What changed in this filing

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Item 1A. Risk Factors

2024-05-09 compared with 2024-02-08 · 33 added, 17 removed, 428 unchanged (10% of the section changed)

37 unchanged sentences

In the future, we may have to record additional reserves or write-offs, or defer revenue on sales transactions, which could negatively impact our financial results.

Our SaaS only business model is subject to certain risks.

Our business is highly dependent on our ability to continue to expand our SaaS business and cloud operations, including keeping pace with the market transition to SaaS solutions.

While we continue to drive new SaaS sales, at the same time we are working to migrate our remaining perpetual license clients to SaaS.

The expansion of our SaaS business and operations increases our reliance on our channel partners to grow our business.

If our channel partners choose to place greater emphasis on products of their own or those offered by our competitors, do not effectively market and sell our solutions, or fail to meet the needs of our customers, then our ability to grow our SaaS business and sell our SaaS solutions may be adversely affected.

Our SaaS transition and the terms, and timing of transactions in a given period can have a significant impact on our financial results in that period.

As our SaaS revenue continues to grow, we expect a greater amount of our revenue to be recognized over longer periods, in some cases several years, as compared to the way revenue is recognized for perpetual licenses.

This change in the pattern of recognition also means that increases or decreases in SaaS subscription activity impact the amount of revenue recognized in both current and future periods.

The duration of the term of new or renewal SaaS contracts can have a significant impact on our results in a given period.

As our SaaS transition continues and accelerates, our subscription renewal rates have and will become more important to our financial results.

If customers choose not to renew, or reduce, their subscriptions, our operating results and financial results will suffer.

The deferral or loss of one or more significant orders can also materially adversely affect our operating results, especially in a given quarter.

As with other software-focused companies, a large amount of our quarterly business tends to come in the last few weeks, or even the last few days, of each quarter.

This trend complicates the process of accurately predicting revenue and other operating results, particularly on a quarterly basis.

In addition, our business is subject to seasonal factors that may also cause our results to fluctuate from quarter to quarter.

If we are unable to properly manage our SaaS transition, or if the transition does not progress as expected, our business may suffer.

We cannot accurately predict subscription renewal rates and the impact these rates may have on our future revenue and operating results.

49 unchanged sentences

We believe that our future success depends in part upon our ability to develop, maintain and expand strategic, long-term and profitable partnerships and reseller relationships.

If we are unable to do so for any reason, including as a result of any change in the leadership of our distribution partners, or if any existing or future distribution partners fail to successfully market, resell, implement or support our products for their customers, or if distribution partners represent multiple providers and devote greater resources to market, resell, implement and support competing products and services, our future revenue growth could be impeded.

greater resources to market, resell, implement and support competing products and services, our future revenue growth could be impeded.

We sometimes rely on distribution partners to recommend our products to their customers.

19 unchanged sentences

These risks in turn could cause our operating results and financial condition to suffer.

We derived 21% and 23% of our revenue from EMEA sales during the three and six months ended December 31, 2023 respectively, consistent with the three and six months ended December 31, 2022.

We derived 22% and 21% of our revenue from EMEA sales during the three and nine months ended March 31, 2024 respectively, which is consistent with the three and nine months ended March 31, 2023.

In addition to those discussed elsewhere in this section, our EMEA sales operations are subject to a number of specific risks, such as:

6 unchanged sentences

● various trade restrictions and tax consequences;

● hostilities in various parts of the world, including the war in Ukraine;

● hostilities in various parts of the world, including the war in Ukraine and the conflict in the Middle East;

● reduced intellectual property protections in some countries.

Any of the above risks could adversely affect our international operations, reduce our revenue from customers outside of the United States or increase our operating costs, each of which could adversely affect our business, results of operations, financial condition, and growth prospects.

As of December 31, 2023 approximately 46% of our workforce was employed in India.

Of our employees in India, 51% are allocated to research and development.

As of March 31, 2024, approximately 46% of our workforce was employed in India.

Of our employees in India, approximately 50% are allocated to research and development.

Although the movement of certain operations internationally was principally motivated by cost cutting, the continued management of these remote operations requires significant management attention and financial resources that could adversely affect our operating performance.

26 unchanged sentences

If a customer opts not to pay for premium disaster recovery, we will only assure that their data is available within 72 hours.

This delay could cause severe disruptions to our customers’ customers and may result in customer termination of our solutions.

This delay could cause severe disruptions to our customers’

customers and may result in customer termination of our solutions.

Our premium disaster recovery service provides for an alternative data center and a return to operations within one business day.

46 unchanged sentences

We anticipate that we will continue to rely on such third-party software in the future.

Although we believe that there are commercially reasonable alternatives to the third-party software we currently license, this may not always be the case, or it may be difficult or costly to replace such software.

Although we believe that there are commercially reasonable alternatives

to the third-party software we currently license, this may not always be the case, or it may be difficult or costly to replace such software.

In addition, integration of the software used in our platform with new third-party software may require significant work and require substantial investment of our time and resources.

57 unchanged sentences

Our technology platforms enable representatives of our customers as well as individual service providers to communicate with consumers and other persons seeking information or advice on the Internet.

The law relating to the liability of online

platform providers such as us for the activities of users of their online platforms is often challenged in the U.S.

The law relating to the liability of online platform providers such as us for the activities of users of their online platforms is often challenged in the U.S.

and internationally.

133 unchanged sentences

Intellectual property ownership and license rights, including copyright, surrounding AI technologies has not been fully addressed by federal or state laws or by U.S.

courts, and the manner in which we configure and use AI technologies may expose us to

claims of copyright infringement or other intellectual property misappropriation.

courts, and the manner in which we configure and use AI technologies may expose us to claims of copyright infringement or other intellectual property misappropriation.

It is possible that new laws and regulations will be adopted in the United States and in other countries, or that existing laws and regulations will be interpreted in ways that would affect the operation of our products and services and the way in which we use AI.

13 unchanged sentences

● our results of operations are subject to fluctuations in foreign currency exchange rates, which risks may be heightened due to increased volatility of foreign currency exchange rates as a result of a pandemic or public health emergency.

Further, our forecasted revenue, operating results and cash flows could vary materially from those we provide as guidance or from those anticipated by investors and analysts if the assumptions on which we base our financial projections are inaccurate as a result of the unpredictability of the impact that a pandemic or public health emergency will have on our businesses, our customers’ and partners’ businesses and the global markets and economy or we make changes to our licensing programs or payment terms in connection with a pandemic or public health emergency.

health emergency will have on our businesses, our customers’ and partners’ businesses and the global markets and economy or we make changes to our licensing programs or payment terms in connection with a pandemic or public health emergency.

We cannot reasonably predict the ultimate impact of any pandemic or public health emergency, including the extent of any adverse impact on our business, results of operations and financial condition, which will depend on, among other things, the duration and spread of the pandemic or public health emergency, the impact of governmental regulations that have been, and may continue to be, imposed in response, the effectiveness of actions taken to contain or mitigate the outbreak, the availability, safety and efficacy of vaccines, including against emerging variants of the infectious disease, and global economic conditions.

Additionally, disruptions have in the past made it more challenging to compare our performance,

including our revenue growth and overall profitability, across quarters and fiscal years, and could have this effect in the future.

Additionally, disruptions have in the past made it more challenging to compare our performance, including our revenue growth and overall profitability, across quarters and fiscal years, and could have this effect in the future.

To the extent a pandemic or public health emergency adversely affects our business, results of operations, financial conditions, and cash flows, it may also heighten many of the other risks described in this “Risk Factors” section.

19 unchanged sentences

Our insiders who are significant stockholders have the ability to exercise significant control over matters requiring stockholder approval, including the election of our board of directors, and may have interests that conflict with those of other stockholders.

Our directors and executive officers, together with their affiliates and members of their immediate families, beneficially owned, in the aggregate, approximately 32% of our outstanding capital stock as of December 31, 2023, of which our Chief Executive Officer, Ashutosh Roy, beneficially owned approximately 28% as of such date.

Our directors and executive officers, together with their affiliates and members of their immediate families, beneficially owned, in the aggregate, approximately 33% of our outstanding capital stock as of March 31, 2024, of which our Chief Executive Officer, Ashutosh Roy, beneficially owned approximately 29% as of such date.

As a result of these concentrated holdings, Mr.

Roy individually or together with this group has the ability to exercise significant control over most matters

requiring our stockholders’ approval, including the election and removal of directors and the approval of significant corporate transactions, such as a merger or sale of our company or its assets.

Roy individually or together with this group has the ability to exercise significant control over most matters requiring our stockholders’ approval, including the election and removal of directors and the approval of significant corporate transactions, such as a merger or sale of our company or its assets.

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

What changed 10-Q

Item 1A. Risk Factors