What changed in this filing

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Item 1. Legal Proceedings

2022-11-03 compared with 2022-08-04 · 58 added, 62 removed, 833 unchanged (13% of the section changed)

49 unchanged sentences

Further, our growth depends in part on our ability to introduce and successfully market new gear and categories of gear.

For example, in the last 24 months, we entered into three large new markets, namely the microphones and cameras markets for content creators and the gaming monitors market for both gamers and content creators, and in the future, we intend to introduce other gear designed to appeal to these markets.

For example, in the last 24 months, we entered into four large new markets, namely the microphones and cameras markets for content creators, the gaming monitors market and prebuilt gaming laptops market for both gamers and content creators, and in the future, we intend to introduce other gear designed to appeal to these markets.

To the extent we do so, we will likely encounter competition from large, well-known consumer electronics and peripherals companies.

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Our primary competitors in the market for gaming keyboards and mice include Logitech and Razer.

Our primary competitors in the market for headset and related audio products include Logitech, Razer and HP through its HyperX brand.

Our primary competitors in the market for headset and related audio products include Logitech, Razer, Steel Series and HP through its HyperX brand.

Our primary competitors in the gamer and creator streaming gear market include Logitech, following its acquisition of Blue Microphones, and AVerMedia.

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Our primary competitors in the market for DRAM modules include G.Skill, Kingston and Micron through its Crucial division.

Our primary competitors in the market for prebuilt gaming PCs and laptops include Dell through its Alienware brand, HP through its Omen brand, Asus and Razer.

Our primary competitors in the market for prebuilt gaming PCs and laptops include Dell through its Alienware brand, HP through its Omen brand, Asus, MSI and Razer.

Our primary competitors in the market for custom-built gaming PCs and laptops include iBuypower and Cyberpower.

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dollars, an increase in the value of the U.S.

dollar relative to the currency used in the countries where our gear is sold may result in an increase in the price of our gear in those countries, which may lead to a reduction in sales.

dollar relative to the currency used in the countries where our gear is sold has and may continue to result in an increase in the price of our gear in those countries, which has and may continue to lead to a reduction in sales in such countries.

Likewise, because we pay our suppliers and third-party manufacturers, most of which are located outside of the United States, primarily in U.S.

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higher costs for promotions, customer incentive programs and other initiatives used to stimulate demand;

constraints on consumer spending caused by higher inflation and increased interest rates, leading to weaker consumer demand for our products;

constraints on consumer spending caused by higher inflation, increased interest rates and exchange rate fluctuations, leading to weaker consumer demand for our products;

increased risk of excess and obsolete inventories, which may require write-downs or impairment charges, such as the $22.5 million inventory impairment and related charges recognized during the second quarter of 2022;

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We purchase those DRAM ICs, pursuant to purchase orders and not long-term supply contracts, largely from third-party distributors and, to a lesser extent, directly from those manufacturers.

According to the most recent external market share data for the year ended December 31, 2021, Samsung, a manufacturer of DRAM ICs, had an approximately 43% share of the worldwide DRAM IC market, compared to approximately 28% for Hynix and approximately 23% for Micron in each case for the same period.

According to the most recent external market share data for the trailing twelve months ended June 30, 2022, Samsung, a manufacturer of DRAM ICs, had an approximately 43% share of the worldwide DRAM IC market, compared to approximately 28% for Hynix and approximately 23% for Micron in each case for the same period.

However, should supply from any of these vendors be limited, there can be no assurance that we would be able to meet our needs by purchasing DRAM ICs produced by other manufacturers or from agents and distributors.

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significant disruption of global financial markets, reducing our ability to access capital, which could in the future negatively affect our liquidity, including our ability to repay the indebtedness outstanding from our credit facilities.

Since early 2020, we have experienced an increase in demand for our gear as more people were under shelter-in-place restrictions, which we believe have limited people’s access to alternative forms of entertainment and social interaction, and thus have increased the demand for home entertainment and connecting with others through content creation.

Starting in early 2020 in connection with the COVID-19 pandemic, we experienced an increase in demand for our gear as more people were under shelter-in-place restrictions, which we believe have limited people’s access to alternative forms of entertainment and social interaction, and thus have increased the demand for home entertainment and connecting with others through content creation.

In contrast, as the COVID-19 pandemic subsides, it has resulted in shelter-in-place and other similar restrictions being eased, starting earlier 2021.

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While we do not expect this decision to have a material adverse effect on our business, results of operations or financial condition, such sanctions and other measures, as well as the existing and potential further responses from Russia or other countries to such sanctions, tensions and military actions, could adversely affect the global economy and financial markets and could adversely affect our business, financial condition and results of operations.

In addition, the conflict and sanctions against Russia has and could continue to negatively impact the production and sales of consumer electronics due to a variety of factors such as lower consumer confidence, increase the ongoing disruption of supply chains, worsen the current semiconductor chip shortage since Russia and Ukraine are critical suppliers of neon gas and palladium used in chip production, exacerbate energy shortages and high energy prices, and increase cybersecurity threats.

In addition, the conflict, sanctions against Russia and Russia’s drastic reduction to the supply of natural gas to Europe in response to sanctions has and could continue to negatively impact the production and sales of consumer electronics due to a variety of factors such as lower consumer confidence, increase the ongoing disruption of supply chains, worsen the current semiconductor chip shortage since Russia and Ukraine are critical suppliers of neon gas and palladium used in chip production, exacerbate energy shortages and high energy prices, and increase cybersecurity threats.

These impacts have adversely impacted our operations, sales and profitability, and could continue to do so

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A significant percentage of our net revenue is generated by sales of DRAM modules.

In particular, net revenue generated by sales of DRAM modules accounted for a total of 32.4% and 27.3% of our net revenue in the six months ended June 30, 2022 and

2021 , respectively.

In particular, net revenue generated by sales of DRAM modules accounted for a total of 33.2% and 27.2% of our net revenue in the nine months ended September 30, 2022 and 2021, respectively.

As a result, any significant decrease in average selling prices of our DRAM modules, whether as a result of declining market prices of DRAM ICs or for any other reason, would seriously harm our business.

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Sales to a limited number of customers represent a significant portion of our net revenue, and the loss of one or more of our key customers may seriously harm our business.

In the six months ended June 30, 2022 and 2021, sales to Amazon accounted for 27.5% and 24.6% of our net revenue, respectively.

Sales to our ten largest customers accounted for 52.0% and 50.0% of the same period ended June 30, 2022 and 2021, respectively, of our net revenue.

Our customers typically do not enter into long-term agreements to purchase our gear but instead enter into purchase orders with us from time to time.

In the nine months ended September 30, 2022 and 2021, sales to Amazon accounted for 26.3% and 26.4% of our net revenue, respectively.

Sales to our ten largest customers accounted for 52.0% and 50.5% of the same period ended September 30, 2022 and 2021, respectively, of our net revenue.

Our customers, including Amazon, typically do not enter into long-term agreements to purchase our gear but instead enter into purchase orders with us from time to time.

These purchase orders may generally be cancelled and orders can be reduced or postponed by the customer.

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Likewise, lead times for the delivery of products being manufactured for us can vary significantly and depend on many factors outside of our control, such as demand for manufacturing capacity and availability of components.

In addition, if one of our exclusive or single-source manufacturers were to stop production, or experience product quality or shortage issues, we may be unable to locate or engage a suitable replacement on terms we consider acceptable and, in any event, there would likely be significant delays before we were able to transition production to a new manufacturer and potentially significant costs associated with that transition.

In addition, if one of our exclusive or single-source manufacturers were to stop production, or experience product quality or shortage issues, we may be unable to locate or

engage a suitable replacement on terms we consider acceptable and, in any event, there would likely be significant delays before we were able to transition production to a new manufacturer and potentially significant costs associated with that transition.

Risks relating to product quality .

Our manufacturers or suppliers may provide us with products or components that do not perform reliably or do not meet our quality standards or performance specifications or are susceptible to early failure or contain other

This may seriously harm our reputation, increase our warranty and other costs or lead to product returns or recalls, any of which may seriously harm our business.

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The fact that all of these facilities, manufacturers, suppliers and factories are concentrated in China, Taiwan and countries in Southeast Asia exposes us to numerous risks.

We believe one of the most significant risks associated with this concentration is that production may be interrupted or limited because of labor shortages in southern China and by strains on the local infrastructure.

We believe one of the most significant risks associated with this concentration is that production may be interrupted or limited because of labor shortages in southern China, lockdowns due to COVID-19 outbreaks and by strains on the local infrastructure.

In addition, production at facilities located in China, Taiwan or Southeast Asia, including our own manufacturing, testing and packaging facility in Taiwan, and deliveries from those facilities, may be adversely affected by tensions, hostilities or trade disputes involving China, Taiwan, the United States or other countries.

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As a result, our operating results can be significantly affected by changes in transportation costs.

In that regard, although we ship our DRAM modules, which have selling prices that are relatively high compared to their size and weight, by air, we generally use ocean freight to ship our other products because of their relatively low selling prices compared to their size and weight.

size and weight.

If we underestimate the demand for any of the products we ship by ocean freight, or if deliveries of those products to us by our manufacturers are delayed or interrupted, we may be required to ship those products by air in order to fill orders on a timely basis.

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Under Sections 382 and 383 of the Internal Revenue Code of 1986, as amended, or the Code, if a corporation undergoes an “ownership change,” generally defined as a greater than 50 percentage point change (by value) in its equity ownership by certain stockholders over a three-year period, the corporation’s ability to use its pre-change NOL carryforwards and other pre-change tax attributes (such as research and development tax credits) to offset its post-change income or taxes may be limited.

We have experienced ownership changes in the past, and we may experience ownership changes in the future and/or subsequent shifts in our stock ownership (some of which may be outside our control).

We have experienced ownership changes in the past, and we may experience ownership changes in the future and/or subsequent shifts in our

stock ownership (some of which may be outside our control).

As a result, if we earn net taxable income, our ability to use our pre-change NOL carryforwards to offset U.S.

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Our industry is characterized by rapidly evolving technology and standards.

These technological developments require us to integrate new technology and standards into our gear, create new and relevant categories of gear and adapt to changing business

models in a timely manner.

These technological developments require us to integrate new technology and standards into our gear, create new and relevant categories of gear and adapt to changing business models in a timely manner.

Our competitors may develop or acquire alternative and competing technologies and standards that could allow them to create new and disruptive products or produce similar competitive products at lower costs of production.

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As a result, we may need to invest significant resources in research and development to maintain our market position, keep pace with technological changes and compete effectively.

Our product development expenses were $ 35.1 million and $ 30.7 million for the six months ended June 30 , 2022 and 2021 , respectively, representing 5.3 % and 3.1 % of our net revenue for these periods, respectively.

Our product development expenses were $50.8 million and $45.2 million for the nine months ended September 30, 2022 and 2021, respectively, representing 5.2% and 3.2% of our net revenue for these periods, respectively.

Our failure to improve our gear, create new and relevant categories of gear and adapt to changing business models in a timely manner may seriously harm our business.

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If we do not accurately predict product demand, our business may be seriously harmed.

Order cancellations, product returns, price erosion, product obsolescence and retailer and distributor customer and gamer incentive programs may result in substantial inventory and/or receivables write-downs and seriously harm our business.

Order cancellations, product returns, price erosion, product obsolescence and rebates may result in substantial inventory and/or receivables write-downs and seriously harm our business.

The gear we sell is characterized by rapid technological change and short product life cycles.

As a result, the gear that we hold in inventory may be subject to significant price erosion or may become obsolete, requiring inventory write-downs.

We may experience excess or unsold inventory for a number of reasons, including demand for our gear being lower than our forecasts, order cancellations by our customers and product returns.

We may experience

excess or unsold inventory for a number of reasons, including demand for our gear being lower than our forecasts, order cancellations by our customers and product returns.

In that regard, rights to return products vary by customer and range from the right to return defective products to limited stock rotation rights allowing the exchange of a limited percentage of the customer’s inventory for new product purchases.

If the estimated market values of products held in our finished goods and work in process inventories at the end of any fiscal quarter are below our cost of these products, we will recognize charges to write down the carrying value of our inventories to market value.

In addition, we provide a variety of rebates to both customers and gamers, including instant rebates, volume incentive rebates, back end rebates and mail-in rebates.

We also have contractual agreements and cooperative marketing, promotional and other

arrangements that provide rebates and other financial incentives to our retailer customers and gamers.

In addition, we provide a variety of rebates to both retailer and distributor customers, as well as gamers that purchase gear directly from us, including instant rebates, volume incentive rebates, back end rebates and mail-in rebates.

We also have contractual agreements and cooperative marketing, promotional and other arrangements that provide rebates and other financial incentives to our retailer customers and gamers.

To a limited extent, we also offer financial incentives related to retailer customer inventory of specific products.

The aggregate amount of charges incurred as a result of all of these rebates and other financial incentives is offset from our gross revenue.

For the six months ended June 30, 202 2 and 2021, our gross revenue was reduced approximately by 9.5 % and 7.3 %, respectively, as a result of these rebates.

For the nine months ended September 30, 2022 and 2021, our gross revenue was reduced approximately by 9.2% and 7.9%, respectively, as a result of these rebates.

In the future, we also may be required to write down inventory or receivables due to product obsolescence or because of declines in market prices of our gear.

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Additional financing may not be available on terms acceptable to us or at all.

In particular, our access to other debt financing is limited by the negative covenant in our credit agreement restricting our ability to incur other indebtedness, as well as the financial covenants therein prohibiting our Consolidated Total Net Leverage Ratio from exceeding 3.5 to 1.0 from the quarter ending September 30, 2022 through and including March 31, 2023 and not exceeding 3.0 to 1.0 from the quarter ended June 30, 2023 and each quarter thereafter (provided that upon the occurrence of a Qualified Acquisition, as defined in the credit agreement, such ration can be increased to 3.5 to 1.0 temporarily provided all the requirements defined in the credit agreement are met) or our Consolidated Interest Coverage Ratio being less than 3.0 to 1.0 (both tested quarterly on a trailing four fiscal quarter basis).

In particular, our access to other debt financing is limited by the negative covenant in our credit agreement restricting our ability to incur other indebtedness, as well as the financial covenants therein prohibiting our Consolidated Total Net Leverage Ratio from exceeding 3.5 to 1.0 from the quarter ending September 30, 2022 through and including March 31, 2023 and not exceeding 3.0 to 1.0 from the quarter ended June 30, 2023 and each quarter thereafter (provided that upon the occurrence of a Qualified Acquisition, as defined in the credit agreement, such ratio can be increased to 3.5 to 1.0 temporarily provided all the requirements defined in the credit agreement are met) or our Consolidated Interest Coverage Ratio being less than 3.0 to 1.0 (both tested quarterly on a trailing four fiscal quarter basis).

As a result, such restrictions could limit, perhaps substantially, the amount of indebtedness we are permitted to borrow under other debt arrangements.

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Indebtedness and the terms of our credit facilities may impair our ability to respond to changing business and economic conditions and may seriously harm our business.

We had $245.1 million of indebtedness as of June 30, 2022.

We had $243.7 million of indebtedness as of September 30, 2022.

We have incurred significant indebtedness under our credit facilities to fund working capital and other cash needs and we expect to incur additional indebtedness in the future, particularly if we use borrowings or other debt financing to finance all or a portion of any future acquisitions.

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Upon an event of default under our credit facilities, the lender may require the immediate repayment of all outstanding loans and accrued interest.

In addition, during the continuance of certain events of default under our credit facilities (subject to a cure period for some events of default), interest may accrue at a rate

that is 200 basis points above the otherwise applicable rate.

In addition, during the continuance of certain events of default under our credit facilities (subject to a cure period for some events of default), interest may accrue at a rate that is 200 basis points above the otherwise applicable rate.

As a result, any breach or failure to comply with covenants contained in our debt instruments could seriously harm our business.

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Restrictions under our credit facilities .

We must comply with covenants under our current credit facilities, which require the maintenance of a maximum Consolidated Total Net Leverage Ratio of 3.5 to 1.0 from the quarter ending September 30, 2022 through and including March 31, 2023 and not exceeding 3.0 to 1.0 from the quarter ended June 30, 2023 and each quarter thereafter (provided that upon the occurrence of a Qualified Acquisition, as defined in the credit agreement, such ration can be increased to 3.5 to 1.0 temporarily provided all the requirements defined in the credit agreement are met) and a minimum Consolidated Interest Coverage Ratio of 3.0 to 1.0 (as defined in our credit facilities).

While we were in compliance with all applicable financial covenants under our credit facilities as of June 30, 2022, there can be no assurance that we will not breach these financial covenants in our credit facilities in the future or other covenants in our future credit facilities.

We must comply with covenants under our current credit facilities, which require the maintenance of a maximum Consolidated Total Net Leverage Ratio of 3.5 to 1.0 from the quarter ending September 30, 2022 through and including March 31, 2023 and not exceeding 3.0 to 1.0 from the quarter ended June 30, 2023 and each quarter thereafter (provided that upon the occurrence of a Qualified Acquisition, as defined in the credit agreement, such ratio can be increased to 3.5 to 1.0 temporarily provided all the requirements defined in the credit agreement are met) and a minimum Consolidated Interest Coverage Ratio of 3.0 to 1.0 (as defined in our credit facilities).

While we were in compliance with all applicable financial covenants under our credit facilities as of September 30, 2022, there can be no assurance that we will not breach these financial covenants in our credit facilities in the future or other covenants in our future credit facilities.

Our credit facilities also include covenants that limit or restrict our ability to, among other things, incur liens on our properties, make acquisitions and other investments and sell assets, in each case, subject to specified exceptions.

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We conduct our operations and sell our gear internationally and the effect of business, legal and political risks associated with international operations may seriously harm our business.

Sales to customers outside the United States accounted for 55.8% and 64.3% our net revenue for six months ended June 30, 2022 and 2021, respectively.

Sales to customers outside the United States accounted for 55.6% and 62.7% our net revenue for nine months ended September 30, 2022 and 2021, respectively.

In addition, substantially all of the gear that we sell is manufactured at facilities in Asia.

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export and import duties, changes to import and export regulations, and restrictions on the transfer of funds;

fluctuating exchange rates;

political and economic instability;

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Because we store, process and use data, some of which contain personal data, we are subject to complex and evolving federal, state and local laws and regulations regarding privacy, data protection and other matters.

Many of these laws and regulations are subject to change and uncertain interpretation.

Many of these laws and

regulations are subject to change and uncertain interpretation.

federal and state governments and agencies may in the future enact new legislation and promulgate new regulations governing collection, use, disclosure, storage, processing, transmission and destruction of personal data and other information.

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fines up to the greater of €20 million / £17.5 million or 4% of global turnover.

Although there are legal mechanisms to allow for the transfer of personal data from the United Kingdom, EEA and Switzerland to the United States, uncertainty about compliance with such data protection laws remains, and such mechanisms may not be available or applicable with respect to the personal data processing activities necessary to research, develop and market our products and services.

or applicable with respect to the personal data processing activities necessary to research, develop and market our products and services.

For example, legal challenges in Europe to the mechanisms allowing companies to transfer personal data from the EEA or the United Kingdom to the United States could result in further limitations on the ability to transfer personal data across borders, particularly if governments are unable or unwilling to reach new or maintain existing agreements that support cross-border data transfers.

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At present, there are few if any viable alternatives to the Standard Contractual Clauses.

could affect the manner in which we provide our services, the geographical location or segregation of our relevant systems and operations, and could adversely affect our financial results .

As supervisory authorities issue further guidance on personal data export mechanisms, including circumstances where the standard contractual clauses cannot be used, and/or start taking enforcement action, we could suffer additional costs, complaints and/or regulatory investigations or fines, and/or if we are otherwise unable to transfer personal data between and among countries and regions in which we operate, it could affect the manner in which we provide our services, the geographical location or segregation of our relevant systems and operations, and could adversely affect our financial results .

We are also subject to evolving European Union and United Kingdom privacy laws on cookies, tracking technologies and e-marketing.

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Any compromise or perceived compromise of the security of our systems could damage our reputation, result in disruption or interruption to our business operations, reduce demand for our products and subject us to significant liability and expense as well as regulatory action and lawsuits, which would harm our business, operating results and financial condition.

In addition, any failure or perceived failure by us to comply with privacy or security laws, policies, legal obligations or industry standards, or any security incident that results in the actual or alleged unauthorized release or transfer of personal data, may result in governmental enforcement actions and investigations, including fines and penalties, enforcement orders requiring us to cease processing or operating in a certain way, litigation and/or adverse publicity, including by consumer advocacy groups, and could cause our customers to lose trust in us, which could have material impacts on our revenue and operations and could seriously harm our business.

W e may also face civil claims including representative actions and other class action type litigation (where individuals have suffered harm), potentially amounting to significant compensation or damages liabilities, as well as associated costs, diversion of internal resources, and reputational harm.

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In addition, a retailer or distributor experiencing financial difficulties generally increases our exposure to uncollectible receivables.

Moreover, if one of our distributor or retailer customers experiences financial distress or bankruptcy, they may be required to liquidate their inventory of our

gear, or similar products that compete with our gear, at reduced prices, which can result in substantial over-supply and reduced demand for our gear over the short term.

Moreover, if one of our distributor or retailer customers experiences financial distress or bankruptcy, they may be required to liquidate their inventory of our gear, or similar products that compete with our gear, at reduced prices, which can result in substantial over-supply and reduced demand for our gear over the short term.

If any of these circumstances were to occur, it could seriously harm our business.

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We are required to test goodwill, intangible assets and other long-lived assets for recoverability and may be required to record charges if there are indicators of impairment, and we have in the past recognized impairment charges.

As of June 30, 2022, we had approximately $347.9 million of goodwill, $236.5 million of intangible assets and $72.3 million of other long-lived assets.

As of September 30, 2022, we had approximately $346.3 million of goodwill, $224.3 million of intangible assets and $74.5 million of other long-lived assets.

One of our strategies is to grow through acquisitions of other businesses or technologies and, if we are successful in doing so, these acquisitions may result in goodwill and other long-lived assets.

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Likewise, we hold a trademark registration on certain brands such as K70 only in the United States, Australia and New Zealand and therefore such brands do not have trademark protection in other parts of the world.

If third parties misappropriate or infringe on our brands or we are unable to protect

our brands, or if third parties use the Corsair, Corsair ONE, Dark Core, Dominator, Elgato , Glaive, Harpoon, iCUE , Ironclaw , K70, K100, Nightsword , Origin, SCUF, Slipstream, Scimitar, Vengeance , Virtuoso and Void brand names, or other brand names we maintain, to sell their products in countries where we do not have trademark protection, it may seriously harm our business.

If third parties misappropriate or infringe on our brands or we are unable to protect our brands, or if third parties use the Corsair, Corsair ONE, Dark Core, Dominator, Elgato, Glaive, Harpoon, iCUE, Ironclaw, K70, K100, Nightsword, Origin, SCUF, Slipstream, Scimitar, Vengeance, Virtuoso and Void brand names, or other brand names we maintain, to sell their products in countries where we do not have trademark protection, it may seriously harm our business.

We hold a limited number of patents and pending patent applications.

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In addition, the United Kingdom and the State of California have issued laws that require us to disclose our policy and practices for identifying and eliminating forced labor and human trafficking in our supply chain.

While we have a policy and management systems to identify and avoid these practices in our supply chain, we cannot guarantee that our suppliers will always

be in conformance to these laws and expectations.

While we have a policy and management systems to identify and avoid these practices in our supply chain, we cannot guarantee that our suppliers will always be in conformance to these laws and expectations.

We may face enforcement liability and reputational challenges if we are unable to sufficiently meet these expectations.

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We are controlled by EagleTree, whose interests in our business may be different than yours.

As of June 30, 2022, EagleTree beneficially owned approximately 56.6% of our common stock and is able to control our affairs in all cases.

As of September 30, 2022, EagleTree beneficially owned approximately 56.5% of our common stock and is able to control our affairs in all cases.

Further, pursuant to the terms of an Investor Rights Agreement between us and EagleTree, EagleTree has the right, among other things, to designate the chairman of our board of directors, as well as the right to nominate up to five out of eight directors to our board of directors as long as affiliates of EagleTree beneficially own at least 50% of our common stock, four directors as long as affiliates of EagleTree beneficially own at least 40% and less than 50% of our common stock, three directors as long as affiliates of EagleTree beneficially own at least 30% and less than 40% of our common stock, two directors as long as affiliates of EagleTree beneficially own at least 20% and less than 30% of our common stock and one director as long as affiliates of EagleTree beneficially own at least 10% and less than 20% of our common stock.

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As a result, the market price of our common stock is likely to be volatile, and investors in our common stock may experience a decrease, which could be substantial, in the value of their common stock or the loss of their entire investment for a number of reasons, including reasons unrelated to our operating performance or prospects.

The market price of our common stock could be subject to wide

fluctuations in response to a broad and diverse range of factors, including those described elsewhere in this “Risk Factors” section and the following:

The market price of our common stock could be subject to wide fluctuations in response to a broad and diverse range of factors, including those described elsewhere in this “Risk Factors” section and the following:

variations in our operating performance and the performance of our competitors;

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If our existing stockholders sell, or indicate an intention to sell, substantial amounts of our common stock in the public, the trading price of our common stock could decline.

Based upon the number of shares outstanding as of June 30, 2022, we had outstanding a total of 95.8 million shares of common stock.

Based upon the number of shares outstanding as of September 30, 2022, we had outstanding a total of 96.0 million shares of common stock.

Of these shares, all of the shares of our common stock sold in the initial public offering and in the secondary offering in January 2021, are freely tradable, without restriction, in the public market.

As of June 30, 2022, the holders of approximately 54.2 million shares of our common stock, or approximately 56.6% of our total outstanding common stock based upon the number of shares outstanding as of June 30, 2022, will be entitled to rights with respect to the registration of their shares under the Securities Act.

As of September 30, 2022, the holders of approximately 54.2 million shares of our common stock, or approximately 56.5% of our total outstanding common stock based upon the number of shares outstanding as of September 30, 2022, will be entitled to rights with respect to the registration of their shares under the Securities Act.

Registration of these shares under the Securities Act would result in the shares becoming freely tradable without restriction under the Securities Act, except for shares purchased by affiliates.

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We may from time to time issue additional shares of common stock at a discount from the current trading price of our common stock.

As a result, our stockholders would experience immediate dilution upon the purchase of any shares of our common stock sold at

such discount.

As a result, our stockholders would experience immediate dilution upon the purchase of any shares of our common stock sold at such discount.

In addition, as opportunities present themselves, we may enter into financing or similar arrangements in the future, including the issuance of debt securities, preferred stock or common stock.

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(c) any action asserting a claim arising pursuant to any provision of the DGCL or of our amended and restated certificate of incorporation or our amended and restated bylaws;

or (d) any action asserting a claim related to or

involving our company that is governed by the internal affairs doctrine.

or (d) any action asserting a claim related to or involving our company that is governed by the internal affairs doctrine.

Our amended and restated certificate of incorporation also provides that the federal district courts of the Unites States will be the exclusive forum for the resolution of any complaint asserting a cause of action against us or any of our directors, officers, employees or agents and arising under the Securities Act.

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For instance, a director of our company who also serves as a director, officer or employee of EagleTree, or any of its respective portfolio companies, funds or other affiliates may pursue certain acquisitions or other opportunities that may be complementary to our business and, as a result, such acquisition or other opportunities may not be available to us.

As of June 30, 2022, this provision of our amended and restated certificate of incorporation relates only to the EagleTree director designees.

As of September 30, 2022, this provision of our amended and restated certificate of incorporation relates only to the EagleTree director designees.

These potential conflicts of interest could seriously harm our business if attractive corporate opportunities are allocated by EagleTree to itself or its respective portfolio companies, funds or other affiliates instead of to us.

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Because we have substantial operations in a number of locations worldwide, tax authorities in various jurisdictions may raise questions concerning matters such as transfer pricing, whether revenues or expenses should be attributed to particular countries, the presence or absence of permanent establishments in particular countries and similar matters.

In addition, we have engaged in a number of material restructuring transactions in various jurisdictions, and the tax positions we have adopted in connection with these restructuring transactions may be subject to challenge.

In addition, we have engaged in a number of material restructuring transactions in various jurisdictions, and the tax positions

we have adopted in connection with these restructuring transactions may be subject to challenge.

Accordingly, a material assessment by a tax authority in any jurisdiction could require that we make significant cash payments without reimbursement.

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Reporting obligations as a public company place a considerable strain on our financial and management systems, processes and controls, as well as on our personnel.

In addition, as a public company we are required to document and test our internal controls over

financial reporting pursuant to Section 404 of the Sarbanes-Oxley Act so that our management can certify as to the effectiveness of our internal controls over financial reporting .

Likewise, our independent registered public accounting firm is required to provide an attestation report on the effectiveness of our internal controls over financial reporting in our Annual Report s on Form 10-K .

In addition, as a public company we are required to document and test our internal controls over financial reporting pursuant to Section 404 of the Sarbanes-Oxley Act so that our management can certify as to the effectiveness of our internal controls over financial reporting.

If our management is unable to certify the effectiveness of our internal controls or if our independent registered public accounting firm cannot deliver a report attesting to the effectiveness of our internal controls over financial reporting, or if we identify or fail to remediate material weaknesses in our internal controls, we could be subject to regulatory scrutiny and a loss of public confidence, which could seriously harm our reputation and the market price of our common stock.

In addition, if we do not maintain adequate financial and management personnel, processes and controls, we may not be able to manage our business effectively or accurately report our financial performance on a timely basis, which could cause a decline in our common stock price and may seriously harm our business.

We will incur significant expenses as a result of being a public company, which will negatively impact our financial performance.

We have and will continue to incur significant expenses as a result of being a public company, which have and will continue to negatively impact our financial performance.

As a public company, we incur significant legal, accounting and other expenses that we did not incur as a private company.

20 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 1. Legal Proceedings