6 unchanged sentences
Our actual results could differ materially from those anticipated in the forward-looking statements as a result of a number of factors, including the risks described below and elsewhere in this Annual Report.
−Removed: Our business may suffer from risks related to acquisitions and potential future acquisitions.
−Removed: A substantial portion of our growth has been due to acquisitions, and we continue to evaluate and engage in discussions concerning potential acquisition opportunities, some of which could be material.
−Removed: We cannot assure you that we will be able to successfully integrate, or otherwise realize anticipated benefits from, our recent acquisitions or any future acquisitions.
−Removed: Failure to successfully integrate or otherwise realize the anticipated benefits of these acquisitions could adversely impact our long-term competitiveness and profitability.
−Removed: The integration of any future acquisitions will involve a number of risks that could harm our financial condition, results of operations and competitive position.
−Removed: In particular:
−Removed: The integration plans for our acquisitions are based on benefits that involve assumptions as to future events, including our ability to successfully achieve anticipated synergies, leveraging our existing relationships, as well as general business and industry conditions, many of which are beyond our control and may not materialize.
−Removed: Unforeseen factors may offset components of our integration plans in whole or in part.
−Removed: As a result, our actual results may vary considerably, or be considerably delayed, compared to our estimates;
−Removed: The integration process could disrupt the activities of the businesses that are being combined.
−Removed: The combination of companies requires, among other things, coordination of administrative and other functions.
−Removed: In addition, the loss of key employees, customers or vendors of acquired businesses could materially and adversely impact the integration of the acquired businesses;
−Removed: The execution of our integration plans may divert the attention of our management from other key responsibilities;
−Removed: We may assume unanticipated liabilities and contingencies;
−Removed: Our acquisition targets could fail to perform in accordance with our expectations at the time of purchase.
−Removed: Future acquisitions may be effected through the issuance of our Common Stock or securities convertible into our Common Stock, which could substantially dilute the ownership percentage of our current stockholders.
−Removed: In addition, shares issued in connection with future acquisitions could be publicly tradable, which could result in a material decrease in the market price of our Common Stock.
−Removed: A lack of business opportunities or financial or other resources may impede our ability to continue to expand at desired levels, and our failure to expand operations could have an adverse impact on our financial condition.
−Removed: Certain factors on which our ability to expand each of our divisions is dependent are set forth at Item 7, Management's Discussion and Analysis of Financial Condition and Results of Operations - Opportunities and Challenges.
−Removed: If any of such factors impede our ability to expand our businesses, our financial results and condition could be materially and adversely affected.
−Removed: We are subject to business cycles, seasonality and other outside factors that may negatively affect our business.
−Removed: A recessionary economic environment in any of our markets or other outside factors could have a negative impact on banks, mobile phone operators, content providers, retailers and our individual customers and could reduce the level of transactions in all of our divisions, which would, in turn, negatively impact our financial results.
−Removed: If banks, mobile phone operators and content providers experience decreased demand for their products and services, or if the locations where we provide services decrease in number, we will process fewer transactions, resulting in lower revenues.
−Removed: In addition, a recessionary economic environment could reduce the level of transactions taking place on our networks, which will have a negative impact on our business.
−Removed: Our experience is that the level of transactions on our networks is also subject to substantial seasonal variation.
−Removed: In the EFT Processing Segment, mostly in Europe, we usually experience our heaviest demand for dynamic currency conversion during the third quarter of the fiscal year, coinciding with the tourism season in Europe.
−Removed: As a result, our revenues earned in the third quarter of the year will usually be greater than other quarters of the fiscal year.
−Removed: Additionally, transaction levels have consistently been higher in the fourth quarter of the fiscal year due to increased use of ATMs, prepaid products and money transfer services during the holiday season.
−Removed: Generally, the level of transactions drops in the first quarter, during which transaction levels are generally the lowest we experience during the year, which reduces the level of revenues that we record.
−Removed: In the Money Transfer Segment, we experience increased transaction levels during the May through October timeframe, coinciding with certain holidays and the increase in worker migration patterns.
−Removed: As a result of these seasonal variations, our quarterly operating results may fluctuate materially and could lead to volatility in the price of our shares.
−Removed: Additionally, economic or political instability, wars, civil unrest, terrorism, epidemics (including but not limited to, Coronavirus outbreak) and natural disasters may make money transfers to, from or within a particular country more difficult.
−Removed: The inability to timely complete money transfers could adversely affect our business.
−Removed: The current U.S.
−Removed: presidential administration has proposed certain actions that could have an adverse effect on our money transfer business.
−Removed: Our money transfer business relies on the free flow of funds along remittance corridors, and our largest corridor is the U.S.
−Removed: Our business benefits from free trade agreements such as the North American Free Trade Agreement ("NAFTA").
−Removed: On September 30, 2018, the U.S.
−Removed: drafted a new free trade agreement with Canada and Mexico, which was signed on November 30, 2018.
−Removed: If the new USMCA Agreement is not approved by all three countries, then the U.S.
−Removed: administration may exercise its right to withdraw from NAFTA after a six month notice period.
−Removed: and Mexico have approved the USMCA agreement.
−Removed: Any withdrawal from NAFTA or the adoption of other proposals that tax, restrict or otherwise limit remittances or transfers of money out of the U.S.
−Removed: could have a material adverse impact on our business.
−Removed: A prolonged economic slowdown or lengthy or severe recession in the U.S.
−Removed: or elsewhere could harm our operations.
−Removed: Concerns over slow economic growth, level of sovereign debt in many parts of the world, inflation levels, energy costs and geopolitical issues have contributed to increased volatility and diminished expectations for the world economy and the markets going forward.
−Removed: These factors, combined with volatile energy and commodity prices, reduced business and consumer confidence and slow recovery from high unemployment rates, have negatively impacted the world economy.
−Removed: A prolonged economic downturn or recession could materially impact our results from operations.
−Removed: A recessionary economic environment could have a negative impact on mobile phone operators, content providers, retailers and our other customers and could reduce the level of transactions processed on our networks, which would, in turn, negatively impact our financial results.
−Removed: If content providers and financial institutions experience decreased demand for their products and services, or if the locations where we provide services decrease in number, we will process fewer transactions, resulting in lower revenues.
−Removed: Retaining the founder and key executives of our company, and of companies that we acquire, and finding and retaining qualified personnel is important to our continued success, and any inability to attract and retain such personnel could harm our operations.
−Removed: The development and implementation of our strategy has depended in large part on the co-founder of our company, Michael J.
−Removed: The retention of Mr.
−Removed: Brown is important to our continued success.
−Removed: In addition, the success of the expansion of businesses that we acquire may depend in large part upon the retention of the founders or leaders of those businesses.
−Removed: Our success also depends in part on our ability to hire and retain highly skilled and qualified management, operating, marketing, financial and technical personnel.
−Removed: The competition for qualified personnel in the markets where we conduct our business is intense and, accordingly, we cannot assure you that we will be able to continue to hire or retain the required personnel.
−Removed: Our officers and some of our key personnel have entered into service or employment agreements containing non-competition, non-disclosure and non-solicitation covenants, which grant incentive stock options and/or restricted stock with long-term vesting requirements.
−Removed: However, most of these contracts do not guarantee that these individuals will continue their employment with us.
−Removed: The loss of our key personnel could have a material adverse effect on our business, growth, financial condition or results of operations.
−Removed: We have a moderate amount of debt and other contractual commitments, and while the cost of servicing those obligations is not expected to adversely affect our business, the risk could increase if we incur more debt.
−Removed: We may be required to prepay our obligations under the credit facility.
−Removed: As of December 31, 2019 , total liabilities were $3,078 million , of which $1,091 million represents long-term debt obligations, and total assets were $4,658 million .
−Removed: We may not have sufficient funds to satisfy all such obligations as a result of a variety of factors, some of which may be beyond our control.
−Removed: If the opportunity of a strategic acquisition arises or if we enter into new contracts that require the installation or servicing of infrastructure, such as processing centers, ATM machines or POS terminals on a faster pace than anticipated, we may be required to incur additional debt for these purposes and to fund our working capital needs, including ATM network cash, which we may not be able to obtain.
−Removed: The level of our indebtedness could have important consequences to investors, including the following:
−Removed: our ability to obtain any necessary financing in the future for working capital, capital expenditures, debt service requirements or other purposes may be limited or financing may be unavailable;
−Removed: a portion of our cash flows must be dedicated to the payment of principal and interest on our indebtedness and other obligations and will not be available for use in our business;
−Removed: our level of indebtedness could limit our flexibility in planning for, or reacting to, changes in our business and the markets in which we operate;
−Removed: our level of indebtedness will make us more vulnerable to changes in general economic conditions and/or a downturn in our business, thereby making it more difficult for us to satisfy our obligations;
−Removed: because a portion of our debt bears interest at a variable rate of interest, our actual debt service obligations could increase as a result of adverse changes in interest rates.
−Removed: If we fail to make required debt payments, or if we fail to comply with other covenants in our debt service agreements, we would be in default under the terms of these agreements.
−Removed: This default would permit the holders of the indebtedness to accelerate repayment of this debt and could cause defaults under other indebtedness that we have.
−Removed: Restrictive covenants in our credit facilities may adversely affect us.
−Removed: Our credit facility contains two financial covenants that we must meet as defined in the agreement:
−Removed: (1) Consolidated Total Leverage Ratio, and (2) Consolidated Interest Coverage Ratio.
−Removed: To remain in compliance with our debt covenants, we may be required to increase Earnings Before Interest, Taxes, Depreciation and Amortization ("EBITDA"), repay debt, or both.
−Removed: We cannot assure you that we will have sufficient assets, liquidity or EBITDA to meet or avoid these obligations, which could have an adverse impact on our financial condition.
−Removed: Our ability to secure additional financing for growth or to refinance any of our existing debt is also dependent upon the availability of credit in the marketplace, which has experienced severe disruptions in the past.
−Removed: If we are unable to secure additional financing or such financing is not available at acceptable terms, we may be unable to secure financing for growth or refinance our debt obligations, if necessary.
−Removed: In the event that we need debt financing in the future, uncertainty in the credit markets could affect our ability to obtain debt financing on reasonable terms.
−Removed: In the event we were to require additional debt financing in the future, uncertainty in the credit markets could materially impact our ability to obtain debt financing on reasonable terms.
−Removed: The inability to access debt financing on reasonable terms could materially impact our ability to make acquisitions, refinance existing debt or materially expand our business in the future.
−Removed: Increases in interest rates will adversely impact our results of operations.
−Removed: A portion of our existing indebtedness has variable interest rates.
−Removed: Increases in variable interest rates will increase the amount of interest expense that we pay for our borrowings and have a negative impact on our results of operations.
−Removed: We may be required to recognize impairment charges related to long-lived assets and goodwill recorded in connection with our acquisitions, which would adversely impact our results of operations.
−Removed: Our total assets include approximately $885.7 million , or 19% of total assets, in goodwill and acquired intangible assets recorded as a result of acquisitions.
−Removed: We assess our goodwill, intangible assets and other long-lived assets as and when required by accounting principles generally accepted in the U.S.
−Removed: to determine whether they are impaired.
−Removed: If operating results in any of our key markets, including Australia, Germany, Greece, Malaysia, India, New Zealand, the U.S., U.K., Poland and Romania, deteriorate or our plans do not progress as expected when we acquired these entities, or if capital markets depress our value or that of similar companies, we may be required to record additional impairment write-downs of goodwill, intangible assets or other long-lived assets.
−Removed: This could have a material adverse effect on our results of operations and financial condition.
−Removed: The processes and systems we employ may be subject to patent protection by other parties, and any claims could adversely affect our business and results of operations.
−Removed: In certain countries, including the U.S., patent protection legislation permits the protection of processes and systems.
−Removed: We employ processes and systems in various markets that have been used in the industry by other parties for many years, and which we or other companies that use the same or similar processes and systems consider to be in the public domain.
−Removed: However, we are aware that certain parties believe they hold valid patents that cover some of the processes and systems employed in our business lines in the U.S.
−Removed: and elsewhere.
−Removed: We believe the processes and systems we use have been in the public domain prior to the patents we are aware of.
−Removed: The question of whether a process or system is in the public domain is a legal determination, and if this issue is litigated we cannot be certain of the outcome of any such litigation.
−Removed: If a person were to assert that it holds a patent covering any of the processes or systems we use, we would be required to defend ourselves against such claim.
−Removed: If unsuccessful, we may be required to pay damages for past infringement, which could be trebled if the infringement was found to be willful.
−Removed: We may also be required to seek a license to continue to use the processes or systems.
−Removed: Such a license may require either a single payment or an ongoing license fee.
−Removed: No assurance can be given that we will be able to obtain a license which is reasonable in fee and scope.
−Removed: If a patent owner is unwilling to grant such a license, or we decide not to obtain such a license, we may be required to modify our processes and systems to avoid future infringement.
−Removed: Any such occurrences could materially and adversely affect one or more of our business lines in any affected markets and could result in our reconsidering the rate of expansion of business in those markets.
+Added: GOVERNMENT AND REGULATION
+Added: Because we are a multinational company conducting a complex business in many markets worldwide, we are subject to legal and operational risks related to a broad array of local legal and regulatory requirements which could adversely affect our operations.
+Added: Operating outside of the U.S.
+Added: creates difficulties associated with our international operations, as well as complying with local legal and regulatory requirements.
+Added: We operate financial transaction processing networks that offer new products and services to customers, and the laws and regulations in the markets in which we operate evolve and are subject to rapid change.
+Added: Although we have knowledgeable local staff in countries in which we deem it appropriate, we cannot assure you that we will continue to be found to be operating in compliance with all applicable customs, currency exchange control, data protection, anti-money laundering, sanctions, employment, transfer pricing and other laws or regulations to which we may be subject.
+Added: We also cannot assure you that these laws will not be modified in ways that may adversely affect our business.
+Added: For our epay Segment, as we continue to expand our electronic payment product offerings, certain of those products may become regulated by state, federal or foreign laws, rules and regulations, including the U.S.
+Added: New product offerings may be considered to be money transfer related products which would require licensure for entities distributing or processing such products.
+Added: If such products become more highly regulated and ultimately require licensure, our epay business may be adversely affected.
+Added: Further, if regulations regarding the expiration of gift vouchers change in the countries where we offer them, the revenue epay recognizes from unredeemed vouchers may be negatively affected.
+Added: Our money transfer services are subject to regulation by the U.S.
+Added: states in which we operate, by the U.S.
+Added: federal government and the governments of the other countries in which we operate.
+Added: Changes in the laws, rules and regulations of these governmental entities, and our ability to obtain or retain required licensure, could have a material adverse impact on our results of operations, financial condition and cash flow.
+Added: Additionally, the evolving regulatory environment may change the competitive landscape across various jurisdictions and adversely affect our financial results.
+Added: If governments implement new laws or regulations, or organizations such as Visa ® and Mastercard ® issue new rules, that effectively limit our ability to provide DCC or set fees and/or foreign currency exchange spreads, then our business, financial condition and results of operations could be materially and adversely affected.
+Added: In addition, changes in regulatory interpretations or practices could increase the risk of regulatory enforcement actions, fines and penalties and such changes may be replicated across multiple jurisdictions.
+Added: In March 2018, the E.U.
+Added: proposed additional regulations on cross border transactions within the E.U., including specific regulations on DCC.
+Added: In December 2018, the European Commission, European Council and European Parliament agreed to legislation that requires disclosure of foreign exchange margins applicable to DCC transactions and eventual comparability between foreign exchange rates offered by DCC providers and bank card issuers.
+Added: The new legislation went into effect in April 2020.
+Added: Such regulation could materially and adversely impact our financial results, by reducing the number of DCC transactions performed over our networks and the level of profit we generate from such transactions.
+Added: has passed a regulation called the GDPR that establishes stringent requirements for the collection and processing of personal information of individuals within the E.U.
+Added: The GDPR came into effect across the E.U.
+Added: on May 25, 2018.
+Added: The GDPR established stringent requirements for the collection and processing of personal information of individuals within the E.U., established certain rights of individuals regarding personal information processed by companies as well as requirements for information security and imposed significant fines that may be revenue-based for violation of its requirements.
+Added: The GDPR applies to transfers of personal information from the E.U.
+Added: to countries outside the E.U., including the U.S.
+Added: Any failure on our part to meet the requirements of the GDPR could result in the imposition of fines and penalties that could materially and adversely affect our financial results.
We conduct a significant portion of our business in Central and Eastern European countries, and we have subsidiaries in the Middle East, Asia Pacific and South America, where the risk of continued political, economic and regulatory change that could impact our operating results is greater than in the U.S.
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While we obtain advice from legal and tax advisors as necessary to help assure compliance with tax and regulatory matters, most tax jurisdictions that we operate in have complex and subjective rules regarding the valuation of intercompany services, cross-border payments between affiliated companies and the related effects on income tax, value added tax (“VAT”), transfer tax and share registration tax.
−Removed: Our foreign subsidiaries frequently undergo VAT reviews, and from time to time undergo comprehensive tax reviews and may be required to make additional tax payments should the review result in different interpretations, allocations or valuations of our services.
−Removed: Uncertainties in the interpretation and application of the Tax Cuts and Jobs Act of 2017 could materially affect our tax obligations and effective tax rate.
−Removed: The Tax Cuts and Jobs Act of 2017 (the "Act") was enacted on December 22, 2017, and it significantly affected U.S.
−Removed: tax law by, among other things, changing how the U.S.
−Removed: imposes income tax on multinational corporations.
−Removed: The Act contains several key tax provisions that affect us, including a one-time mandatory transition tax on previously undistributed foreign earnings, a reduction of the corporate income tax rate to 21% effective January 1, 2018, and new taxes on certain foreign sourced earnings, among others.
−Removed: We are required to recognize the effect of the tax law changes in the period of enactment, including determining the transition tax, re-measuring our U.S.
−Removed: deferred tax assets and liabilities and reassessing the net realizability of our deferred tax assets and liabilities.
−Removed: Staff Accounting Bulletin No.
−Removed: 118, Income Tax Accounting Implications of the Tax Cuts and Jobs Act (“SAB 118”) allows us to record provisional amounts during a measurement period not to extend beyond one year of the enactment date.
−Removed: As of December 31, 2017, we recorded provisional estimates in our financial statements with respect to certain income tax effects of the Act for which the accounting is incomplete, but a reasonable estimate was able to be determined.
−Removed: During 2018, we continued to perform additional analysis on the application of the Act, taking into account any additional regulatory guidance that was issued by the applicable taxing authorities, which resulted in adjustments to our previously reported provisional estimates, some of which materially affected our tax obligations and our effective tax rate.
−Removed: In addition, the Act requires complex computations not previously provided in U.S.
−Removed: tax law, and the application of accounting guidance for such items is currently uncertain in some respects.
−Removed: Further, compliance with the Act and the accounting for such provisions require accumulation of information not previously required or regularly produced.
−Removed: Department of Treasury has broad authority to issue regulations and interpretative guidance that may significantly impact how the law is applied and thus impact our results of operations in the period issued.
−Removed: Increases in taxes could negatively impact our operating results.
−Removed: As a result of economic downturns, tax receipts have decreased and/or government spending has increased in many of the countries in which we operate.
+Added: Our foreign subsidiaries frequently undergo VAT reviews, and from time to time undergo comprehensive tax reviews and may be required to make additional tax payments should the review result in different interpretations, allocations or valuations of our products and services.
+Added: Additionally, as a result of economic downturns, tax receipts have decreased and/or government spending has increased in many of the countries in which we operate.
Consequently, governments may increase tax rates or implement new taxes in order to compensate for gaps between tax revenues and expenditures.
−Removed: Additionally, governments may prohibit or restrict the use of certain legal structures designed to minimize taxes.
−Removed: Any such tax increases, whether borne by us or our customers, could negatively impact our operating results or the demand for our products.
+Added: Governments may prohibit or restrict the use of certain legal structures designed to minimize taxes.
+Added: Any such tax increases, whether borne by us or our customers, could negatively impact our operating results or the demand for our products and services.
We could be adversely affected by violations of the U.S.
10 unchanged sentences
If we are found to be liable for violations of the FCPA or similar anti-corruption laws in other jurisdictions, either due to our own or others' acts or inadvertence, we could suffer from criminal or civil penalties which could have a material and adverse effect on our results of operations, financial condition and cash flows.
−Removed: Because we are a multinational company conducting a complex business in many markets worldwide, we are subject to legal and operational risks related to staffing and management, as well as a broad array of local legal and regulatory requirements which could adversely affect our operations.
−Removed: Operating outside of the U.S.
−Removed: creates difficulties associated with staffing and managing our international operations, as well as complying with local legal and regulatory requirements.
−Removed: We operate financial transaction processing networks that offer new products and services to customers, and the laws and regulations in the markets in which we operate evolve and are subject to rapid change.
−Removed: Although we have knowledgeable local staff in countries in which we deem it appropriate, we cannot assure you that we will continue to be found to be operating in compliance with all applicable customs, currency exchange control, data protection, employment, transfer pricing and other laws or regulations to which we may be subject.
−Removed: We also cannot assure you that these laws will not be modified in ways that may adversely affect our business.
−Removed: Our business may be adversely affected if recent developments to applicable data protection regulations in the European Union require us to cease the transfer of personal data from the European Union to the United States.
−Removed: In October 2015, the European Court of Justice invalidated the European Commission’s decision regarding the transfer of personal data from the E.U.
−Removed: to the United States (known as the "Safe Harbor Decision").
−Removed: Prior to the ruling of the European Court of Justice, the Safe Harbor Decision provided a mechanism that facilitated personal data transfers to the United States in compliance with the E.U.’s Directive on Data Protection.
−Removed: Our money transfer business relies on the transfer of E.U.
−Removed: citizens’ personal information to the United States to enable payment of money remittance transactions to beneficiaries through our correspondent network.
−Removed: Despite the October 2015 ruling of the European Court of Justice, we believe we remain in compliance with E.U.
−Removed: regulations regarding the transfer of personal data to the United States and other jurisdictions.
−Removed: If we are unable to transfer personal data from the E.U.
−Removed: to the United States or other countries where we operate, then it could affect the manner in which we provide our services or adversely affect our financial results.
−Removed: Because we derive our revenues from a multitude of countries with different currencies, our business may be adversely affected by local inflation and foreign currency exchange rates and policies.
−Removed: We report our results in U.S.
−Removed: dollars, although a majority of our income is realized in foreign currencies.
−Removed: As exchange rates among the U.S.
−Removed: dollar, the euro, and other currencies fluctuate, the impact of these fluctuations may have a material adverse effect on our results of operations or financial condition as reported in U.S.
−Removed: A significant number of our ATMs are located in countries in the European Union that use the euro.
−Removed: From time to time, some of these countries, have considered leaving the European Union and adopting another currency.
−Removed: If such an event were to occur, the conversion of cash that we hold in banks and in our ATM network in that country from euros to another currency could have an adverse effect on our financial condition or results of operations, either from initial conversion or from subsequent changes in currency exchange rates.
−Removed: The magnitude of this risk increases when cash balances in our ATM network increase during the tourism season.
−Removed: While such currency change does not appear to be an immediate risk under current circumstances, the Company continues to monitor developments in this area and will attempt to mitigate any adverse effects where possible.
−Removed: In November 2016, without advance warning, the Indian government announced that it would remove from circulation two of the most often used Indian banknotes, the Rs 500 and Rs 1000 banknotes.
−Removed: The government expected that the notes would rapidly be replaced with a new Rs 500 note and a new Rs 2000 note, retiring (or demonetizing) completely the Rs 1000 banknote.
−Removed: However, distribution of the new notes was delayed, and circulation of the new notes only commenced in February 2017.
−Removed: While the cash supply was restored during the first months of 2017, the shortage of cash in November and December 2016 adversely impacted Euronet's 2016 fourth quarter revenue earned from ATM cash withdrawals on the more than 12,000 ATMs Euronet owns or operates as well as revenue earned from money transfer remittance payout in India.
−Removed: The action by the Indian government was motivated by a desire to penalize Indians holding large quantities of money earned from illicit business.
−Removed: Any similar action by other governments in countries in which we do business could have an adverse effect on our business.
−Removed: Our Money Transfer Segment is subject to foreign currency exchange risks because our customers deposit funds in one currency at our retail and agent locations worldwide or in an online account and we typically deliver funds denominated in a different, destination country currency.
−Removed: Although we use foreign currency derivative contracts to mitigate a portion of this risk, we cannot eliminate all of the exposure to the impact of changes in foreign currency exchange rates for the period between collection and disbursement of the money transfers.
−Removed: We have various mechanisms in place to discourage takeover attempts, which may reduce or eliminate our stockholders' ability to sell their shares for a premium in a change of control transaction.
−Removed: Various provisions of our certificate of incorporation and bylaws and of Delaware corporate law may discourage, delay or prevent a change in control or takeover attempt of our company by a third party which our management and board of directors opposes.
−Removed: Public stockholders who might desire to participate in such a transaction may not have the opportunity to do so.
−Removed: These anti-takeover provisions could substantially impede the ability of public stockholders to benefit from a change of control or change in our management and board of directors.
−Removed: These provisions include:
−Removed: preferred stock that could be issued by our board of directors to make it more difficult for a third party to acquire, or to discourage a third party from acquiring, a majority of our outstanding voting stock;
−Removed: classification of our directors into three classes with respect to the time for which they hold office;
−Removed: supermajority voting requirements to amend the provision in our certificate of incorporation providing for the classification of our directors into three such classes;
−Removed: non-cumulative voting for directors;
−Removed: control by our board of directors of the size of our board of directors;
−Removed: limitations on the ability of stockholders to call special meetings of stockholders;
−Removed: advance notice requirements for nominations of candidates for election to our board of directors or for proposing matters that can be acted upon by our stockholders at stockholder meetings.
−Removed: an exclusive forum bylaw provision for all internal corporate claims.
−Removed: We are authorized to issue up to a total of 90 million shares of Common Stock, potentially diluting equity ownership of current holders and the share price of our Common Stock.
−Removed: We believe that it is necessary to maintain a sufficient number of available authorized shares of our Common Stock in order to provide us with the flexibility to issue Common Stock for business purposes that may arise as deemed advisable by our Board.
−Removed: These purposes could include, among other things, (i) to declare future stock dividends or stock splits, which may increase the liquidity of our shares;
−Removed: (ii) the sale of stock to obtain additional capital or to acquire other companies or businesses, which could enhance our growth strategy or allow us to reduce debt if needed;
−Removed: (iii) use in additional stock incentive programs and (iv) other bona fide purposes.
−Removed: Our Board of Directors may issue the available authorized shares of Common Stock without notice to, or further action by, our stockholders, unless stockholder approval is required by law or the rules of the NASDAQ Global Select Market.
−Removed: The issuance of additional shares of Common Stock may significantly dilute the equity ownership of the current holders of our Common Stock.
−Removed: Further, over the course of time, all of the issued shares have the potential to be publicly traded, perhaps in large blocks.
−Removed: This may result in dilution of the market price of the Common Stock.
−Removed: An additional 8.7 million shares of Common Stock, representing approximately 16% of the shares outstanding as of December 31, 2019 , could be added to our total Common Stock outstanding through the exercise of options or the issuance of additional shares of our Common Stock pursuant to existing convertible debt and other agreements.
−Removed: Once issued, these shares of Common Stock could be traded into the market and result in a decrease in the market price of our Common Stock.
−Removed: As of December 31, 2019 , we had 3.0 million and 0.5 million options and restricted stock awards outstanding, respectively, held by our directors, officers and employees, which entitle these holders to acquire an equal number of shares of our Common Stock.
−Removed: Of this amount, 1.7 million options are vested and exercisable as of December 31, 2019 .
−Removed: Approximately 2.4 million additional shares of our Common Stock may be issued in connection with our stock incentive and employee stock purchase plans.
−Removed: Accordingly, based on current trading prices of our Common Stock, approximately 2.1 million shares could potentially be added to our total current Common Stock outstanding through the exercise of options and the vesting of restricted stock awards, which could adversely impact the trading price for our stock.
−Removed: Of the 3.5 million total options and restricted stock awards outstanding, an aggregate of 2.1 million options and restricted stock awards are held by persons who may be deemed to be our affiliates and who would be subject to Rule 144.
−Removed: Thus, upon exercise of their options or sale of shares for which restrictions have lapsed, these affiliates' shares would be subject to the trading restrictions imposed by Rule 144.
−Removed: The remainder of the common shares issuable under option and restricted stock award arrangements would be freely tradable in the public market.
−Removed: Over the course of time, all of the issued shares have the potential to be publicly traded, perhaps in large blocks.
−Removed: Upon the occurrence of certain events, another 2.8 million shares of Common Stock could be issued upon conversion of the Company's convertible notes issued in March 2019;
−Removed: in certain situations, the number of shares issuable could be higher.
−Removed: While we have stated that we intend to settle any conversion of these notes by issuing cash for the principal value of the
−Removed: notes and issuing shares of Common Stock for the conversion value in excess of the principal, which would significantly
−Removed: reduce the number of shares issued upon conversion, if our financial condition significantly and adversely changes, we may not be able to settle as intended should the notes be converted.
−Removed: Our competition in the EFT Processing Segment, epay Segment and Money Transfer Segment includes large, well-financed companies and financial institutions larger than us with earlier entry into the market.
−Removed: As a result, we may lack the financial resources and access to capital needed to capture increased market share.
−Removed: EFT Processing Segment - Our principal EFT Processing competitors include ATM networks owned by banks and national switches consisting of consortiums of local banks that provide outsourcing and transaction services only to banks and independent ATM deployers in that country.
−Removed: Large, well-financed companies offer ATM network and outsourcing services that compete with us in various markets.
−Removed: In some cases, these companies also sell a broader range of card and processing services than we do, and are, in some cases, willing to discount ATM services to obtain large contracts covering a broad range of services.
−Removed: Competitive factors in our EFT Processing Segment include network availability and response time, breadth of service offering, price to both the bank and to its customers, ATM location and access to other networks.
−Removed: epay Segment - We face competition in the epay business in all of our markets.
−Removed: A few multinational companies operate in several of our markets, and we therefore compete with them in a number of countries.
−Removed: In other markets, our competition is from
−Removed: smaller, local companies.
−Removed: Major retailers with high volumes are in a position to demand a larger share of commissions or to negotiate directly with the mobile phone operators, which may compress our margins.
−Removed: Additionally, certain of our content providers, including mobile phone operators have entered into direct contracts with retailers and/or have developed processing technology that diminishes or eliminates the need for intermediate processors and distributors.
−Removed: Money Transfer Segment - Our primary competitors in the money transfer and bill payment business include other large money transfer companies and electronic money transmitters, as well as certain major national and regional banks, financial institutions and independent sales organizations.
−Removed: Our competitors include The Western Union Company and MoneyGram International Inc.
−Removed: The Western Union Company has a significant competitive advantage due to its greater resources and access to capital for expansion.
−Removed: This may allow them to offer better pricing terms to customers, which may result in a loss of our current or potential customers or could force us to lower our prices.
−Removed: Either of these actions could have an adverse impact on our revenues.
−Removed: In addition, our competitors may have the ability to devote more financial and operational resources than we can to the development of new technologies that provide improved functionality and features to their product and service offerings.
−Removed: If successful, their development efforts could render our product and service offerings less desirable, resulting in the loss of customers or a reduction in the price we could demand for our services.
−Removed: In addition to traditional money payment services, new technologies are emerging that may effectively compete with traditional money payment services, such as stored-value cards, debit networks, web-based services and digital currencies.
−Removed: Our continued growth depends upon our ability to compete effectively with these alternative technologies.
−Removed: If processing fees and commissions in our epay business continue to decline, our financial results may be adversely affected.
−Removed: Our epay Segment derives revenues based on processing fees and commissions from mobile phone operators and other content providers.
−Removed: Growth in our prepaid mobile business in any given market is driven by a number of factors, including the overall pace of growth in the prepaid mobile phone market which is impacted by competing postpaid services, our market share of the retail distribution capacity, the level of commission that is paid to the various intermediaries in the prepaid mobile airtime distribution chain, and the value provided to the retailers through the types of products offered and the level of integration with their systems.
−Removed: Also, competition among prepaid mobile distributors results in retailer churn and the reduction of commissions paid by prepaid content providers, although a portion of such reductions can be passed along to retailers.
−Removed: In recent years, processing fees and commissions per transaction have declined in most markets, and we expect that trend to continue.
−Removed: Additionally, the number of prepaid mobile top-up transactions we process has declined in certain markets.
−Removed: We have generally been able to mitigate these trends due to growth in the number of higher margin digital media product transactions, driven by acquisitions and organic growth.
−Removed: If we cannot continue to increase our transaction levels and per-transaction fees and commissions continue to decline, the combined impact of these factors could adversely impact our financial results.
−Removed: Our epay and money transfer businesses may be susceptible to fraud and/or credit risks occurring at the retailer, correspondent and/or consumer level, which could adversely affect our results of operations.
−Removed: In our epay Segment, we contract with retailers that accept payment on our behalf, which we then transfer to a trust or other operating account for payment to content providers.
−Removed: In the event a retailer does not transfer to us payments that it receives for prepaid content sales, whether as a result of fraud, insolvency, billing delays or otherwise, we are responsible to the content provider for the cost of the product sold.
−Removed: We can provide no assurance that retailer fraud or insolvency will not increase in the future or that any proceeds we receive under our credit enhancement or insurance policies will be adequate to cover losses resulting from retailer fraud, which could have a material adverse effect on our business, financial condition and results of operations.
−Removed: With respect to our money transfer business, we conduct the majority of our business through our agent network, which provides money transfer services directly to consumers at retail locations.
−Removed: Our agents collect funds directly from consumers and in turn, we collect from the agents the proceeds due to us resulting from the money transfer transactions.
−Removed: In addition, we advance funds to our correspondent banks to pay out money transfers and they may hold our funds for several days or more pending payment to beneficiaries.
−Removed: Therefore, we have credit exposure to our agents and correspondents.
−Removed: Additionally, our Company-owned stores transact a significant amount of business in cash.
−Removed: Although we have safeguards in place, cash transactions have a higher exposure to fraud and theft than other types of transactions.
−Removed: The failure of agents owing us significant amounts to remit funds to us or to repay such amounts, or the loss of cash in our stores could have a material adverse effect on our business, financial condition and results of operations.
+Added: Our operating results in the money transfer business may be harmed if there are adverse changes in worker immigration patterns, our ability to expand our share of the existing electronic market and to expand into new markets and our ability to continue complying with regulations issued by the OFAC, BSA, FINCEN, USA PATRIOT Act regulations, the Dodd-Frank Act or any other existing or future regulations that impact any aspect of our money transfer business.
+Added: Our money transfer business primarily focuses on workers who migrate to foreign countries in search of employment and then send a portion of their earnings to family members in their home countries.
+Added: Changes in U.S.
+Added: and foreign government policies or enforcement, including changes that have been, or may be, implemented by the U.S.
+Added: President or Congress, toward immigration may have a negative effect on immigration in the U.S.
+Added: and other countries, which could also have an adverse impact on our money transfer revenues.
+Added: and foreign regulators have become increasingly aggressive in the enforcement of the various regulatory regimes applicable to our businesses and the imposition of fines and penalties in the event of violations.
+Added: Our ability to continue complying with the requirements of OFAC, BSA, FINCEN, the USA PATRIOT Act, the Dodd-Frank Act and other regulations (both U.S.
+Added: and foreign) is important to our success in achieving growth and an inability to do this could have an adverse impact on our revenues and earnings.
+Added: Anti-money laundering, sanctions, and consumer protection regulations require us to be responsible for the compliance by agents with such regulations.
+Added: Although we have training and compliance programs in place, we cannot be certain our agents will comply with such regulations and we may be held responsible for their failure to comply, resulting in fines and penalties.
+Added: Future growth and profitability depend upon expansion within the markets in which we currently operate and the development of new markets for our money transfer services.
+Added: Our expansion into new markets is dependent upon our ability to successfully apply our existing technology or to develop new applications to satisfy market demand.
+Added: We may not have adequate financial and technological resources to expand our distribution channels and product applications to satisfy these demands, which may have an adverse impact on our ability to achieve expected growth in revenues and earnings.
+Added: SUPPLY CHAIN AND THIRD PARTIES
Because we typically enter into short-term contracts with content providers and retailers, our epay business is subject to the risk of non-renewal of those contracts, or renewal under less favorable terms.
7 unchanged sentences
Commission revenue or fee reductions by any of the content providers could also have a material adverse effect on our business, financial condition or results of operations.
−Removed: The growth and profitability of our epay business may be adversely affected by changes in state, federal or foreign laws, rules and regulations.
−Removed: As we continue to expand our electronic payment product offerings, certain of those products may become regulated by state, federal or foreign laws, rules and regulations, including the U.S.
−Removed: New product offerings may be considered to be money transfer related products which would require licensure for entities distributing or processing such products.
−Removed: If such products become more highly regulated and ultimately require licensure, our epay business may be adversely affected.
−Removed: Further, if regulations regarding the expiration of gift vouchers change in the countries where we offer them, the revenue epay recognizes from unredeemed vouchers may be negatively affected.
−Removed: The growth in our epay business may be adversely affected if we are unable to expand and differentiate our offering of new electronic payment products.
The prepaid marketplace is currently experiencing high growth in the differentiation of product offerings.
10 unchanged sentences
The inability to continue to sign or maintain these agreements, or to continue to accept the credit and debit cards of local banks and international card organizations at our ATMs in the future, could have a material adverse effect on our business, growth, financial condition or results of operations.
+Added: In some cases, we are dependent upon international card organizations and national transaction processing switches to provide assistance in obtaining settlement from card issuers of funds relating to transactions on our ATMs, and any failure by them to provide the required cooperation could result in our inability to obtain settlement of funds relating to transactions.
+Added: Our ATMs dispense cash relating to transactions on credit and debit cards issued by banks.
+Added: We have in place arrangements for the settlement to us of all of those transactions, but in some cases, we do not have a direct relationship with the card-issuing bank and rely for settlement on the application of rules that are administered by international card associations (such as Vis a ® or Mastercard ® ) or national transaction processing switching networks.
+Added: If a bankcard issuer fails to settle transactions in accordance with those rules, we are dependent upon cooperation from such associations or switching networks to enforce our right of settlement against such associations.
+Added: Failure by such organizations or switches to provide the required cooperation could result in our inability to obtain settlement of funds relating to transactions and adversely affect our business.
+Added: Moreover, international card associations and issuers of their cards (and, in the case of Visa, member banks) have the ability to change or apply their rules in ways that could negatively impact our business.
+Added: As an example, DCC is not permitted on certain cards in certain geographic territories, and the scope of such restrictions could be extended.
+Added: Any such change or application of the rules of international card associations could materially and adversely affect our business.
+Added: We could incur substantial losses if one of the third party depository institutions or financial institutions we use in our operations were to fail.
+Added: As part of our business operations, we maintain cash balances at third party depository institutions.
+Added: We could incur substantial losses if a financial institution in which we have significant deposits fails.
+Added: Our money transfer business involves transferring funds internationally and is dependent upon foreign and domestic financial institutions, including our competitors, to execute funds transfers and foreign currency transactions.
+Added: Changes to existing regulations of financial institution operations, such as those designed to combat terrorism or money laundering, could require us to alter our operating procedures in a manner that increases our cost of doing business or to terminate certain product offerings.
+Added: In addition, as a result of existing regulations and/or changes to those regulations, financial institutions could decide to cease providing the services on which we depend, requiring us to terminate certain product offerings.
+Added: We are required under certain national laws and the rules of financial transaction switching networks in many of our markets to have ''sponsors'' to operate ATMs and switch ATM transactions.
+Added: Our failure to secure ''sponsor'' arrangements in any of our markets that require bank sponsors could prevent us from doing business in that market.
+Added: Under the laws of some countries, only a licensed financial institution may operate ATMs.
+Added: Because we are not a licensed financial institution outside of the E.U.
+Added: we are required to have a ''sponsor'' bank to conduct ATM operations in those countries.
+Added: In addition, in all of our non-E.U.
+Added: markets, the rules governing national transaction switching networks owned or operated by banks, and other international financial transaction switching networks operated by organizations such as Citibank, Visa ® and Mastercard ® , require any company sending transactions through these switches to be a bank or a technical service processor that is approved and monitored by a bank.
+Added: As a result, the operation of our ATM network in many of our markets depends on our ability to secure these ''sponsor'' arrangements with financial institutions.
+Added: To date, we have been successful in reaching contractual arrangements that have permitted us to operate in all of our target markets.
+Added: However, we cannot assure you that we will continue to be successful in reaching these arrangements, and it is possible that our current arrangements will not continue to be renewed.
+Added: If we are unable to secure “sponsor” arrangements in any market, we could be prevented from doing business in that market.
+Added: We rely on third party financial institutions to provide us with a portion of the cash required to operate our ATM networks in certain countries.
+Added: If these institutions were unable or unwilling to provide us with the cash necessary to operate our ATM networks, we would be required to locate additional alternative sources of cash to operate these networks.
+Added: In our EFT Processing Segment, we primarily rely on third party financial institutions in certain countries in Europe and Asia Pacific to provide us with the cash required to operate our ATM networks.
+Added: Under our agreements with these providers, we pay fees or interest, which is generally variable and could increase, based on the total amount of cash we are using from such provider at a given time, as well as other costs such as bank fees and cash transportation costs.
+Added: As of December 31, 2020, the amount of cash used in our ATM networks under these supply agreements was approximately $616.3 million.
+Added: Before the cash is disbursed to ATM customers, beneficial ownership of the cash is generally retained by the cash providers, and we have no access or proprietary rights to the cash.
+Added: Our existing agreements with cash providers are generally multi-year agreements that expire at various times.
+Added: However, each provider may have the right to demand the return of all or any portion of its cash at any time upon the occurrence of certain events beyond our control, including certain bankruptcy events affecting us or our subsidiaries, or a breach of the terms of our cash provider agreements.
+Added: If any of our cash supply providers were to demand return of their cash or terminate their agreements with us and remove their cash from our ATM devices, or if they fail to provide us with the cash our operations require, our ability to operate the ATM networks to which the provider supplies cash would be jeopardized, and we would need to locate additional alternative sources of cash, including, potentially the increased use of our own cash.
+Added: Under those circumstances, the terms and conditions of the new or renewed agreements could potentially be less favorable to us, which would negatively impact our results of operations.
+Added: Furthermore, restrictions on our access to cash to supply our ATMs could severely restrict our ability to keep our ATMs operating, which could subject us to performance penalties under our contracts with our customers.
+Added: We have encountered difficulty in obtaining cash supply arrangements in certain of our markets, including Greece, and directly provide cash for our ATM transactions in those markets.
+Added: While the amounts involved are currently well within our capabilities given our cash flows and available financing, any failure to renew a major cash supply arrangement could require that we commit significant financial resources to the supply of cash to our ATM networks, which could adversely impact our results of operations.
+Added: If we are unable to maintain our money transfer agent and correspondent networks, our business may be adversely affected.
+Added: Our consumer-to-consumer money transfer based revenues are primarily generated through the use of our agent and correspondent networks.
+Added: If agents or correspondents decide to leave our network or if we are unable to sign new agents or correspondents, our revenue and profit growth rates may be adversely affected.
+Added: Our agents and correspondents are also subject to a wide variety of laws and regulations that vary significantly, depending on the legal jurisdiction.
+Added: Changes in these laws and regulations could adversely affect our ability to maintain the networks or the cost of providing money transfer services.
+Added: In addition, agents may generate fewer transactions or less revenue due to various factors, including increased competition.
+Added: Because our agents and correspondents are third parties that may sell products and provide services in addition to our money transfer services, they may encounter business difficulties unrelated to the provision of our services, which may cause the agents or correspondents to reduce their number of locations or hours of operation, or cease doing business altogether.
+Added: CORPORATE GROWTH STRATEGIES
+Added: Our business may suffer from risks related to acquisitions and potential future acquisitions.
+Added: A substantial portion of our growth has been due to acquisitions, and we continue to evaluate and engage in discussions concerning potential acquisition opportunities, some of which could be material.
+Added: We cannot assure you that we will be able to successfully integrate, or otherwise realize anticipated benefits from, our recent acquisitions or any future acquisitions.
+Added: Failure to successfully integrate or otherwise realize the anticipated benefits of these acquisitions could adversely impact our long-term competitiveness and profitability.
+Added: The integration of any future acquisitions will involve a number of risks that could harm our financial condition, results of operations and competitive position.
+Added: In particular:
+Added: The integration plans for our acquisitions are based on benefits that involve assumptions as to future events, including our ability to successfully achieve anticipated synergies, leveraging our existing relationships, as well as general business and industry conditions, many of which are beyond our control and may not materialize.
+Added: Unforeseen factors may offset components of our integration plans in whole or in part.
+Added: As a result, our actual results may vary considerably, or be considerably delayed, compared to our estimates;
+Added: The integration process could disrupt the activities of the businesses that are being combined.
+Added: The combination of companies requires, among other things, coordination of administrative and other functions.
+Added: In addition, the loss of key employees, customers or vendors of acquired businesses could materially and adversely impact the integration of the acquired businesses;
+Added: The execution of our integration plans may divert the attention of our management from other key responsibilities;
+Added: We may assume unanticipated liabilities and contingencies;
+Added: Our acquisition targets could fail to perform in accordance with our expectations at the time of purchase.
+Added: Future acquisitions may be effected through the issuance of our common stock or securities convertible into our common stock, which could substantially dilute the ownership percentage of our current stockholders.
+Added: In addition, shares issued in connection with future acquisitions could be publicly tradable, which could result in a material decrease in the market price of our common stock.
+Added: Certain factors on which our ability to expand each of our divisions is dependent are set forth at Item 7, Management's Discussion and Analysis of Financial Condition and Results of Operations - Opportunities and Challenges.
+Added: If any of such factors impede our ability to expand our businesses, our results of operations and financial condition could be materially and adversely affected.
Our operating results depend, in part, on the volume of transactions on ATMs in our network and the fees we can collect from processing these transactions.
17 unchanged sentences
If we cannot continue to increase our transaction levels and per-transaction fees generally decline, our results would be adversely affected.
−Removed: Tightening of regulations may adversely affect our results.
−Removed: The evolving regulatory environment may change the competitive landscape across various jurisdictions and adversely affect our financial results.
−Removed: If governments implement new laws or regulations, or organizations such as Visa and Mastercard issue new rules, that effectively limit our ability to provide DCC or set fees and/or foreign currency exchange spreads, then our business, financial condition and results of operations could be materially and adversely affected.
−Removed: In addition, changes in regulatory interpretations or practices could increase the risk of regulatory enforcement actions, fines and penalties and such changes may be replicated across multiple jurisdictions.
−Removed: In March 2018, the E.U.
−Removed: proposed additional regulations on cross border transactions within the E.U., including specific regulations on DCC.
−Removed: In December 2018, the European Commission, European Council and European Parliament agreed to legislation that requires disclosure of foreign exchange margins applicable to DCC transactions and eventual comparability between foreign exchange rates offered by DCC providers and bank card issuers.
−Removed: The new legislation comes into effect in April 2020.
−Removed: Such regulation could materially and adversely impact our financial results, by reducing the number of DCC transactions performed over our networks and the level of profit we generate from such transactions.
−Removed: has passed a regulation called the GDPR that establishes stringent requirements for the collection and processing of personal information of individuals within the E.U.
−Removed: The GDPR came into effect across the E.U.
−Removed: on May 25, 2018.
−Removed: The GDPR established stringent requirements for the collection and processing of personal information of individuals within the E.U., established certain rights of individuals regarding personal information processed by companies as well as requirements for information security and imposed significant fines that may be revenue-based for violation of its requirements.
−Removed: The GDPR applies to transfers of personal information from the E.U.
−Removed: to countries outside the E.U., including the U.S.
−Removed: Any failure on our
−Removed: part to meet the requirements of the GDPR could result in the imposition of fines and penalties that could materially and adversely affect our financial results.
−Removed: Developments in payments could materially reduce our transaction levels and revenues.
−Removed: Certain developments in the field of payments may reduce the need for ATMs, prepaid product POS terminals and money transfer agents.
−Removed: An example of this type of development is the use of near field technology in retail transactions, which if widely accepted in a market reduces the need for cash and can negatively impact the level of ATM transactions in that market.
−Removed: Advances in biometric payment solutions could have similar adverse impacts.
−Removed: These developments may reduce the transaction levels that we experience on our networks in the markets where they occur.
−Removed: Financial institutions, retailers and agents could elect to increase fees to their customers for using our services, which may cause a decline in the use of our services and have an adverse effect on our revenues.
−Removed: If transaction levels over our existing network of ATMs, POS terminals, agents and other distribution methods do not increase, growth in our revenues will depend primarily on increased capital investment for new sites and developing new markets, which reduces the margin we realize from our revenues.
−Removed: The mobile phone industry is a rapidly evolving area, in which technological developments, in particular the development of new billing models (such as "all you can eat" plans) and distribution methods or services, may affect the demand for other services in a dramatic way.
−Removed: The development of any new models or technology that reduce the need or demand for prepaid mobile airtime could materially and adversely affect our business.
−Removed: In some cases, we are dependent upon international card organizations and national transaction processing switches to provide assistance in obtaining settlement from card issuers of funds relating to transactions on our ATMs, and any failure by them to provide the required cooperation could result in our inability to obtain settlement of funds relating to transactions.
−Removed: Our ATMs dispense cash relating to transactions on credit and debit cards issued by banks.
−Removed: We have in place arrangements for the settlement to us of all of those transactions, but in some cases, we do not have a direct relationship with the card-issuing bank and rely for settlement on the application of rules that are administered by international card associations (such as Visa or Mastercard) or national transaction processing switching networks.
−Removed: If a bankcard association fails to settle transactions in accordance with those rules, we are dependent upon cooperation from such organizations or switching networks to enforce our right of settlement against such banks or card associations.
−Removed: Failure by such organizations or switches to provide the required cooperation could result in our inability to obtain settlement of funds relating to transactions and adversely affect our business.
−Removed: Moreover, international card associations and issuers of their cards (and, in the case of Visa, member banks) have the ability to change or apply their rules in ways that could negatively impact our business.
−Removed: As an example, DCC is not permitted on certain cards in certain geographic territories, and the scope of such restrictions could be extended.
−Removed: Any such change or application of the rules of international card associations could materially and adversely affect our business.
+Added: If consumer confidence in our business or brands declines, our business may be adversely affected.
+Added: Our business relies on customer confidence in our brands and our ability to provide efficient and reliable products and services across each of our segments.
+Added: For our Money Transfer division, a decline in customer confidence in our business or brands, or in traditional money transfer providers as a means to transfer money, may adversely impact transaction volumes which would, in turn, be expected to adversely impact our business and possibly result in recording charges for the impairment of goodwill and/or other long-lived assets.
+Added: CAPITAL MARKETS AND ECONOMIC CONDITIONS
+Added: The outbreak of COVID-19 (coronavirus) has negatively impacted and could continue to negatively impact the global economy.
+Added: In addition, the COVID-19 pandemic could disrupt or otherwise negatively impact global credit markets and our operations, including the demand for our products and services.
+Added: The significant outbreak of COVID-19 has resulted in a widespread health crisis, which has negatively impacted and could continue to negatively impact the global economy.
+Added: In addition, the global and regional impact of the outbreak, including official or unofficial quarantines and governmental restrictions on activities taken in response to such event, has had, and could continue to have a negative impact on our operations, reduced consumer demand for our products and services due to reduced consumer traffic in, or closure of, retail and other locations where our products and services are offered, including voluntary or mandatory temporary closures of our facilities or those of our agents or customers; interruptions in our supply chain, which could impact the cost or availability of equipment; disruptions or restrictions on our ability to travel or to market and distribute our products and services; and labor shortages.
+Added: For example, the COVID-19 pandemic has resulted in travel restrictions within and between countries, including mandatory quarantine requirements for travelers from certain locations, and varying degrees of “sheltering in-place” and other social distancing orders in most of the countries where we do business.
+Added: Among other things, these orders restrict which businesses are allowed to be open and the conditions under which they are allowed to operate.
+Added: Although the majority of these orders went into effect at the end of February 2020 and throughout various times in March 2020, new orders continue to be implemented, or reinstated, as the pandemic spreads around the global and new hot spots flare up.
+Added: These travel restrictions and orders, as well as increased unemployment and general economic uncertainty caused by the pandemic, have negatively impacted our financial results.
+Added: The EFT operating segment has experienced declines in DCC and surcharge transaction volumes as the factors noted above have reduced these high-margin transactions on our network of ATMs.
+Added: For the epay and Money Transfer operating segments, the disruption in business of the retailers and agents that offer our services and products may adversely affect their ability to remain in business and/or timely remit payments owed to us.
+Added: All of these factors, in turn, may not only impact our operations, financial condition and demand for our products and services but our overall ability to react timely to mitigate the impact of this event.
+Added: The COVID-19 outbreak could disrupt or otherwise negatively impact credit markets, which could adversely affect the availability and cost of capital.
+Added: Such impacts could limit our ability to fund our operations and satisfy our obligations.
+Added: The extent and potential impact of the COVID-19 outbreak on our operational and financial performance will depend on future developments, including the duration, severity and spread of the virus, the speed and effectiveness of rollouts for vaccines and treatments, actions that may be taken by governmental authorities and the impact on our supply chain, customers, operations, workforce and the financial markets, all of which are highly uncertain and cannot be predicted.
+Added: These and other potential impacts of an epidemic, pandemic or other health crisis, such as COVID-19, could therefore materially and adversely affect our business, financial condition and results of operations.
+Added: We are subject to business cycles, seasonality and other outside factors that may negatively affect our business.
+Added: A recessionary economic environment in any of our markets or other outside factors could have a negative impact on banks, mobile phone operators, content providers, retailers and our individual customers and could reduce the level of transactions in all of our divisions, which would, in turn, negatively impact our financial results.
+Added: If banks, mobile phone operators and content providers experience decreased demand for their products and services, or if the locations where we provide services decrease in number, we will process fewer transactions, resulting in lower revenues.
+Added: In addition, a recessionary economic environment could reduce the level of transactions taking place on our networks, which will have a negative impact on our business.
+Added: Our experience is that the level of transactions on our networks is also subject to substantial seasonal variation.
+Added: In the EFT Processing Segment, mostly in Europe, we usually experience our heaviest demand for dynamic currency conversion during the third quarter of the fiscal year, coinciding with the tourism season in Europe.
+Added: As a result, our revenues earned in the third quarter of the year will usually be greater than other quarters of the fiscal year.
+Added: Additionally, transaction levels have consistently been higher in the fourth quarter of the fiscal year due to increased use of ATMs, prepaid products and money transfer services during the holiday season.
+Added: Generally, the level of transactions drops in the first quarter, during which transaction levels are generally the lowest we experience during the year, which reduces the level of revenues that we record.
+Added: In the Money Transfer Segment, we experience increased transaction levels during the May through October timeframe, coinciding with certain holidays and the increase in worker migration patterns.
+Added: As a result of these seasonal variations, our quarterly operating results may fluctuate materially and could lead to volatility in the price of our shares.
+Added: Additionally, economic or political instability, wars, civil unrest, terrorism, epidemics (including but not limited to, Coronavirus outbreak) and natural disasters may make money transfers to, from or within a particular country more difficult.
+Added: The inability to timely complete money transfers could adversely affect our business.
+Added: Economic cycles may lead us to recognize impairment charges related to long-lived assets and goodwill recorded in connection with our acquisitions, which would adversely impact our results of operations.
+Added: Our total assets include approximately $787.7 million, or 16% of total assets, in goodwill and acquired intangible assets recorded as a result of acquisitions.
+Added: We assess our goodwill, intangible assets and other long-lived assets as and when required by accounting principles generally accepted in the U.S.
+Added: to determine whether they are impaired.
+Added: For example, during 2020, we incurred goodwill and acquired intangible asset impairment charges of $106.6 million.
+Added: If operating results in any of our key markets, including Australia, Germany, Greece, Malaysia, India, New Zealand, the U.S., U.K., Poland and Romania, deteriorate or our plans do not progress as expected when we acquired these entities, or if capital markets depress our value or that of similar companies, we may be required to record additional impairment write-downs of goodwill, intangible assets or other long-lived assets.
+Added: This could have a material adverse effect on our results of operations and financial condition.
+Added: We have a substantial amount of debt and other contractual commitments, and while the cost of servicing those obligations is not expected to adversely affect our business, the risk could increase if we incur more debt.
+Added: We may be required to prepay our obligations under the credit facility.
+Added: As of December 31, 2020, total liabilities were $3,480.8 million, of which $1,437.6 million represents long-term debt obligations, and total assets were $4,926.7 million.
+Added: We may not have sufficient funds to satisfy all such obligations as a result of a variety of factors, some of which may be beyond our control.
+Added: If the opportunity of a strategic acquisition arises or if we enter into new contracts that require the installation or servicing of infrastructure, such as processing centers, ATM machines or POS terminals on a faster pace than anticipated, we may be required to incur additional debt for these purposes and to fund our working capital needs, including ATM network cash, which we may not be able to obtain.
+Added: The level of our indebtedness could have important consequences to investors, including the following:
+Added: • our ability to obtain any necessary financing in the future for working capital, capital expenditures, debt service requirements or other purposes may be limited or financing may be unavailable;
+Added: • a portion of our cash flows must be dedicated to the payment of principal and interest on our indebtedness and other obligations and will not be available for use in our business;
+Added: • our level of indebtedness could limit our flexibility in planning for, or reacting to, changes in our business and the markets in which we operate;
+Added: • our level of indebtedness will make us more vulnerable to changes in general economic conditions and/or a downturn in our business, thereby making it more difficult for us to satisfy our obligations;
+Added: • because a portion of our debt bears interest at a variable rate of interest, our actual debt service obligations could increase as a result of adverse changes in interest rates.
+Added: If we fail to make required debt payments, or if we fail to comply with other covenants in our debt service agreements, we would be in default under the terms of these agreements.
+Added: This default would permit the holders of the indebtedness to accelerate repayment of this debt and could cause defaults under other indebtedness that we have.
+Added: Restrictive covenants in our credit facilities may adversely affect us.
+Added: Our Credit Facility contains two financial covenants that we must meet as defined in the agreement:
+Added: (1) Consolidated Total Leverage Ratio, and (2) Consolidated Interest Coverage Ratio.
+Added: To remain in compliance with our debt covenants, we may be required to increase Earnings Before Interest, Taxes, Depreciation and Amortization ("EBITDA"), repay debt, or both.
+Added: We cannot assure you that we will have sufficient assets, liquidity or EBITDA to meet or avoid these obligations, which could have an adverse impact on our financial condition.
+Added: Our ability to secure additional financing for growth or to refinance any of our existing debt is also dependent upon the availability of credit in the marketplace, which has experienced severe disruptions in the past.
+Added: If we are unable to secure additional financing or such financing is not available at acceptable terms, we may be unable to secure financing for growth or refinance our debt obligations, if necessary.
+Added: Because we derive our revenues from a multitude of countries with different currencies, our business may be adversely affected by local inflation and foreign currency exchange rates and policies.
+Added: We report our results in U.S.
+Added: dollars, although a majority of our income is realized in foreign currencies.
+Added: As exchange rates among the U.S.
+Added: dollar, the euro, and other currencies fluctuate, the impact of these fluctuations may have a material adverse effect on our results of operations or financial condition as reported in U.S.
+Added: A significant number of our ATMs are located in countries in the European Union that use the euro.
+Added: From time to time, some of these countries, have considered leaving the European Union and adopting another currency.
+Added: If such an event were to occur, the conversion of cash that we hold in banks and in our ATM network in that country from euros to another currency could have an adverse effect on our financial condition or results of operations, either from initial conversion or from subsequent changes in currency exchange rates.
+Added: The magnitude of this risk increases when cash balances in our ATM network increase during the tourism season.
+Added: Our Money Transfer Segment is subject to foreign currency exchange risks because our customers deposit funds in one currency at our retail and agent locations worldwide or in an online account and we typically deliver funds denominated in a different, destination country currency.
+Added: Although we use foreign currency derivative contracts to mitigate a portion of this risk, we cannot eliminate all of the exposure to the impact of changes in foreign currency exchange rates for the period between collection and disbursement of the money transfers .
+Added: CYBER, PHYSICAL ASSET, AND DATA SECURITY
+Added: Our business may be adversely affected if recent developments to applicable data protection regulations in the European Union require us to cease the transfer of personal data from the European Union to the United States.
+Added: In July 2020, the European Court of Justice invalidated the EU-US Privacy Shield as a lawful mechanism for transferring personal data to the US as a result of concerns related to surveillance by law enforcement agencies and a lack of judicial redress by individuals in the EU (known as the “Schrems II” decision).
+Added: Euronet has relied on an alternate mechanism of personal data transfer, called the Standard Contractual Clauses (“SCCs”), since the enforcement of GDPR in 2018.
+Added: In November 2020, the European Data Protection Board issued a series of recommendations regarding supplementary measures to the SCCs, which Euronet is currently implementing.
+Added: Our money transfer business relies on the transfer of personal data of individuals in the EU to the US to enable payment of money remittance transactions to beneficiaries through our correspondent network.
+Added: If we are unable to transfer personal data from the EU to the US or other countries where we operate, then it could affect the manner in which we provide our services and adversely affect our financial results.
Because our business is highly dependent on the proper operation of our computer networks and telecommunications connections, significant technical disruptions to these systems would adversely affect our revenues and financial results.
2 unchanged sentences
There are operational risks inherent in this type of business that can result in the temporary shutdown of part or all of our processing systems, such as failure of electrical supply, failure of computer hardware, security breaches and software errors.
−Removed: Transactions in the EFT Processing Segment are processed through our Budapest, Beijing, Mumbai and Karachi processing centers.
−Removed: Transactions in the epay Segment are processed through our London, Martinsried, Hamburg, Milan, Buena Park, California and Kansas City, Missouri processing centers.
−Removed: Transactions in our Money Transfer Segment are processed through our Buena Park, California, Kansas City, Missouri, Bracknell, Auckland, and Kuala Lumpur processing centers.
−Removed: Any operational problem in these centers may have a significant adverse impact on the operation of our networks.
+Added: Any operational problem in our processing centers may have a significant adverse impact on the operation of our networks.
Even with disaster recovery procedures in place, these risks cannot be eliminated entirely, and any technical failure that prevents operation of our systems for a significant period of time will prevent us from processing transactions during that period of time and will directly and adversely affect our revenues and financial results.
−Removed: We are subject to security breaches of our systems.
+Added: We a re subject to security breaches of our systems.
Any such breach may cause us to incur financial losses, liability, harm to our reputation, litigation, regulatory enforcement actions and limitations on our ability to conduct our businesses.
5 unchanged sentences
Although this technology and methodology decreases security risks, they cannot be eliminated entirely as criminal elements apply increasingly sophisticated technology to attempt to obtain unauthorized access to the information handled by ATM, money transfer and electronic financial transaction networks.
+Added: Our services and infrastructure are increasingly reliant on the Internet.
+Added: Computer networks and the Internet are vulnerable to unauthorized access, computer viruses and other disruptive problems such as denial of service attacks or other cyber-attacks carried out by cyber criminals or state-sponsored actors.
+Added: Other potential attacks include attempts to obtain unauthorized access to confidential information or destroy data, often through the introduction of computer viruses, ransomware or malware, cyber-attacks and other means, which are constantly evolving and difficult to detect.
+Added: Those same parties may also attempt to fraudulently induce employees, customers, vendors, or other users of our systems through phishing schemes or other methods to disclose sensitive information in order to gain access to our data or that of our customers or clients.
In addition, the cost and timeframes required for implementation of new technology may result in a time lag between availability of such technology and our adoption of it.
Further, our controls, procedures and technology may not be able to detect when there is a breach, causing a delay in our ability to mitigate it.
−Removed: As previously disclosed in our SEC filings, we were the subject of computer security breaches, and we cannot exclude the possibility of additional breaches in the future.
+Added: As previously disclosed in our SEC filings, we have been the subject of computer security breaches, and we cannot exclude the possibility of additional breaches in the future.
Any breach in our security systems could result in the perpetration of fraudulent financial transactions for which we may bear the liability.
5 unchanged sentences
Despite these safeguards, there remains a risk that these safeguards could be breached resulting in improper access to, and disclosure of, sensitive customer information.
+Added: Under state, federal and foreign laws requiring consumer notification of security breaches, the costs to remediate security breaches can be substantial.
Breaches of our security policies or applicable legal requirements resulting in a compromise of customer data could expose us to regulatory enforcement action, subject us to litigation, limit our ability to provide money transfer services and/or cause harm to our reputation.
In addition to electronic fraud issues and breaches of our systems, the possible theft and vandalism of ATMs or cash in the ATMs present risks for our ATM business.
−Removed: We install ATMs at high-traffic sites and consequently our ATMs are exposed to theft and vandalism, and to a new form of attack whereby the security of the ATM is breached electronically by transmitting a command to the ATM to dispense cash without a card being present.
+Added: We install ATMs at high-traffic sites and consequently our ATMs are exposed to theft and vandalism, and to attacks whereby the security of the ATM is breached electronically by transmitting a command to the ATM to dispense cash without a card being present.
We constantly monitor ATM security and take measures to protect our systems from such attacks and other breaches, but we cannot be certain that our measures will be effective against new, rapidly developing methods used by criminal elements.
1 unchanged sentence
In addition, we have experienced increases in claims under our insurance, which has increased our insurance premiums.
−Removed: We could incur substantial losses if one of the third party depository institutions we use in our operations were to fail.
−Removed: As part of our business operations, we maintain cash balances at third party depository institutions.
−Removed: We could incur substantial losses if a financial institution in which we have significant deposits fails.
−Removed: We are required under certain national laws and the rules of financial transaction switching networks in many of our markets to have ''sponsors'' to operate ATMs and switch ATM transactions.
−Removed: Our failure to secure ''sponsor'' arrangements in any of our markets that require bank sponsors could prevent us from doing business in that market.
−Removed: Under the laws of some countries, only a licensed financial institution may operate ATMs.
−Removed: Because we are not a licensed financial institution outside of the E.U.
−Removed: we are required to have a ''sponsor'' bank to conduct ATM operations in those countries.
−Removed: In addition, in all of our non-E.U.
−Removed: markets, the rules governing national transaction switching networks owned or operated by banks, and other international financial transaction switching networks operated by organizations such as Citibank, Visa and Mastercard, require any company sending transactions through these switches to be a bank or a technical service processor that is approved and monitored by a bank.
−Removed: As a result, the operation of our ATM network in many of our markets depends on our ability to secure these ''sponsor'' arrangements with financial institutions.
−Removed: To date, we have been successful in reaching contractual arrangements that have permitted us to operate in all of our target markets.
−Removed: However, we cannot assure you that we will continue to be successful in reaching these arrangements, and it is possible that our current arrangements will not continue to be renewed.
−Removed: If we are unable to secure “sponsor” arrangements in any market, we could be prevented from doing business in that market.
−Removed: We rely on third party financial institutions to provide us with a portion of the cash required to operate our ATM networks in certain countries.
−Removed: If these institutions were unable or unwilling to provide us with the cash necessary to operate our ATM networks, we would be required to locate additional alternative sources of cash to operate these networks.
−Removed: In our EFT Processing Segment, we primarily rely on third party financial institutions in certain countries in Europe and Asia Pacific to provide us with the cash required to operate our ATM networks.
−Removed: Under our agreements with these providers, we pay fees or interest, which is generally variable and could increase, based on the total amount of cash we are using from such provider at a given time, as well as other costs such as bank fees and cash transportation costs.
−Removed: As of December 31, 2019 , the amount of cash used in our ATM networks under these supply agreements was approximately $489 million .
−Removed: Before the cash is disbursed to ATM customers, beneficial ownership of the cash is generally retained by the cash providers, and we have no access or proprietary rights to the cash.
−Removed: Our existing agreements with cash providers are generally multi-year agreements that expire at various times.
−Removed: However, each provider may have the right to demand the return of all or any portion of its cash at any time upon the occurrence of certain events beyond our control, including certain bankruptcy events affecting us or our subsidiaries, or a breach of the terms of our cash provider agreements.
−Removed: If any of our cash supply providers were to demand return of their cash or terminate their agreements with us and remove their cash from our ATM devices, or if they fail to provide us with the cash our operations require, our ability to operate the ATM networks to which the provider supplies cash would be jeopardized, and we would need to locate additional alternative sources of cash, including, potentially the increased use of our own cash.
−Removed: Under those circumstances, the terms and conditions of the new or renewed agreements could potentially be less favorable to us, which would negatively impact our results of operations.
−Removed: Furthermore, restrictions on our access to cash to supply our ATMs could severely restrict our ability to keep our ATMs operating, which could subject us to performance penalties under our contracts with our customers.
−Removed: We have encountered difficulty in obtaining cash supply arrangements in certain of our markets, including Greece, and directly provide cash for our ATM transactions in those markets.
−Removed: While the amounts involved are currently well within our capabilities given our cash flows and available financing, any failure to renew a major cash supply arrangement could require that we commit significant financial resources to the supply of cash to our ATM networks, which could adversely impact our results of operations.
+Added: Failures of third-party service providers we rely upon could lead to financial loss.
+Added: We rely on third party service providers to support key portions of our operations.
+Added: We also rely on third party service providers to provide part or all of certain services we deliver to customers.
+Added: While we have selected these third-party vendors carefully, we do not control their actions.
+Added: A failure of these services by a third party could have a material impact upon our delivery of services to customers.
+Added: Such a failure could lead to damage claims, loss of customers, and reputational harm, depending on the duration and severity of the failure.
+Added: Third parties perform significant operational services on our behalf.
+Added: These third-party vendors are subject to similar risks as us relating to cybersecurity, breakdowns or failures of their own systems or employees.
+Added: One or more of our vendors may experience a cybersecurity event or operational disruption and, if any such event does occur, it may not be adequately addressed, either operationally or financially, by the third-party vendor.
+Added: Certain of our vendors may have limited indemnification obligations or may not have the financial capacity to satisfy their indemnification obligations.
+Added: If a critical vendor is unable to meet our needs in a timely manner or if the services or products provided by such a vendor are terminated or otherwise delayed and if we are not able to develop alternative sources for these services and products quickly and cost-effectively, our customers could be negatively impacted and it could have a material adverse effect on our business.
+Added: COMPETITIVE LANDSCAPE
+Added: Our competition in the EFT Processing Segment, epay Segment and Money Transfer Segment includes large, well-financed companies and financial institutions larger than us with earlier entry into the market.
+Added: As a result, we may lack the financial resources and access to capital needed to capture increased market share.
+Added: EFT Processing Segment - Our principal EFT Processing competitors include ATM networks owned by banks and national switches consisting of consortiums of local banks that provide outsourcing and transaction services only to banks and independent ATM deployers in that country.
+Added: Large, well-financed companies offer ATM network and outsourcing services that compete with us in various markets.
+Added: In some cases, these companies also sell a broader range of card and processing services than we do, and are, in some cases, willing to discount ATM services to obtain large contracts covering a broad range of services.
+Added: Competitive factors in our EFT Processing Segment include network availability and response time, breadth of service offering, price to both the bank and to its customers, ATM location and access to other networks.
+Added: epay Segment - We face competition in the epay business in all of our markets.
+Added: A few multinational companies operate in several of our markets, and we therefore compete with them in a number of countries.
+Added: In other markets, our competition is from smaller, local companies.
+Added: Major retailers with high volumes are in a position to demand a larger share of commissions or to negotiate directly with the mobile phone operators, which may compress our margins.
+Added: Additionally, certain of our content providers, including mobile phone operators have entered into direct contracts with retailers and/or have developed processing technology that diminishes or eliminates the need for intermediate processors and distributors.
+Added: Money Transfer Segment - Our primary competitors in the money transfer and bill payment business include other large money transfer companies and electronic money transmitters, as well as certain major national and regional banks, financial institutions and independent sales organizations.
+Added: Our competitors include The Western Union Company and MoneyGram International Inc.
+Added: The Western Union Company has a significant competitive advantage due to its greater resources and access to capital for expansion.
+Added: This may allow them to offer better pricing terms to customers, which may result in a loss of our current or potential customers or could force us to lower our prices.
+Added: Either of these actions could have an adverse impact on our revenues.
+Added: In addition, our competitors may have the ability to devote more financial and operational resources than we can to the development of new technologies that provide improved functionality and features to their product and service offerings.
+Added: If successful, their development efforts could render our product and service offerings less desirable, resulting in the loss of customers or a reduction in the price we could demand for our services.
+Added: In addition to traditional money payment services, new technologies are emerging that may effectively compete with traditional money payment services, such as stored-value cards, debit networks, web-based services and digital currencies.
+Added: Our continued growth depends upon our ability to compete effectively with these alternative technologies.
+Added: Developments in payments could materially reduce our transaction levels and revenues.
+Added: Certain developments in the field of payments may reduce the need for ATMs, prepaid product POS terminals and money transfer agents.
+Added: An example of this type of development is the use of near field technology in retail transactions, which if widely accepted in a market reduces the need for cash and can negatively impact the level of ATM transactions in that market.
+Added: Advances in biometric payment solutions could have similar adverse impacts.
+Added: These developments may reduce the transaction levels that we experience on our networks in the markets where they occur.
+Added: Financial institutions, retailers and agents could elect to increase fees to their customers for using our services, which may cause a decline in the use of our services and have an adverse effect on our revenues.
+Added: If transaction levels over our existing network of ATMs, POS terminals, agents and other distribution methods do not increase, growth in our revenues will depend primarily on increased capital investment for new sites and developing new markets, which reduces the margin we realize from our revenues.
+Added: The mobile phone industry is a rapidly evolving area, in which technological developments, in particular the development of new billing models (such as "all you can eat" plans) and distribution methods or services, may affect the demand for other services in a dramatic way.
+Added: The development of any new models or technology that reduce the need or demand for prepaid mobile airtime could materially and adversely affect our business.
Competition in our EFT Processing Segment has increased over the last several years, increasing the risk that certain of our long-term bank outsourcing contracts may be terminated or not renewed upon expiration.
5 unchanged sentences
Although we have historically considered the risk of non-renewal of major contracts to be relatively low because of complex interfaces and operational procedures established for those contracts, the risk of non-renewal or early termination is increasing.
−Removed: Our operating results in the money transfer business may be harmed if there are adverse changes in worker immigration patterns, our ability to expand our share of the existing electronic market and to expand into new markets and our ability to continue complying with regulations issued by the OFAC, BSA, FINCEN, USA PATRIOT Act regulations, the Dodd-Frank Act or any other existing or future regulations that impact any aspect of our money transfer business.
−Removed: Our money transfer business primarily focuses on workers who migrate to foreign countries in search of employment and then send a portion of their earnings to family members in their home countries.
−Removed: Changes in U.S.
−Removed: and foreign government policies or enforcement, including changes that have been, or may be, implemented by the U.S.
−Removed: President or Congress, toward immigration may have a negative effect on immigration in the U.S.
−Removed: and other countries, which could also have an adverse impact on our money transfer revenues.
−Removed: and foreign regulators have become increasingly aggressive in the enforcement of the various regulatory regimes applicable to our businesses and the imposition of fines and penalties in the event of violations.
−Removed: Our ability to continue
−Removed: complying with the requirements of OFAC, BSA, FINCEN, the USA PATRIOT Act, the Dodd-Frank Act and other regulations (both U.S.
−Removed: and foreign) is important to our success in achieving growth and an inability to do this could have an adverse impact on our revenues and earnings.
−Removed: Anti-money laundering and consumer protection regulations require us to be responsible for the compliance by agents with such regulations.
−Removed: Although we have training and compliance programs in place, we cannot be certain our agents will comply with such regulations and we may be held responsible for their failure to comply, resulting in fines and penalties.
−Removed: Future growth and profitability depend upon expansion within the markets in which we currently operate and the development of new markets for our money transfer services.
−Removed: Our expansion into new markets is dependent upon our ability to successfully apply our existing technology or to develop new applications to satisfy market demand.
−Removed: We may not have adequate financial and technological resources to expand our distribution channels and product applications to satisfy these demands, which may have an adverse impact on our ability to achieve expected growth in revenues and earnings.
−Removed: Changes in state, federal or foreign laws, rules and regulations could impact the money transfer industry, making it more difficult for our customers to initiate money transfers which would harm our money transfer business.
−Removed: Our money transfer services are subject to regulation by the U.S.
−Removed: states in which we operate, by the U.S.
−Removed: federal government and the governments of the other countries in which we operate.
−Removed: Changes in the laws, rules and regulations of these governmental entities, and our ability to obtain or retain required licensure, could have a material adverse impact on our results of operations, financial condition and cash flow.
−Removed: Changes in banking industry regulation and practice could make it more difficult for us and our agents to maintain depository accounts with banks, which would harm our business.
−Removed: The banking industry, in light of increased regulatory oversight, is continually examining its business relationships with companies that offer money transfer services and with retail agents that collect and remit cash collected from end consumers.
−Removed: Certain major national and international banks have already withdrawn from providing service to money services businesses.
−Removed: Should our own banks decide to not offer depository services to companies engaged in processing money transfer transactions, or to retail agents that collect and remit cash from end customers, our ability to complete money transfers, and to administer and collect fees from money transfer transactions, could be adversely impacted.
−Removed: If we are unable to maintain our money transfer agent and correspondent networks, our business may be adversely affected.
−Removed: Our consumer-to-consumer money transfer based revenues are primarily generated through the use of our agent and correspondent networks.
−Removed: If agents or correspondents decide to leave our network or if we are unable to sign new agents or correspondents, our revenue and profit growth rates may be adversely affected.
−Removed: Our agents and correspondents are also subject to a wide variety of laws and regulations that vary significantly, depending on the legal jurisdiction.
−Removed: Changes in these laws and regulations could adversely affect our ability to maintain the networks or the cost of providing money transfer services.
−Removed: In addition, agents may generate fewer transactions or less revenue due to various factors, including increased competition.
−Removed: Because our agents and correspondents are third parties that may sell products and provide services in addition to our money transfer services, they may encounter business difficulties unrelated to the provision of our services, which may cause the agents or correspondents to reduce their number of locations or hours of operation, or cease doing business altogether.
−Removed: If consumer confidence in our money transfer business or brands declines, our business may be adversely affected.
−Removed: Our money transfer business relies on customer confidence in our brands and our ability to provide efficient and reliable money transfer services.
−Removed: A decline in customer confidence in our business or brands, or in traditional money transfer providers as a means to transfer money, may adversely impact transaction volumes which would, in turn, be expected to adversely impact our business and possibly result in recording charges for the impairment of goodwill and/or other long-lived assets.
−Removed: Our money transfer service offerings are dependent on financial institutions to provide such offerings, and any adverse change in such offerings would harm our money transfer business.
−Removed: Our money transfer business involves transferring funds internationally and is dependent upon foreign and domestic financial institutions, including our competitors, to execute funds transfers and foreign currency transactions.
−Removed: Changes to existing regulations of financial institution operations, such as those designed to combat terrorism or money laundering, could require us to alter our operating procedures in a manner that increases our cost of doing business or to terminate certain product offerings.
−Removed: In addition, as a result of existing regulations and/or changes to those regulations, financial institutions could decide to cease providing the services on which we depend, requiring us to terminate certain product offerings.
−Removed: The Dodd-Frank Act could have an adverse effect on our ability to hedge risks associated with our business.
−Removed: The Dodd-Frank Act established federal oversight and regulation of the over-the-counter derivatives market and entities that participate in that market.
−Removed: The act requires the U.S.
−Removed: Commodity Futures Trade Commission ("CFTC") to institute broad new position limits for futures and options traded on regulated exchanges.
−Removed: As the law favors exchange trading and clearing, the Dodd-Frank Act also may require us to move certain derivatives transactions to exchanges where no trade credit is provided and also comply with margin requirements in connection with our derivatives activities that are not exchange traded, although the application of those provisions to us is uncertain at this time.
−Removed: The Dodd-Frank Act also requires many counterparties to our derivatives instruments to spin off some of their derivatives activities to a separate entity, which may not be as creditworthy as the current counterparty, or cause the entity to comply with the capital requirements, which could result in increased costs to counterparties such as us.
−Removed: The Dodd-Frank Act and any new regulations could (i) significantly increase the cost of derivative contracts (including requirements to post collateral, which could adversely affect our available liquidity);
−Removed: (ii) reduce the availability of derivatives to protect against risks we encounter;
−Removed: and (iii) reduce the liquidity of foreign currency related derivatives.
−Removed: If we reduce our use of derivatives as a result of the legislation and regulations, our results of operations may become more volatile and our cash flows may be less predictable, which could adversely affect our ability to plan for and fund capital expenditures and working capital.
−Removed: Increased volatility may make us less attractive to certain types of investors.
−Removed: Any of these consequences could have a material adverse effect on our financial condition and results of operations.
−Removed: The United Kingdom's departure from the European Union could adversely affect us.
−Removed: On June 23, 2016, the U.K.
−Removed: held a referendum in which voters approved an exit from the E.U., commonly referred to as Brexit.
−Removed: The Brexit withdrawal agreement (officially:
−Removed: Agreement on the withdrawal of the United Kingdom of Great Britain and Northern Ireland from the European Union and the European Atomic Energy Community) is a treaty between the European Union (EU), the European Atomic Energy Community ("Euratom"), and the United Kingdom (UK), signed on 24 January 2020, setting the terms of the withdrawal of the latter from the former two (Brexit).
−Removed: The withdrawal agreement provides for a transition period until December 31, 2020, during which the U.K.
−Removed: remains in the single market, in order to ensure frictionless trade until a long-term relationship is agreed.
−Removed: However, as of February 2020, the withdrawal of the U.K.
−Removed: and Northern Ireland from the E.U.
−Removed: remains subject of negotiations yet to come.
−Removed: If no such agreement is reached by that date and the transition period is not extended, a no-deal Brexit would remain the default outcome in 2021.
−Removed: Although it remains unknown what the final terms will be, it is likely that there will be greater restrictions on the terms of trade and immigration between the U.K.
−Removed: countries, and increased regulatory complexities.
−Removed: xe adjusted operating income decreased compared to 2018 primarily due to lower revenues due to Brexit uncertainty.
−Removed: Our EFT Processing Segment and our Money Transfer Segment operate subsidiaries that are licensed in the U.K.
−Removed: as payment institutions and as an e-money institution and have passported their licenses under the PSD2 and 2EMD, respectively, across the Member States.
−Removed: When the U.K.
−Removed: leaves the E.U.
−Removed: single market without an agreement or without an agreement to continue passporting rights, then U.K.
−Removed: payment and/or e-money institutions may lose their rights to continue providing services in the E.U.
−Removed: after December 31, 2020.
−Removed: These measures could potentially disrupt the markets we serve and cause us to use one of our other E.U.
−Removed: licenses or obtain new licenses in another E.U.
−Removed: member state to continue operating in the markets throughout the E.U.
−Removed: If we are unable to shift business to one of our other E.U.
−Removed: licenses or obtain additional licenses by the date that the U.K.
−Removed: leaves the E.U., then we may have a disruption to the services that we provide in the E.U.
−Removed: under our U.K.
−Removed: Any disruption of our business following Brexit could have a material adverse effect on our business or financial results.
−Removed: The COVID-19 pandemic could adversely affect us.
−Removed: Our business is sensitive to the willingness of our customers to travel.
−Removed: A pandemic could cause disruptions in air and other forms of travel.
−Removed: As of the date of this filing, the COVID-19 (coronavirus) outbreak has resulted in several countries issuing travel warnings, although it has largely been concentrated in China, where the Company has a small presence.
−Removed: Our business is diversified across our segments and management does not believe that the disruptions would have a material adverse effect on our business, financial condition or results of operations.
−Removed: The extent to which our results are affected by the virus will largely depend on future developments which cannot be accurately predicted and are uncertain.
−Removed: This includes new information which may emerge concerning the severity of the virus and attempts to contain or treat the impact.
+Added: GOVERNANCE MATTERS
+Added: We have various mechanisms in place to discourage takeover attempts, which may reduce or eliminate our stockholders' ability to sell their shares for a premium in a change of control transaction.
+Added: Various provisions of our certificate of incorporation and bylaws and of Delaware corporate law may discourage, delay or prevent a change in control or takeover attempt of our company by a third party which our management and board of directors opposes.
+Added: Public stockholders who might desire to participate in such a transaction may not have the opportunity to do so.
+Added: These anti-takeover provisions could substantially impede the ability of public stockholders to benefit from a change of control or change in our management and board of directors.
+Added: These provisions include:
+Added: preferred stock that could be issued by our board of directors to make it more difficult for a third party to acquire, or to discourage a third party from acquiring, a majority of our outstanding voting stock;
+Added: classification of our directors into three classes with respect to the time for which they hold office;
+Added: supermajority voting requirements to amend the provision in our certificate of incorporation providing for the classification of our directors into three such classes;
+Added: non-cumulative voting for directors;
+Added: control by our board of directors of the size of our board of directors;
+Added: limitations on the ability of stockholders to call special meetings of stockholders;
+Added: advance notice requirements for nominations of candidates for election to our board of directors or for proposing matters that can be acted upon by our stockholders at stockholder meetings;
+Added: an exclusive forum bylaw provision for all internal corporate claims.
+Added: Additionally, we are authorized to issue up to a total of 90 million shares of common stock, potentially diluting equity ownership of current holders and the share price of our common stock.
+Added: We believe that it is necessary to maintain a sufficient number of available authorized shares of our common stock in order to provide us with the flexibility to issue common stock for business purposes that may arise as deemed advisable by our Board.
+Added: These purposes could include, among other things, (i) to declare future stock dividends or stock splits, which may increase the liquidity of our shares;
+Added: (ii) the sale of stock to obtain additional capital or to acquire other companies or businesses, which could enhance our growth strategy or allow us to reduce debt if needed;
+Added: (iii) use in additional stock incentive programs and (iv) other bona fide purposes.
+Added: Our Board of Directors may issue the available authorized shares of common stock without notice to, or further action by, our stockholders, unless stockholder approval is required by law or the rules of the NASDAQ Global Select Market.
+Added: The issuance of additional shares of common stock may significantly dilute the equity ownership of the current holders of our common stock.
+Added: Further, over the course of time, all of the issued shares have the potential to be publicly traded, perhaps in large blocks.
+Added: This may result in dilution of the market price of the common stock.
+Added: An additional 8.1 million shares of common stock, representing approximately 15% of the shares outstanding as of December 31, 2020, could be added to our total common stock outstanding through the exercise of options or the issuance of additional shares of our common stock pursuant to existing convertible debt and other agreements.
+Added: Once issued, these shares of common stock could be traded into the market and result in a decrease in the market price of our common stock.
+Added: As of December 31, 2020, we had 4.1 million and 0.5 million options and restricted stock awards outstanding, respectively, held by our directors, officers and employees, which entitle these holders to acquire an equal number of shares of our common stock.
+Added: Of this amount, 1.5 million options are vested and exercisable as of December 31, 2020.
+Added: Approximately 0.7 million additional shares of our common stock may be issued in connection with our stock incentive and employee stock purchase plans.
+Added: Accordingly, based on current trading prices of our common stock, approximately 2.0 million shares could potentially be added to our total current common stock outstanding through the exercise of options and the vesting of restricted stock awards, which could adversely impact the trading price for our stock.
+Added: Of the 4.6 million total options and restricted stock awards outstanding, an aggregate of 2.0 million options and restricted stock awards are held by persons who may be deemed to be our affiliates and who would be subject to Rule 144.
+Added: Thus, upon exercise of their options or sale of shares for which restrictions have lapsed, these affiliates' shares would be subject to the trading restrictions imposed by Rule 144.
+Added: The remainder of the common shares issuable under option and restricted stock award arrangements would be freely tradable in the public market.
+Added: Over the course of time, all of the issued shares have the potential to be publicly traded, perhaps in large blocks.
+Added: Upon the occurrence of certain events, another 2.8 million shares of common stock could be issued upon conversion of the Company's convertible notes issued in March 2019;
+Added: in certain situations, the number of shares issuable could be higher.
+Added: While we have stated that we intend to settle any conversion of these notes by issuing cash for the principal value of the notes and issuing shares of common stock for the conversion value in excess of the principal, which would significantly reduce the number of shares issued upon conversion, if our financial condition significantly and adversely changes, we may not be able to settle as intended should the notes be converted.
+Added: KEY PERSONNEL
+Added: Retaining the founder and key executives of our company, and of companies that we acquire, and finding and retaining qualified personnel is important to our continued success, and any inability to attract and retain such personnel could harm our operations.
+Added: The development and implementation of our strategy has depended in large part on the co-founder of our company, Michael J.
+Added: The retention of Mr.
+Added: Brown is important to our continued success.
+Added: In addition, the success of the expansion of businesses that we acquire may depend in large part upon the retention of the founders or leaders of those businesses.
+Added: Our success also depends in part on our ability to hire and retain highly skilled and qualified management, operating, marketing, financial and technical personnel.
+Added: The competition for qualified personnel in the markets where we conduct our business is intense and, accordingly, we cannot assure you that we will be able to continue to hire or retain the required personnel.
+Added: Our officers and some of our key personnel have entered into service or employment agreements containing non-competition, non-disclosure and non-solicitation covenants, which grant incentive stock options and/or restricted stock with long-term vesting requirements.
+Added: However, most of these contracts do not guarantee that these individuals will continue their employment with us.
+Added: The loss of our key personnel could have a material adverse effect on our business, growth, financial condition or results of operations.
Unresolved Staff Comments
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.