability, security, and availability of our platform.

Any computer malware, viruses, computer hacking, fraudulent use attempts, phishing attacks, or other data security breaches to our systems could, among other things, harm our reputation and our ability to retain existing customers and attract new customers.

Many companies that provide cloud-based services have reported a significant increase in cyberattack activity since the beginning of the COVID-19 pandemic.

We could incur substantial costs in protecting or defending our proprietary rights.

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The approach we select may ultimately prove to be inadequate.

Our patents or patents issued to us in the future may not provide us with competitive advantages, or may be successfully challenged by third parties.

Our patents or patents issued in the future may not provide us with competitive advantages, or may be successfully challenged by third parties.

Any of our patents, trademarks, or other intellectual property rights may be challenged or circumvented by others or invalidated through administrative process or litigation.

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Many software companies have the capability to dedicate substantially greater resources to enforce their intellectual property rights and to defend claims that may be brought against them.

Any litigation may also involve patent holding companies or other

adverse patent owners that have no relevant product revenue and against whic h our patent s may therefore provide little or no deterrence.

Any litigation may also involve patent holding companies or other adverse patent owners that have no relevant product revenue and against which our patents may therefore provide little or no deterrence.

We have and may in the future need to enter into settlement agreements that require us to pay settlement fees and that encumber a portion of our intellectual property.

Any claims or litigation co uld cause us to incur significant expenses and, whether or not successfully asserted against us, could require that we pay substantial damages, ongoing royalty or license payments, require us to re-engineer all or a portion of our platform, or require that we comply with other unfavorable terms.

If a third party is able to obtain an injunction preventing us from accessing third-party intellectual property rights, or if we cannot license or develop technology for any infringing aspect of our business, we wou ld be forced to limit or stop sales of our software or cease business activities covered by such intellectual property.

Any claims or litigation could cause us to incur significant expenses and, whether or not successfully asserted against us, could require that we pay substantial damages, ongoing royalty or license payments, require us to re-engineer all or a portion of our platform, or require that we comply with other unfavorable terms.

If a third party is able to obtain an injunction preventing us from accessing third-party intellectual property rights, or if we cannot license or develop technology for any infringing aspect of our business, we would be forced to limit or stop sales of our software or cease business activities covered by such intellectual property.

It could prevent us from competing effectively.

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We cannot predict the outcome of lawsuits, and cannot assure you that the results of any of these actions will not have an adverse effect on our business, operating results or financial condition.

Indemnity provisions in various agreements potentially expose us to substantial liability for intellectual property infringement, data protection, and other losses.

Some of our agreements with customers and other third parties include indemnification provisions under which we agree to indemnify them for losses suffered or incurred as a result of claims of intellectual property infringement, data protection, damages to property or persons, or other liabilities relating to or arising from our platform, services or other contractual obligations.

Some of these indemnity agreements provide for uncapped liability for which we would be responsible, and some indemnity provisions survive termination or expiration of the applicable agreement.

Large indemnity payments could harm our business, results of operations and financial condition.

Although we normally contractually limit our liability with respect to such obligations, we may still incur substantial liability related to them and we may be required to cease use of certain functions of our platform or services as a result of any such claims.

Any dispute with a customer with respect to such obligations could have adverse effects on our relationship with that customer, other existing customers, and new customers.

Such a dispute could harm our business and results of operations.

We rely on third-party proprietary and open source software for our platform.

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The inclusion in our offerings of software or other intellectual property licensed from third parties on a non-exclusive basis could limit our ability to differentiate our offerings from those of our competitors.

To the extent that our platform depends upon the successful operation of third-party software, any undetected errors or defects in such third-party software could impair the functionality of our platform, delay new feature introductions, result in a failure of our platform, and injure our reputation.

To the extent that our platform depends upon the successful operation of third-party software, any undetected errors or defects in such third-

party software could impair the functionality of our platform, delay new feature introductions, result in a failure of our platform, and injure our reputation.

Our use of open source software could subject us to possible litigation or cause us to subject our platform to unwanted open source license conditions that could negatively impact our sales.

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therefore, the potential impact of these terms on our business is unknown and may result in unanticipated obligations regarding our technologies.

If a distributor of open source

software were to allege that we had not complied with its license, we could be required to incur s ignificant legal expenses.

If a distributor of open source software were to allege that we had not complied with its license, we could be required to incur significant legal expenses.

If we combine our proprietary software with open source software or utilize open source software in a certain manner, under some open source licenses, we could be in breach of the license if we did not release the source code of our proprietary software.

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It could prevent us from processing or accepting payment cards or lead to a loss of payment processor partners, even if customer or shopper information has not been compromised.

We provide our ecommerce platform to businesses in highly-regulated industries, which subjects us to a number of challenges and risks.

We provide our ecommerce platform to customers in highly regulated industries such as pharmaceuticals, insurance, healthcare and life sciences, and we may have customers in other highly-regulated industries in the future.

Providing our ecommerce platform to such entities subjects us to a number of challenges and risks.

Selling to such entities can be highly competitive, expensive, and time-consuming, often requiring significant upfront time and expense without any assurance that these efforts will generate a sale.

Customers in highly-regulated industries may demand shorter subscription periods or other contract terms that differ from our standard arrangements, including terms that can lead those customers to obtain broader rights in our offerings than would be standard.

Such entities may have statutory, contractual, or other legal rights to terminate contracts with us or our partners due to a default or for other reasons.

Any such termination may adversely affect our reputation, business, results of operations and financial condition.

Additionally, due to the heightened regulatory environment in which they operate, potential customers in these industries may encounter additional difficulties when trying to move away from legacy ecommerce platforms to an open SaaS platform like the one we provide.

Our ability to use our net operating losses to offset future taxable income may be subject to certain limitations.

As of December 31, 2019, we had accumulated federal and state net operating loss (“NOL”) carryforwards of $118.2 million and $37.3 million, respectively.

The federal and state NOL carryforwards each will begin to expire in 2036.

Certain of the federal

losses have no expiration.

As of December 31, 2020, we had net operating loss (“NOL”) carryforwards of approximately $168.9 million and $66.5 million for federal and state tax purposes, respectively, that are available to reduce future taxable income.

If not utilized, the federal and state NOL carryforwards will begin to expire in 2036.

As of December 31, 2020, approximately $120.4 million of the federal NOL carryforwards do not expire and will carry forward indefinitely until utilized.

As of December 31, we also had total foreign NOL carryforwards of $11.4 million, which do not expire under local law.

In ge neral, under Section 382 of the United States Internal Revenue Code of 1986, as amended (the “Code”), a corporation that undergoes an “ownership change” is subject to limitations on its ability to utilize its pre-change NOLs to offset future taxable income .

Future changes in our stock ownership, some of which are outside of our control, could result in an ownership change under Section 382 of the Code.

Furthermore, our ability to utilize NOLs of companies that we have acquired or may acquire in the future m ay be subject to limitations.

As of December 31, 2020, we had research and development tax credit carryforwards of approximately $5.2 million and $2.2 million for federal and state tax purposes, respectively.

The federal and

state tax credits do not expire and will carry forward indefinitely until utilized.

In general, under Section 382 and 383 of the United States Internal Revenue Code of 1986, as amended, or the Code, a corporation that undergoes an “ownership change” is subject to limitations on its ability to utilize its pre-change NOLs and other tax attributes such as research tax credits to offset future taxable income or income tax.

If it is determined that we have in the past experienced an ownership change, or if we undergo one or more ownership changes as a result of future transactions in our stock, then our ability to utilize NOLs and other pre-change tax attributes could be limited by Sections 382 and 383 of the Code.

Future changes in our stock ownership, many of which are outside of our control, could result in an ownership change under Sections 382 or 383 of the Code.

Furthermore, our ability to utilize NOLs of companies that we may acquire in the future may be subject to limitations.

Furthermore, our losses in Australia are subject to the change of ownership test rules in that jurisdiction that when applied may limit our ability to fully utilize our Australian NOLs.

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The changes in the carryforward/carryback periods as well as the limitation on use of NOLs in the taxable years beginning after December 31, 2020 may affect our ability to fully utilize our available NOLs.

We may be subject to additional obligations to collect and remit sales tax and other taxes.

We may be subject to tax liability for past sales, which could harm our business.

State, local and foreign jurisdictions have differing rules and regulations governing sales, use, value added, and other taxes, and these rules and regulations are subject to varying interpretations that may change over time.

In particular, the applicability of such taxes to our ecommerce platform in various jurisdictions is unclear.

These jurisdictions’ rules regarding tax nexus are complex and vary significantly.

As a result, we could face tax assessments and audits.

Our liability for these taxes and associated penalties could exceed our original estimates.

Jurisdictions in which we have not historically collected or accrued sales, use, value added, or other taxes could assert our liability for such taxes.

This could result in substantial tax liabilities and related penalties for past sales.

It could also discourage customers from using our platform or otherwise harm our business and operating results.

Changes in tax laws or regulations that are applied adversely to us or our customers could increase the cost of our ecommerce platform and adversely impact our business.

New income, sales, use, or other tax laws, statutes, rules, regulations, or ordinances could be enacted at any time.

Any new taxes could adversely affect our domestic and international business operations and our business and financial performance.

Existing tax laws, statutes, rules, regulations, or ordinances could be interpreted, changed, modified or applied adversely to us.

These events could require us or customers using our ecommerce platform to pay additional tax amounts on a prospective or retroactive basis.

They could require us or our customers to pay fines and/or penalties and interest for past amounts deemed to be due.

If we raise our prices to offset the costs of these changes, existing and potential future customers may elect not to continue to subscribe or elect to subscribe to our ecommerce platform in the future.

Additionally, new, changed, modified, or newly interpreted or applied tax laws could increase our customers’ and our compliance, operating and other costs, as well as the costs of our platform.

Any or all of these events could adversely impact our business and financial performance.

Loss of certain tax benefits that we enjoy in Ukraine could have a negative impact on our operating results and profitability.

Substantially all of the persons who provide services used by us in Ukraine are independent contractors who are registered as private entrepreneurs with the tax authorities.

They are third-party suppliers operating as independent contractors, for whom we are not required to pay social duties and personal income tax applicable to employees.

Nevertheless, Ukrainian tax authorities may take a view that would result in additional financial obligations.

Ukrainian tax authorities could assert a position on the classification of our independent contractors contrary to ours.

They could claim we had to withhold personal income tax and to accrue single social contribution in relation to employees’ remuneration.

If a national authority or court enacts legislation or adopts regulations that change the manner in which employees and independent contractors are classified, or makes any adverse determination with respect to some or all of our independent contractors, we could incur significant costs arising from fines or judgments as a result of tax withholding.

All of these factors could in turn result in material adverse effects on our financial condition.

Risks related to our industry and the economy