What changed in this filing

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Item 1A. Risk Factors

2022-08-08 compared with 2022-05-04 · 46 added, 6 removed, 93 unchanged (36% of the section changed)

1 unchanged sentence

Except as set forth below, as of the date of this report, there are no material changes to our risk factors as previously disclosed in Part I, Item 1A of our Annual Report on Form 10-K for the year ended December 31, 2021.

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

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, liability for content, distribution, electronic contracts and other communications, consumer protection, online advertising, and the characteristics and quality of services.

Legislators and regulators may make legal and regulatory changes, or apply existing laws, 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, results 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 General Data Protection Regulation (“GDPR”), the UK General Data Protection Regulation (“UK 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 need for consumer consent.

The California Privacy Rights Act (the “CPRA”) amended the CCPA and created additional obligations relating to consumer data beginning on January 1, 2022 with enforcement expected to begin in 2023.

Like California, Virginia and Colorado have also enacted new privacy regulations set to come into effect in 2023.

Similar laws have been proposed in other states, at the federal level, and in other countries, reflecting a global trend toward more stringent privacy.

These laws and regulations 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.

Such laws and regulations could also 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 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, in 2020, the Court of Justice of the European Union (CJEU) 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, alternative data transfer mechanisms such as the standard contractual clauses (“SSCs”) for personal data transfers.

The European Commission has published revised standard contractual clauses for data transfers from the European Economic Area (“EEA”):

the revised clauses must be used for relevant new data transfers from September 27, 2021.

Existing standard contractual clauses must be migrated to the revised clauses by December 27, 2022.

On March 25, 2022, the European Union and United States announced that they had reached an agreement in principle on a new Trans-Atlantic Data Privacy Framework, which will be translated into legal documents to be adopted in the European Union and United States to provide a renewed basis for transatlantic data transfers.

However, if a new transatlantic data transfer framework is not adopted we may be unable to continue to rely on SCCs or rely upon other alternative means of data transfers from the European Union to the United States.

Similarly, the UK’s Information Commissioner’s Office launched a public consultation on its draft revised data transfers mechanisms in August 2021.

Implementing updated data transfer documentation, whether in the EEA or UK, adds complexity that may hinder or delay the contracting process with our customers and vendors.

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

Use of common 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.

In 2022, Austrian and the French data protection supervisory authorities ruled that, under

certain circumstances, use of Google Analytics by European website operators unlawfully transferred personal data to the United States;

other EU supervisory authorities may reach similar conclusions.

Similarly, in July 2022, the Irish Data Protection Commission (IDPC) was reported to have shared with other European regulators a draft decision that Facebook’s transfers of European Facebook user data from the European Union to the United States should be suspended.

Facebook relies on the SCCs for international data transfers and a decision against Facebook could more broadly revoke or curtail the use of the SCCs as a valid transfer mechanism.

We rely on the SSCs for many international data transfers and this may impact our platform, services and business tools we use and adversely impact us to the extent such decisions are perceived as more broadly applicable to transfers of personal data from Europe to the United States.

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.

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

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If the economic conditions of the general economy or markets in which we operate worsen from present levels, including as a result of recent political and military events in Ukraine, our business, results of operations and financial condition could be adversely affected.

Operations at our strategic development center in Kyiv, Ukraine have been impacted as a result of the ongoing military action by Russia in Ukraine and our business, financial condition and results of operations may be materially adversely affected by any negative impact on the global economy resulting from the conflict in Ukraine or the unavailability of our personnel in Ukraine.

Operations at our strategic development center in Kyiv, Ukraine have been impacted as a result of the ongoing military action by Russia in Ukraine and our business, financial condition and results of operations may be materially adversely affected by any negative impact on the global economy resulting from the war in Ukraine or the unavailability of our personnel in Ukraine.

We have historically operated a strategic development center in Ukraine where we employed 106 individuals as of December 31, 2021.

1 unchanged sentence

As a result, warfare, political turmoil or terrorist attacks in Ukraine could negatively affect our Ukrainian operations and our business.

On February 24, 2022, Russian troops invaded Ukraine.

As a result of the ongoing war, we assisted many of our employees in Kyiv in relocating to neighboring countries to the extent they desired to do so.

As a result of the ongoing war between Russia and Ukraine , we assisted many of our employees in Kyiv in relocating to neighboring countries to the extent they desired to do so.

While the war in Ukraine has not had a material negative impact on the Company or its financial performance to date, the ongoing war could cause harm to our employees and otherwise impair their ability to work for extended periods of time, as well as disrupt telecommunications systems, banks, and other critical infrastructure necessary to conduct business in Ukraine and neighboring countries.

1 unchanged sentence

The war between Russia and Ukraine has resulted in the imposition of sanctions by the United States, other North Atlantic Treaty Organization ("NATO") member states, as well as non-member states against Russia, certain Russian citizens, and enterprises.

More generally, the conflict has led to and could lead to further disruptions in the global financial markets and economy, including, without limitation, currency volatility, inflation and instability in the global capital markets.

More generally, the war has led to and could lead to further disruptions in the global financial markets and economy, including, without limitation, currency volatility, inflation and instability in the global capital markets.

In addition, Russia's prior annexation of Crimea, recent recognition of two separatist republics in the Donetsk and Luhansk regions of Ukraine and subsequent military interventions in Ukraine have led to sanctions being levied by the United States, European Union and other countries against Russia, with additional potential sanctions threatened and/or proposed.

1 unchanged sentence

The extent and duration of the military action, sanctions and resulting market disruptions are impossible to predict, but could be substantial.

Any such disruptions caused by Russian military action or resulting sanctions may magnify the impact of other risks described in Part I, “Item 1A.

The war between Russia and Ukraine could draw military or other intervention from additional countries, which could lead to a much larger war and/or additional sanctions imposed by the United States and other governments that restrict business with specific persons, organizations or countries with respect to certain products or services.

Any such disruptions or escalations caused by Russian military action or resulting sanctions may magnify the impact of other risks described in Part I, “Item 1A.

Risk Factors” in our 2021 Annual Report on Form 10K.

19 unchanged sentences

The full impact of the pandemic on our business will continue to depend on future developments, including but not limited to, the emergence of new coronavirus variants, the duration of the pandemic, the actions undertaken to contain the virus or mitigate its impacts, including actions mandated by federal, state and local governments and health authorities and changing public health directives or restrictions, vaccine efficacy against COVID-19 variants, current or future travel restrictions and how quickly and to what extent normal global economic and operating conditions can or will resume, all of which are rapidly evolving and are difficult to predict.

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

Volatility in the capital markets has been

heightened during recent months and such volatility may continue, which may cause further declines in the price of our common stock.

We may be adversely affected by the effects of inflation.

1 unchanged sentence

The existence of inflation in the economy has resulted in, and may continue to result in, higher interest rates and capital costs, shipping costs, supply shortages, increased costs of labor, weakening exchange rates and other similar effects.

The Federal Reserve has raised, and may again raise, interest rates in response to concerns about inflation.

In response, market interest rates have risen in recent periods.

While the timing and impact of rising interest rates are unknown, a continued increase in market interest rates could have an adverse effect on our cost structure, results of operations and financial condition.

As a result of inflation, we have experienced, and may continue to experience, pressure on our business generation and cost of business.

2 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-Q

Item 1A. Risk Factors