What changed in this filing

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Item 1A. Risk Factors

2024-09-12 compared with 2023-09-13 · 139 added, 135 removed, 440 unchanged (38% of the section changed)

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If one or more of these risks or uncertainties materialize, it may adversely and materially affect our business, results of operation, reputation, prospects, financial condition and operating results, cash flows, profitability, liquidity, stock price, and financial condition.

We cannot identify or predict all risks that we face.

We may be similarly affected by additional risks and uncertainties that are not presently known or are currently deemed immaterial, if they occur.

We encourage you to review the following risks, noting that they do not reflect a complete statement of all potential risks or uncertainties we may face.

The risks described below are not the only risks that our business faces.

Additional risks not presently known to us or that we currently deem immaterial may also harm our business, results of operations, or financial condition.

Business Risks

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Moreover, although our objective is to sign multi-year agreements, our contracts generally allow the client to terminate the contract for convenience or reduce their use of our solutions.

There can be no assurance that our clients will not terminate their contracts before their scheduled expiration dates, that the volume of services for these programs will not be reduced, or that we will be able to avoid penalties or earn performance bonuses for our solutions.

We also may be unable to terminate unprofitable contracts without incurring significant liabilities.

For example, in the past, we have had clients terminate their contract for convenience and /or reduce their use of our services due to reasons out of our control, and there can be no assurance that in the future our clients will not terminate their contracts before their scheduled expiration dates, that the volume of services for these programs will not be reduced, or that we will be able to avoid penalties or earn performance bonuses for our solutions.

There have also been certain unprofitable client contracts that we were not able to terminate quickly without incurring penalties, and in the future unprofitable contracts may negatively impact us.

Solutions Pricing

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In addition, we are obligated under some of our contracts to deliver productivity benefits to our clients, such as reduction in handle time or speed to answer.

The prices we are able to charge for our solutions are affected by a number of factors, including our clients’ perceptions of our ability to add value through our solutions, competition, introduction of new services or products by us or our competitors, our ability to accurately estimate, attain and sustain revenues from client

engagements, wage inflation rates, unhedged currency exchange rates, our costs, margins and cash flows over increasingly longer contract periods and general economic and political conditions.

The prices we are able to charge for our solutions are affected by a number of factors, including our clients’ perceptions of our ability to add value through our solutions, our competitive position, introduction of new

services or products by us or our competitors, our ability to accurately estimate, attain and sustain revenues from client engagements, wage inflation rates, unhedged currency exchange rates, our costs, margins and cash flows over increasingly longer contract periods and general economic and political conditions.

Controlling Costs

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We also may not be successful in our attempt to control costs associated with salaries and benefits as we continue to add capacity in locations where we consider wage levels of skilled personnel to be satisfactory.

Our business depends on maintaining large numbers of agents to service our clients’ business needs, and we tend not to terminate agents on short notice to respond to temporary declines in demand in excess of agreed levels, as rehiring and retraining agents at a later date would force us to incur additional expenses, and any termination of our employees would also involve the incurrence of significant additional costs in the form of severance payments to comply with labor regulations in the various jurisdictions in which we operate our business.

Our business depends on maintaining large numbers of agents to service our clients’ business needs, and we tend not to terminate agents on short notice to respond to temporary declines in demand in excess of agreed levels, as rehiring and retraining agents at a later date would force us to incur additional expenses, and any termination of our employees would also involve significant additional costs in the form of severance payments to comply with labor regulations in the various jurisdictions in which we operate our business.

Additionally, the hiring and training of our agents in response to increased demand takes time and results in additional short-term expenses.

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In addition, in connection with our service contracts, certain representations are made, including representations relating to the quality and experience of our personnel.

A failure or inability to meet these requirements or a breach of such representations could result in a claim for damages against us and seriously damage our reputation and affect our ability to attract new business.

A failure or inability to meet these requirements or a breach of such representations could result in a claim for substantial damages against us and seriously damage our reputation and affect our ability to attract new business.

The consolidation of our clients or potential clients may adversely affect us.

Consolidation of the potential users of our solutions, particularly those in the telecommunications, technology and cable industries, may decrease the number of clients who contract our solutions.

Consolidation of the potential users of our solutions may decrease the number of clients who contract our solutions.

Any significant reduction in or elimination of the use of the solutions we provide as a result of consolidation would result in reduced revenue to us and could harm our business.

Such consolidation may encourage clients to apply increasing pressure on us to lower the prices we charge for our solutions.

Our clients may decide to enter into or further expand insourcing activities in the future, and current trends toward outsourcing services and/or outsourcing activities may reverse.

Our clients may decide to enter into or further expand insourcing activities in the future

Our current agreements with our clients do not prevent our clients from insourcing services that are currently outsourced to us, and none of our clients have entered into any non-compete agreements with us.

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Any decision by our clients to enter into or further expand insourcing activities in the future could cause us to lose a significant volume of business.

Moreover, the trend towards outsourcing business processes may not continue and could be reversed by factors beyond our control, including negative perceptions attached to outsourcing activities or government regulations against outsourcing activities.

Moreover, companies may not continue to leverage outsourcing services at the same volumes and their outsourcing could be reversed by factors beyond our control, including negative perceptions attached to outsourcing activities or government regulations against outsourcing activities.

Current or prospective clients may elect to perform such services in-house that may be associated with using an offshore provider.

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In addition, we may experience technical problems and additional costs as we introduce new solutions, deploy future iterations of our solutions, and integrate new solutions with existing client systems and workflows.

In addition, we plan to expand across client industries and enter new industry verticals such as travel and hospitality.

If we are unable to successfully adapt our solutions to these industry verticals, our potential growth opportunities could be compromised.

In addition, we plan to expand across client industries and enter new industry verticals.

If we are unable to successfully adapt our solutions to new industry verticals, our potential growth opportunities could be compromised.

We may not be successful in converting visitors to our customer acquisition websites into purchasers or subscribers.

The growth of our customer acquisition business depends in part upon growth in the number of our customers or subscribers we are able to acquire for our clients.

The growth of our customer acquisition business through our ibex Digital offerings depends in part upon growth in the number of our customers or subscribers we are able to acquire for our clients.

The rate at which we convert consumers into customers or subscribers using our customer acquisition websites is a significant factor in the growth of our customer acquisition business.

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In addition, some of our competitors may enter into strategic or commercial relationships among themselves or with larger, more established companies in order to increase their ability to address customer needs and reduce operating costs or enter into similar arrangements with potential clients.

Further, trends of consolidation in our certain industries and among competitors may result in new competitors with greater scale, a broader footprint, better technologies and price efficiencies attractive to our clients.

Further, trends of consolidation in certain of our industries and among competitors may result in new competitors with greater scale, a broader footprint, better technologies and price efficiencies attractive to our clients.

Increased competition, our inability to compete successfully, pricing pressures or loss of market share could result in reduced operating profit margins and diminished financial performance.

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The sales cycle for our solutions, which may extend up to two years, and the internal budget and approval processes of our prospective clients, make it difficult to predict the timing of new client engagements.

Unfavorable economic conditions, especially in the United States and in the retail, e-commerce and telecommunications industries, from which we generate a significant percentage of our revenue, could adversely affect us.

General economic uncertainty in global markets and unfavorable global economic conditions including inflation, rising interest rates, recession, and foreign exchange fluctuations, could adversely affect us.

Our results of operations may vary based on the impact of changes in the global economy on our clients.

While it is often difficult to predict the impact of general economic conditions on our business, unfavorable economic conditions, such as those that occurred during the global financial crisis and economic downturn in 2008 and more recently, during and immediately after the COVID-19 pandemic (the “Pandemic”), could adversely affect the demand for some of our clients’ products and services and, in turn, could cause a decline in the demand for our solutions.

Additionally, several of our clients, particularly in the telecommunications and technology industries, have experienced substantial price competition.

Global economic conditions, including inflation, rising interest rates, recession, and foreign exchange fluctuations, affect us, our clients’ businesses, and the markets in which we and they operate.

While it is often difficult to predict the impact of general global economic conditions on our business, unfavorable global economic conditions, such as those that occurred during the global financial crisis and economic downturn in 2008 and more recently, during and immediately after the COVID-19 pandemic (the “Pandemic”), could adversely affect the demand for some of our clients’ products and services and, in turn, could cause a decline in the demand for our solutions.

Additionally, several of our clients, particularly in the Telecommunication and Technology verticals, have experienced substantial price competition.

As a result, we face increasing price pressure from such clients, which, if continued, could negatively affect our operating and financial performance.

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In addition, a significant portion of our clients are concentrated in the Retail and E-commerce industry.

For the fiscal year ended June 30, 2023, 23.2% of our revenue was derived from clients in the Retail and E-commerce industry, 16.3% of our revenue was derived from clients in the telecommunications industry, 9.0% of our revenue was derived from clients in the technology industry, and 4.1% of our revenue was derived from clients in the cable industry.

For the fiscal year ended June 30, 2024, 25.4% of our revenue was derived from clients in the Retail & E-commerce vertical, 15.0% of our revenue was derived from clients in the Telecommunication vertical, 8.4% of our revenue was derived from clients in the Technology vertical, and 4.3% of our revenue was derived from clients in the Cable vertical.

For these reasons, among others, the occurrence or persistence of unfavorable economic conditions could adversely affect our business, results of operations, financial condition and prospects.

See also the risk factor entitled Fluctuations against the U.S.

dollar in the local currencies in the countries in which we operate could have a material effect on our results of operations .

The inability or unwillingness of clients that represent a large portion of our accounts receivable balance to pay such balances in a timely fashion could adversely affect our business.

We often carry significant accounts receivable balances from a limited number of clients that generate a large portion of our revenues.

A client may become unable or unwilling to pay its balance in a timely fashion due to a general economic slowdown, economic weakness in its industry or the financial insolvency of its business.

A client may become unable or unwilling to pay its balance in a timely fashion due to, for example, a general economic slowdown, economic weakness in its industry, the financial insolvency of its business or a dispute as to the services provided.

Our efforts to monitor our accounts receivable balances may not successfully identify or predict a client’s financial inability or unwillingness, for any reason, to pay a large accounts receivable balance, which would adversely impact our financial condition and cash flow and could adversely impact our ability to draw upon our receivables-backed lines of credit.

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We review our goodwill and indefinite-lived intangible assets for impairment at least annually or more frequently if events or changes in circumstances indicate the carrying value may not be recoverable.

In the year ended June 30, 2023, we did not recognize any impairment of goodwill or indefinite-lived intangible assets.

Factors that may be considered a change in circumstances indicating that the carrying value of our goodwill or indefinite-lived intangible assets may not be recoverable include declines in stock price, market capitalization or cash flows and slower growth rates in our industry.

We could be required to record a significant charge to earnings in our financial statements during the period in which any impairment of our goodwill or indefinite-lived intangible assets were determined.

Our ability to use our U.S.

net operating loss carry forwards may be subject to limitation.

We could be required to record a significant charge to earnings in our financial statements during the

period in which any impairment of our goodwill or indefinite-lived intangible assets were determined.

In the year ended June 30, 2024, we did not recognize any impairment of goodwill or indefinite-lived intangible assets.

Our ability to use our net operating loss carry forwards may be subject to limitation.

As of June 30, 2024, for income tax purposes, we had approximately $16.7 million in estimated U.S.

and international net operating loss carry forwards that will begin to expire between 2023 and 2039.

state and international net operating loss carry forwards that will begin to expire between 2023 and 2039.

The timing and manner in which we may utilize net operating losses may be limited by a lack of future taxable income which could adversely affect our ability to utilize our net operating losses before they expire.

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These limitations may increase our U.S.

federal, state or foreign income tax liability.

Operations Risk

state or foreign income tax liability.

Operational Risk

Our business relies heavily on technology, telephone and computer systems as well as third-party telecommunications providers, which subjects us to various uncertainties.

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Prolonged disruption of our solutions, even if due to events beyond our control, could also entitle our clients to terminate their contracts with us or result in other brand and reputational damages.

An inability to effectively adopt AI into our offerings could materially impact our ability to compete.

We have integrated, and will continue to integrate AI into our solutions.

AI is likely to be an essential part of our future service offerings.

The integration of AI and generative AI technology into our offerings, including our use of third-party providers, could result in operational and reputational harm.

We are increasingly integrating AI into our solutions, including the use of third-party provider offerings, to better position ourselves to offer our clients the most robust set of solutions, while also implementing appropriate governance and controls for its use.

AI is still emerging and likely to be an essential part of our future service offerings.

The development, adoption, and use of generative AI technologies is still in their infancy, and inadequate AI development or deployment practices by us or our third-party developers or vendors could lead to unintended consequences.

While AI offers significant benefits, it also presents risks and challenges to our business.

Some of the recently brought to market third-party AI solutions have the potential of replacing some of our lower tier service offerings which puts pressure on the ‘speed to market’ for our efforts.

At the same time, AI solutions are evolving and are not infallible, and issues with data sourcing, technology integration, program bias into decision-making algorithms, security challenges and the protection of personal information and privacy could impair our successful and timely adoption of this technology.

If our AI solutions are deployed before they are perfected and the output from our AI solutions is deemed by clients to be questionable or inaccurate, our brand and reputation may be harmed and our results of operations may be impacted.

On the other hand, if we are too slow to market and are unable to timely and effectively integrate and deploy AI in our offerings, we would fall behind our competitors and our results of operations and future prospects may also be impacted.

Some of the recently brought to market third-party AI solutions have the potential of replacing some of our lower tier service offerings.

At the same time, AI solutions are evolving and are not infallible, and issues with data sourcing, technology integration, program bias in decision-making algorithms, flawed algorithms based on insufficient or biased data sets, security challenges and the protection of personal information and privacy could impair our successful and effective adoption of this technology.

Additionally, any latency, disruption, or failure in these AI systems or infrastructure could cause delays or errors in our offerings.

We are also dependent, in part, on our third-party provider offerings and their ability to effectively and quickly integrate their AI into our solutions.

We may not have full control over the quality and performance of third-party providers, and therefore, any unexpected deficiencies or problems arising from these third-party providers may cause significant interruptions in the operation of our business.

If our AI solutions or those of our third-party providers are deployed before they are perfected and the output from these AI solutions is deemed by clients to be questionable or inaccurate, our brand and reputation may be harmed and our results of operations may be impacted.

On the other hand, if we are too slow to market and are unable to timely and effectively integrate and deploy AI in our offerings, we could fall behind our competitors and our results of operations and future prospects may also be impacted.

Developing, testing, and deploying resource-intensive AI systems may require additional investment and increase our costs.

Our business is heavily dependent upon our international operations, particularly in the Philippines, Jamaica, Pakistan and Nicaragua and any disruption to those operations would adversely affect us.

Our international operations, particularly in the Philippines, Jamaica, Pakistan and Nicaragua, and our ability to maintain our offshore facilities in those jurisdictions is an essential component of our business model, as the labor costs in certain of those jurisdictions are substantially lower than the cost of comparable labor in the United States and other developed countries, which allows us to competitively price our solutions.

Our competitive advantage will be greatly diminished and may disappear altogether as a result of a number of factors, including the failure of power grids in certain of the countries in which we operate, which are subject to frequent outages, and those listed in the risk factors titled:

• “Natural events, health epidemics (including the Pandemic), wars, widespread civil unrest, terrorist attacks and other acts of violence involving any of the countries in which we or our clients have operations could adversely affect our operations and client confidence” ;

• “Natural events, health epidemics, geopolitical conditions, including developing or ongoing conflicts, widespread civil unrest, terrorist attacks and other acts of violence involving any of the countries in which we or our clients have operations could adversely affect our operations and client confidence.” ;

• “Fluctuations against the U.S.

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In each of the industries in which we participate, there is competition for experienced senior management and personnel with industry-specific expertise.

We could be harmed if there is increased competition for these employees, particularly in tight labor markets, if there are impactful changes in employment, immigration, or other applicable laws, or if we lose key members of our personnel, particularly to competitors.

We could be negatively impacted if there is increased competition for these employees, particularly in tight labor markets, if there are impactful changes in employment, immigration, or other applicable laws, or if we lose key members of our personnel, particularly to competitors.

Additionally, a significant increase in the turnover rate among trained employees could increase our costs and decrease our operating profit margins.

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Employee benefits expenses in each of the countries in which we operate are a function of the country’s economic growth, level of employment and overall competition for qualified employees in the country.

In most of the geographies in which we operate, we have experienced increasing labor costs due to increased demand and greater competition for qualified employees in fiscal year 2023.

Natural events, health epidemics (including the Pandemic), wars, widespread civil unrest, terrorist attacks and other acts of violence involving any of the countries in which we or our clients have operations could adversely affect our operations and client confidence.

Natural events (such as floods and earthquakes), health epidemics (including the Pandemic), wars, widespread civil unrest, terrorist attacks and other acts of violence could result in significant worker absenteeism, increased attrition rates, lower asset utilization rates, voluntary or mandatory closure of our facilities, our inability to meet dynamic employee health and safety requirements, our inability to meet contractual service levels for our clients, our inability to procure essential supplies, travel restrictions on our employees, and other disruptions to our business.

For example, a substantial portion of operations are conducted in the Philippines, Jamaica, Pakistan, and Nicaragua, which have experienced and may continue to face political instability and unrest, natural disasters, acts of terrorism, crime, or similar risks.

In addition, these events could adversely affect global

economies, financial markets and our clients’ levels of business activity.

In most of the geographies in which we operate, we have experienced increasing labor costs due to increased demand and greater competition for qualified employees.

Natural events, health epidemics, geopolitical conditions, including developing or ongoing conflicts, widespread civil unrest, terrorist attacks and other acts of violence involving any of the countries in which we or our clients have operations could adversely affect our operations and client confidence.

Natural events (such as floods and earthquakes), health epidemics (including the Pandemic), geopolitical conditions, including developing or ongoing conflicts, widespread civil unrest, terrorist attacks and other acts of violence could result in significant worker absenteeism, increased attrition rates, lower asset utilization rates, voluntary or mandatory closure of our facilities, our inability to meet dynamic employee health and safety requirements, our inability to meet contractual service levels for our clients, our inability to procure essential supplies, travel restrictions on our employees, and other disruptions to our business.

For example, a substantial portion of our operations are conducted in the Philippines, Jamaica, Pakistan, and Nicaragua, which have experienced and may continue to face political instability and unrest, natural disasters, acts of terrorism, crime, or similar risks.

In addition, these events could adversely affect global economies, financial markets and our clients’ levels of business activity.

Any of these events, their consequences or the costs related to mitigation or remediation could impact us.

Insurance may not be sufficient to guarantee costs of repairing the damage caused by such disruptive events and such events may not be covered under our policies.

Insurance may not be sufficient to guarantee costs of repairing the damage caused by such disruptive events and such events may not be covered under our insurance policies.

Fluctuations against the U.S.

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During the fiscal year ended June 30, 2024, 3% of our revenue was generated in currencies other than the U.S.

A portion of our costs and expenses that were incurred outside of the United States were paid for in foreign currencies, mostly the local currencies of the Philippines, Jamaica, and Pakistan.

During the year ended June 30, 2023, out of our total payroll and related costs, 26.5% were incurred in the Philippines Peso, 16.5% were incurred in the Jamaican Dollar and 9.2% were incurred in Pakistani Rupee.

To a lesser extent, we also have exposures to the Nicaraguan Cordoba, Great British Pound, Canadian Dollar, Euro, and Honduran Lempira.

A portion of our costs and expenses that were incurred outside of the United States were paid in foreign currencies, mostly the local currencies of the Philippines, Jamaica, and Pakistan.

During the year ended June 30, 2024, out of our total payroll and related costs, 30.9% were incurred in the Philippines Peso, 15.5% were incurred in the Jamaican Dollar and 8.7% were incurred in the Pakistani Rupee.

To a lesser extent, we also have exposures to the Nicaraguan Cordoba, Great British Pound, Canadian Dollar, and Honduran Lempira.

Because our financial statements are presented, and revenues are primarily generated, in U.S.

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As we increase our revenues from non-U.S.

locations or expand our solution delivery or back office footprint to other international locations, this effect may be magnified.

locations and expand our solution delivery or back office footprint to other international locations, this effect may be magnified.

We engage in hedging strategies in an effort to reduce the adverse impact of fluctuations in foreign currency exchange rates, which may not be successful.

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Quantitative and Qualitative Disclosures about Market Risk” for more information.

We depend upon internet search engines to attract a significant portion of the consumers who visit our customer acquisition websites, and we would be harmed if we are unable to advertise on search engines on a cost-effective basis.

We depend upon internet search engines to attract a significant portion of the consumers who visit our customer acquisition websites, and we would be negatively impacted if we are unable to advertise on search engines on a cost-effective basis.

We maintain a number of different customer acquisition websites to market our clients’ offerings to consumers in their target customer segments.

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In some instances, these modifications have caused our customer acquisition websites to be listed less prominently in unpaid search results, which has resulted in decreased traffic to these websites.

Our customer acquisition websites may also become listed less prominently in unpaid search results for other reasons, such as search engine technical difficulties, search engine technical changes and changes we decide to make to our websites.

acquisition websites may also become listed less prominently in unpaid search results for other reasons, such as search engine technical difficulties, search engine technical changes and changes we decide to make to our websites.

In addition, search engines have deemed the practices of some companies to be inconsistent with search engine guidelines and decided not to list their websites in search result listings at all.

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We typically pay a search engine for prominent placement of our name and website when certain specific terms are searched on the search engine, regardless of the unpaid search result listings.

In some circumstances, the prominence of the placement of our name and website is determined by a combination of factors, including the

amount we are willing to pay and algorithms designed to determine the relevance of our paid advertisement to a particular search term.

In some circumstances, the prominence of the placement of our name and website is determined by a combination of factors, including the amount we are willing to pay and algorithms designed to determine the relevance of our paid advertisement to a particular search term.

We bid against our competitors and others for the display of these paid search engine advertisements.

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• our ability to work with the marketing partner to implement website changes, launch marketing campaigns and pursue other initiatives necessary to maintain positive consumer experiences and acceptable traffic volumes.

If we are unable to maintain successful relationships with our existing marketing partners or fail to establish successful relationships with new marketing partners, we will be harmed.

If we are unable to maintain successful relationships with our existing marketing partners or fail to establish successful relationships with new marketing partners, our business could be negatively impacted.

We may face difficulties as we expand our operations into countries in which we have no prior operating experience.

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This could have a material effect on our business, results of operations and financial condition.

Our facilities operate on leasehold property, and our inability to renew our leases on commercially acceptable terms or at all may adversely affect our results of operations.

Our facilities operate on leasehold property, and the inability to renew our leases on commercially acceptable terms or at all may adversely affect our results of operations.

Our facilities operate solely on leasehold property.

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We and our customers may be subject to privacy- and data protection-related laws and regulations that impose obligations in connection with the collection, use, storage, transfer, dissemination, security, and/or other processing (“Processing”) of personal information (such personal information collectively with all information defined or described by applicable law as “personal data,” “personally identifiable information,” “PII” or any similar term, is referred to as personal information), data, financial data, health data or other similar data.

In the United States, the privacy and data protection rules and regulations to which we may be subject include those promulgated under the authority of the FTC, state regulators, and regulator enforcement positions and expectations.

In the United States, the privacy and data protection rules and regulations to which we may be subject include those promulgated under the authority of the Federal Trade Commission (“FTC”), state regulators, and regulator enforcement positions and expectations.

Similarly, many foreign countries and governmental bodies, including the EU member states and the United Kingdom, have laws and regulations concerning the processing of personal information obtained from their residents and individuals located in the EU or UK or by businesses operating within their jurisdiction, which are often more restrictive and apply more broadly than those in the United States.

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• Telecommunications Laws.

Working with clients in the telecommunications, technology and cable industries means that we may process or come into possession of data that must be treated with special care.

Working with clients in the Telecommunication, Technology and Cable verticals means that we may process or come into possession of data that must be treated with special

For example, in the United States, telecommunications providers are subject to rules on the use and sharing of Customer Proprietary Network Information (“CPNI”).

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It also requires that CPNI be adequately safeguarded.

federal agencies, the Federal Trade Commission (“FTC”) and the Federal Communications Commission (“FCC”), and various states have enacted laws including, at the federal level, the Telephone Consumer Protection Act of 1991, that restrict the placing of certain telephone calls and texts to residential and wireless telephone subscribers by means of automatic telephone dialing systems, prerecorded or artificial voice messages and fax machines.

federal agencies, the FTC and the Federal Communications Commission (“FCC”), and various states have enacted laws including, at the federal level, the Telephone Consumer Protection Act of 1991, that restrict the placing of certain telephone calls and texts to residential and wireless telephone subscribers by means of automatic telephone dialing systems, prerecorded or artificial voice messages and fax machines.

Internationally, we are also subject to similar laws imposing limitations on marketing calls to wireline and wireless numbers and compliance with do not call rules.

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Our security controls over our systems, as well as other security practices we follow, may not in the future prevent the improper access to or disclosure of personal information or proprietary information.

Such incidents or disclosure could harm our reputation and subject us to significant

liability under our contracts and laws that protect personal information, resulting in increased costs or loss of revenue.

For example, in August 2020, we detected a ransomware attack that briefly impacted a portion of our information technology systems and resulted in litigation.

Such incidents or disclosure could harm our reputation and subject us to significant liability under our client contracts and laws that protect personal information, resulting in increased costs or loss of revenue.

The Company previously experienced a cybersecurity incident in August of 2020.

Threat actors may again attempt to penetrate our systems or those of our vendors or fraudulently induce our personnel or the personnel of our vendors to disclose information in order to gain access to our systems or data or seek to gain a fraudulent payment (such as through a phishing/wire fraud scheme).

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Our results of operations and financial condition could be adversely affected if tax contingencies are resolved adversely or if we become subject to increased levels of taxation.

We are also subject to income taxes in the United States and numerous other foreign jurisdictions.

We are also subject to income taxes in the United States

and numerous other foreign jurisdictions.

Our tax expense and cash tax liability in the future could be adversely affected by numerous factors, including, but not limited to, changes in tax laws, regulations, accounting principles or interpretations and the potential adverse outcome of tax examinations and pending tax-related litigation.

For more information, see the risk factor entitled “Our global operations and customers expose us to numerous legal and regulatory requirements.”

Changes in the valuation of deferred tax assets and liabilities, which may result from a decline in our profitability or changes in tax rates or legislation, could have a material adverse effect on our tax expense.

particularly those clients that exercise control over or have substantial dependency on our solutions.

In addition, our effective tax rate could be adversely affected by challenges to our intercompany transactions, changes in the valuation of deferred tax assets and liabilities, changes in tax laws or in their interpretation or enforcement, changes in the mix of earnings in countries with differing tax rates and changes in accounting principles, including U.S.

Tax rates and policies in the jurisdictions in which we operate may change materially as a result of shifting economic, social and political conditions.

The governments of foreign jurisdictions from which we deliver solutions may assert that certain of our clients have a “permanent establishment” in such foreign jurisdictions by reason of the activities we perform on their behalf, particularly those clients that exercise control over or have substantial dependency on our solutions.

Such an assertion could affect the size and scope of the solutions requested by such clients in the future.

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In response to the Council’s findings, on December 31, 2018, the Bermuda government enacted the Economic Substance Act 2018, and related regulations, as subsequently amended (the “Substance Act”), with effect from July 1, 2019 for existing Bermuda entities, requiring certain entities in Bermuda engaged in “relevant activities” to maintain a substantial economic presence in Bermuda and to satisfy economic substance requirements.

The list of “relevant activities” includes holding entities, and the legislation requires Bermuda companies engaging in a “relevant activity” to be locally managed and directed, to carry on core income generating activities in Bermuda, to maintain adequate physical presence in Bermuda, and to have an adequate level of local full time qualified employees and incur adequate operating expenditure in Bermuda.

The list of “relevant activities” includes holding entities and financing and leasing (which includes intra-group lending), and the legislation requires Bermuda companies engaging in a “relevant activity” to be locally managed and directed, to carry on core income generating activities in Bermuda, to maintain adequate physical presence in Bermuda, and to have an adequate level of local full time qualified employees and incur adequate operating expenditure in Bermuda.

Under the Substance Act, any entity that must satisfy economic substance requirements but fails to do so could face automatic disclosure to competent authorities in the European Union of the information filed by the entity with the Bermuda Registrar of Companies in connection with the economic substance requirements and may also face financial penalties, restriction or regulation of its business activities or may be struck as a registered entity in Bermuda.

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However, in February 24, 2022, the Council temporarily added Bermuda to the list of cooperative jurisdictions that have committed to implement good tax governance principles (Annex II, also known as the “Grey List”), and in October 2022, Bermuda was returned to being “White Listed,” as it fully complied with the additional requirements of the Council.

Although we believe we comply with the requirements of the Substance Act, we are not able to predict how the Bermuda authorities will interpret and enforce the Substance Act or the potential impact of compliance or noncompliance on our results of operations and financial condition.

We are not able to predict how the Bermuda authorities will interpret and enforce the Substance Act or the potential impact of compliance or noncompliance on our results of operations and financial condition.

Moreover, the current U.S.

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Congress have stated that one of their top legislative priorities is significant reform of the Internal Revenue Code.

On August 16, 2022, the United States enacted the Inflation Reduction Act of 2022, which introduces a fifteen percent corporate minimum tax and a one percent excise tax on stock repurchases.

On August 16, 2022, the United States enacted the Inflation Reduction Act of 2022 (the “Inflation Reduction Act”), which introduces a fifteen percent corporate minimum tax and a one percent excise tax on stock repurchases.

We continue to evaluate the Inflation Reduction Act and its requirements, as well as its application to our business.

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Furthermore, the Organization for Economic Cooperation and Development (the “OECD”) is leading an initiative under its base erosion and profit shifting (“BEPS”) project aimed at imposing a global minimum tax rate.

On October 8, 2021, the OECD announced the OECD/G20 Inclusive Framework on Base Erosion and Profit Shifting, which agreed to a two-pillar solution to address tax challenges arising from the digitalization of the economy, with the intention of implementing the proposed “Pillar One” in 2024.

of implementing the proposed “Pillar One” in 2024.

On December 20, 2021, the OECD released the Pillar Two Model Rules defining the global minimum tax, which call for the taxation of multinational enterprises (having consolidated revenues in excess of €750 million) at a minimum rate of 15%.

The OECD continues to release additional guidance on the two-pillar framework with widespread implementation anticipated by 2024.

Although these rules are not currently applicable to the Company, the Company operates in participating countries that are expected to implement the OECD’s two-pillar agreement by entering into a multilateral convention and enacting domestic legislation by 2024.

At this stage, it is difficult to predict whether and to what extent such legislative changes will impact us, however, the legislation could have implications for international companies based in Bermuda, increase our future global effective tax rate and have a material effect on our future financial position and results of operations.

On December 27, 2023, the Government of Bermuda enacted the Bermuda Corporate Income Tax Act 2023 (the “Bermuda CIT Act”).

Entities subject to tax under the Bermuda CIT Act are the Bermuda constituent entities of multi-national groups.

A multi-national group is defined under the Bermuda CIT Act as a group of entities in more than one jurisdiction with consolidated revenues of at least €750 million for two of the four previous fiscal years.

If Bermuda constituent entities of a multi-national group are subject to tax under the Bermuda CIT Act, such tax is charged at a rate of 15% of the net income of such constituent entities (as determined in accordance with the Bermuda CIT Act, including after adjusting for any relevant foreign tax credits applicable to the Bermuda constituent entities).

Although the commencement date of the Bermuda CIT Act is January 1, 2024, no tax is chargeable under the Bermuda CIT Act until tax years starting on or after January 1, 2025.

Our operations are subject to the requirements of the Bermuda CIT Act.

At this stage, it is difficult to predict whether and to what extent such legislative changes will impact us.

We do not currently fall within the definition of a multi-national group as our annual revenues are less than €750 million for more than two of the four previous fiscal years and therefore, the tax payable under the Bermuda CIT Act does not apply to us.

However, there may be legislation passed in other jurisdictions in the future which could have implications for us as an international company, which may increase our future global effective tax rate and have a material effect on our future financial position and results of operations.

We may become subject to taxes in Bermuda after 2035.

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Given the limited duration of the Bermuda Minister of Finance’s assurance, we cannot assure shareholders that we will not be subject to any Bermuda tax after March 31, 2035.

However, on December 27, 2023, the Government of Bermuda enacted the Bermuda CIT Act, which will become effective for tax years beginning on or after January 1, 2025.

Given the potential for the new corporate income tax regime in Bermuda to supersede the Minister of Finance’s assurance, the Company may become subject to taxes in Bermuda before March 31, 2035.

The tax payable under the Bermuda CIT Act is not currently applicable to us as we do not meet the revenue threshold for a multi-national group under the definition of the Bermuda CIT Act, but this may change in the future, either in terms of our revenues or in terms of the threshold being reduced.

Bermuda law differs from the laws in effect in the United States and may afford less protection to holders of our common shares.

We are incorporated under the laws of Bermuda.

As a result, our corporate affairs are governed by the Companies Act 1981, as amended (the “Companies Act”) which differs in some material respects from laws typically applicable to U.S.

As a result, our corporate affairs are governed by the Companies Act which differs in some material respects from laws typically applicable to U.S.

corporations and shareholders, including the provisions relating to interested directors, amalgamations, mergers and acquisitions, takeovers, shareholder lawsuits and indemnification of directors.

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corporations.

The Bermuda courts, however, would ordinarily be expected to permit a shareholder to commence an action in the name of a company to remedy a wrong to the company where the act complained of is alleged to be beyond the corporate power of the company or illegal, or would result in the violation of the company’s memorandum of association or bye-laws.

violation of the company’s memorandum of association or bye-laws.

Furthermore, consideration would be given by a Bermuda court to acts that are alleged to constitute a fraud against the minority shareholders or, for instance, where an act requires the approval of a greater percentage of the company’s shareholders than that which actually approved it.

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In addition, the rights of holders of our common shares and the fiduciary responsibilities of our directors under Bermuda law are not as clearly established as under statutes or judicial precedent in existence in jurisdictions in the United States, particularly the State of Delaware.

holders of our common shares may have more difficulty protecting their interests than would shareholders of a corporation incorporated in a jurisdiction within the United States.

or other foreign judgments you may obtain against us may be difficult to enforce against us in Bermuda.

We are incorporated in Bermuda and a significant portion of our assets is located outside the United States.

Therefore, holders of our common shares may have more difficulty protecting their interests than would shareholders of a corporation incorporated in a jurisdiction within the United States.

or other foreign judgments obtained against us may be difficult to enforce against us in Bermuda.

We are incorporated in Bermuda and a significant portion of our assets is located outside the United States (in the jurisdictions that we operate).

In addition, certain of our directors are non-residents of the United States.

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investors to serve process within the United States upon us or our directors and executive officers, or to enforce a judgment against us for civil liabilities in U.S.

In addition, you should not assume that courts in the countries in which we are incorporated or where our assets are located would enforce judgments of U.S.

In addition, investors should not assume that courts in the countries in which we are incorporated or where our assets are located would enforce judgments of U.S.

courts obtained in actions against us based upon the civil liability provisions of applicable U.S.

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We are a “controlled company” within the meaning of the rules of Nasdaq and, as a result, qualify for, and intend to rely on, exemptions from certain corporate governance requirements.

Our bye-laws provide that any shareholder holding 50% or more of the nominal value of our voting shares will have the right to appoint five directors to our board of directors.

If there is no such 50% holder, then any shareholder holding 25% or more of the nominal value of our voting shares (first in time as compared to any other 25% shareholder) will have the right to appoint five directors to our board of directors.

Our board of directors is currently set at eight members.

TRGI is the first-in-time shareholder, holding 30% by nominal value of the voting shares of the Company as of June 30, 2023 and thus holds the right to appoint five of the eight members of our board of directors (a majority).

Our bye-laws provide that any shareholder holding 50% or more of the nominal value of our voting shares will have the right to appoint five directors to our Board.

Our Board is currently set at eight members.

TRGI is the first-in-time shareholder, holding 32% by nominal value of the voting shares of the

Company as of June 30, 2024 and thus holds the right to appoint five of the eight members of our Board (a majority).

As a result, we are a “controlled company” within the meaning of the corporate governance standards of Nasdaq.

Under these rules, a company of which more than 50% of the voting power in the election of directors is held by an individual, group or another company is a “controlled company” and may elect not to comply with certain corporate governance requirements.

For example, controlled companies, within one year of the date of the listing of their common stock:

are not required to have a board of directors that is composed of a majority of “independent directors” as defined under the Nasdaq rules;

are not required to have a compensation committee that is composed entirely of independent directors;

are not required to have director nominations be made, or recommended to the full board of directors, by our independent directors or by a nomination committee that is composed entirely of independent directors.

Accordingly, you may not have the same protections afforded to stockholders of companies that are subject to all of the corporate governance requirements of Nasdaq.

For example, controlled companies may elect not to comply with certain Nasdaq listing standards that would otherwise require it to have:

a board of directors that is composed of a majority of “independent directors” as defined under the Nasdaq rules;

a compensation committee that is composed entirely of independent directors;

director nominations be made, or recommended to the full board of directors, by our independent directors or by a nomination committee that is composed entirely of independent directors.

Accordingly, investors may not have the same protections afforded to stockholders of companies that are subject to all of the corporate governance requirements of Nasdaq.

Our executive officers, directors and principal shareholders have the ability to control all matters submitted to shareholders for approval.

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For example, these persons, if they choose to act together, would control the election of directors and approval of any merger, amalgamation, consolidation or sale of all or substantially all of our assets.

This concentration of voting power could delay or prevent an acquisition of our company on terms that other shareholders may desire.

Our largest shareholder, The Resource Group International Limited, and its major shareholder, TRG Pakistan Limited, have substantial control over us and could limit your ability to influence the outcome of key transactions, including any change of control.

This concentration of voting power could delay or prevent an acquisition of the Company on terms that other shareholders may desire.

Our largest shareholder, The Resource Group International Limited, and its major shareholder, TRG Pakistan Limited, have substantial control over us and could limit our shareholders’ ability to influence the outcome of key transactions, including any change of control.

As of June 30, 2024, our largest shareholder, TRGI, beneficially owns, in the aggregate, approximately 32% of our outstanding common shares.

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The members of the boards of directors of TRGP and TRGI have some overlap, and TRGP has the exclusive right to appoint three out of the seven directors at TRGI, with the remaining directors appointed jointly with or solely by other shareholders of TRGI.

John Leone serves as a director of each of TRGP and TRGI and also serves as TRGI’s chairman.

Mohammed Khaishgi serves as a director and the chief executive officer of TRGI.

John Leone serves as a director of each of TRGI and TRGP.

Mohammed Khaishgi serves as a director of each of TRGI and TRGP, and serves as the chief executive officer of TRGI.

Additionally, pursuant to a stockholder’s agreement, dated September 15, 2017, between TRGI and us (the “TRGI Stockholder’s Agreement”), we will not take or commit to take, or cause or permit any of our subsidiaries to take, certain enumerated actions without TRGI’s consent, to be withheld or given in TRGI’s sole discretion.

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As a result, we expect that TRGP and TRGI will be able to exert significant influence over our business.

TRGP and TRGI may have interests that differ from your interests and may cause TRGI’s shares in our company to be voted in a way with which you disagree and that may be adverse to your interests.

The concentration of ownership of our share capital may have the effect of delaying, preventing or deterring a change of control of our company and its subsidiaries, as well as certain M&A activity and securities offerings, and could deprive our shareholders of an opportunity to receive a premium for their common shares as part of a sale of our company and may adversely affect the market price of our common shares.

In addition, because of the terms of our bye-laws providing rights to TRGI, as the first-in-time shareholder of 25% or more of the nominal value of our voting shares, to appoint a majority of our directors, we are able to take advantage of exemptions from the Nasdaq corporate governance rules for as long as we continue to qualify as a “controlled company” within the meaning of the Nasdaq corporate governance standards.

Our bye-laws provide that any shareholder holding 50% or more of the nominal value of our voting shares will have the right to appoint five directors to our board of directors.

TRGP and TRGI may have interests that differ from interests of our shareholders and may cause TRGI’s shares in the Company to be voted in a way with which investors disagree and that may be adverse to shareholders’ interests.

The concentration of ownership of our share capital may have the effect of delaying, preventing or deterring a change of control of the Company and its subsidiaries, as well as certain M&A activity and securities offerings, and could deprive our shareholders of an opportunity to receive a premium for their common shares as part of a sale of our company and may adversely affect the market price of our common shares.

In addition, because of the terms of our bye-laws providing rights to TRGI, as the first-in-time shareholder of 25% or more of the nominal value of our voting

shares, to appoint a majority of our directors, we are able to take advantage of exemptions from the Nasdaq corporate governance rules for as long as we continue to qualify as a “controlled company” within the meaning of the Nasdaq corporate governance standards.

For more information, see the risk factor entitled “ We are a “controlled company” within the meaning of the rules of Nasdaq and, as a result, qualify for, and intend to rely on, exemptions from certain corporate governance requirements.”

The anticipated strategic and financial benefits of our relationship with Amazon may not be realized.

On November 13, 2017, we issued to Amazon.com NV Investment Holdings LLC, a subsidiary of Amazon.com, Inc.

(“Amazon”), a 10-year warrant to acquire approximately 10.0% of our equity on a fully diluted and as-converted basis as of the date of issuance of the warrant.

We issued this warrant to Amazon with the expectation that the warrant would result in various benefits including, among others, growth in revenues and improved cash flows.

Achieving the anticipated benefits from the warrant is subject to a number of challenges and uncertainties.

(“Amazon”), a 10-year warrant to acquire approximately 10.0% of our equity on a fully diluted and as-converted basis as of the date of issuance of the warrant (the “Amazon Warrant”).

We issued this warrant to Amazon with the expectation that it would result in various benefits including, among others, growth in revenues and improved cash flows.

Achieving the anticipated benefits from the Amazon Warrant is subject to a number of challenges and uncertainties.

If we are unable to achieve our objectives or if we experience delays, the expected benefits may be only partially realized or not at all, or may take longer to realize than expected, which could adversely impact our financial condition and results of operations.

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In addition, any sales in the public market of any common shares issuable upon the exercise of the Amazon Warrant by Amazon could adversely affect the market price of our common shares.

We are an emerging growth company, and the reduced disclosure requirements applicable to emerging growth companies may make our common shares less attractive to investors.

We are an “emerging growth company” and a “smaller reporting company”, and certain exemptions from disclosure requirements available to us may make our common shares less attractive to investors.

We are an emerging growth company (“EGC”), as defined in the Jumpstart Our Business Startups Act (the “JOBS Act”), and we may take advantage of certain exemptions from various reporting requirements that are applicable to other public companies that are not EGCs including, but not limited to, not being required to comply with the auditor attestation requirements of Section 404 of the Sarbanes-Oxley Act of 2002 (the “Sarbanes-Oxley Act”), reduced financial disclosure obligations, reduced disclosure obligations regarding executive compensation in our periodic reports and proxy statements, and exemptions from the requirements of holding a nonbinding advisory vote on executive compensation and any golden parachute payments not previously approved.

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and the last day of the fiscal year ending after the fifth anniversary of our initial public offering.

If we take advantage of any of these reduced reporting requirements in future filings, the information that we provide our security holders may be different than you might get from other public companies in which you hold equity interests.

If we take advantage of any of these reduced reporting requirements in future filings, the information that we provide to our shareholders may be different than investors might get from other public companies in which they hold equity interests.

We cannot predict if investors will find our common shares less attractive because we may rely on these exemptions.

If some investors find our common shares less attractive as a result, there may be a less active trading market for our common shares and our share price may be more volatile.

The transition from foreign private issuer to U.S.

domestic issuer status effective from July 1, 2023, requires us to comply with the U.S.

domestic reporting requirements under the Exchange Act and will result in significant additional compliance activity and likely increased costs and expenses.

Until June 30, 2023, we were a “foreign private issuer” as such term is defined in Rule 405 of Regulation C, under the Securities Act and Rule 3b-4 under the Exchange Act.

As a foreign private issuer, we were not required to comply with all the periodic disclosure and current reporting requirements of the Exchange Act and related rules and regulations.

In the annual review on December 31, 2022, it was determined that we no longer meet the criteria to remain a foreign private issuer and are therefore required to comply with U.S.

domestic issuer requirements, which apply to us effective from July 1, 2023.

The regulatory and compliance costs to us under U.S.

securities laws as a U.S.

domestic issuer may be significantly more than costs we incurred as a foreign private issuer.

We are now required to file periodic reports and registration statements on U.S domestic issuer forms with the SEC, which are more detailed and extensive in certain respects than the forms available to a foreign private issuer.

We are required under current SEC rules to prepare our consolidated financial statements in accordance with U.S.

GAAP as opposed to the International Financial Reporting Standards (“IFRS”).

Such conversion and modifications incurred additional one-time costs to present our financial statements retrospectively.

In addition, we have lost our ability to rely upon exemptions from certain requirements related to the preparation and solicitation of proxies (including compliance with full disclosure obligations regarding executive compensation in proxy statements) and the exemption from filing beneficial ownership reports under Section 16.

We expect the loss of our foreign private issuer status will increase our future legal and financial compliance costs and will make some activities more time-consuming and costly.

Additionally, we qualify as a “smaller reporting company” as defined in Item 10(f)(1) of Regulation S-K.

Smaller reporting companies may take advantage of certain reduced disclosure obligations, including, among other things, providing only two years of audited financial statements.

We may take advantage of certain scaled disclosures available to smaller reporting companies for so long as we qualify as a smaller reporting company.

To the extent we take advantage of such reduced disclosure obligations, it may also make comparison of our financial statements with other public companies difficult or impossible.

We incur increased costs and demands upon management as a result of complying with the laws and regulations affecting public companies.

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Moreover, if we are not able to comply with the requirements of Section 404 applicable to us in a timely manner, or if we or our independent registered public accounting firm identify deficiencies in our internal control over financial reporting that are deemed to be material weaknesses, the market price of our shares could decline and we could be subject to sanctions or investigations by the SEC or other regulatory authorities, which would require additional financial and management resources.

Furthermore, investor perceptions of our company may suffer if deficiencies are found, and this could cause a decline in the market price of our common shares.

Furthermore, investor perceptions of the Company may suffer if deficiencies are found, and this could cause a decline in the market price of our common shares.

Irrespective of compliance with Section 404, any failure of our internal control over financial reporting could have a material adverse effect on our stated operating results and harm our reputation.

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If we are unable to maintain effective internal control over financial reporting, our results of operations and the price of our common shares could be adversely affected.

During the audits for our fiscal years ended June 30, 2023, 2022, and 2021, we and our independent registered public accounting firms identified a material weakness in our internal control over financial reporting related to the accounting for complex non-routine transactions.

Specifically, there was a design deficiency due to the lack of sufficient experienced accounting professionals to review the accounting for complex non-routine transactions which resulted in us not accounting for certain adjustments properly as part of our conversion from IFRS to U.S.

We cannot assure you that the measures we have taken to date, and actions we may take in the future, will prevent potential future material weaknesses.

We cannot assure investors that the measures we have taken to date, and actions we may take in the future, will prevent potential future material weaknesses.

In addition, our independent registered public accounting firm has not performed an evaluation of our internal control over financial reporting in accordance with the provisions of the Sarbanes-Oxley Act because no such evaluation has been required to date.

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Failure to comply with Section 404 or to implement required new or improved controls, or difficulties encountered in their implementation, could harm our operating results or cause us to fail to meet our reporting obligations could potentially result in a loss in investor confidence in our reported financial information and subject us to sanctions or investigations by regulatory authorities.

If we are unable to successfully remediate this or an any future material weaknesses in our internal control over financial reporting or identify any additional material weaknesses, the accuracy and timing of our financial reporting may be adversely affected, we may be unable to maintain compliance with securities law requirements

regarding timely filing of periodic reports and applicable stock exchange listing requirements, investors may lose confidence in our financial reporting, and our share price may decline as a result.

See “Item 9A.

Controls and Procedures” for information on the material weakness that was identified as of June 30, 2023, which has been remediated as of June 30, 2024.

If we are unable to successfully remediate any future material weaknesses in our internal control over financial reporting or identify any additional material weaknesses, the accuracy and timing of our financial reporting may be adversely affected, we may be unable to maintain compliance with securities law requirements regarding timely filing of periodic reports and applicable stock exchange listing requirements, investors may lose confidence in our financial reporting, and our share price may decline as a result.

holders of our common shares may suffer adverse U.S.

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These sales, or the perception in the market that the holders of a large number of shares intend to sell shares, could reduce the market price of our common shares.

As of September 1, 2023, we have 18,303,853 outstanding common shares.

Certain of our security holders have rights, subject to some conditions, to require us to file registration statements covering common shares that it holds or to include their shares in registration statements that we may file for ourselves or for other shareholders.

As of August 30, 2024, we have 16,803,198 outstanding common shares.

Certain of our security holders have rights, subject to some conditions, to require us to file registration statements covering common shares that they hold or to include their shares in registration statements that we may file for ourselves or for other shareholders.

Anti-takeover provisions in our bye-laws could make an acquisition of us, which may be beneficial to our shareholders, more difficult and may prevent attempts by our shareholders to replace or remove our current management.

Provisions in our bye-laws may delay or prevent an acquisition of us or a change in our management.

In addition, by making it more difficult for shareholders to replace members of our board of directors, these provisions also may frustrate or prevent any attempts by our shareholders to replace or remove our current management because our board of directors is responsible for appointing the members of our management team.

In addition, by making it more difficult for shareholders to replace members of the Board, these provisions also may frustrate or prevent any attempts by our shareholders to replace or remove our current management because the Board is responsible for appointing the members of our management team.

These provisions include:

• the ability of our board of directors to determine the rights, preferences and privileges of our preferred shares and to issue the preferred shares without shareholder approval;

• the ability of the Board to determine the rights, preferences and privileges of our preferred shares and to issue the preferred shares without shareholder approval;

• the ability of our major shareholder (i.e., a shareholder holding 50% or more;

in the absence of such a holder, 25% or more) to appoint directors to the Board.

in the absence of such a holder, 25% or more) to appoint a majority of directors to the Board.

These provisions could make it more difficult for a third party to acquire us, even if the third party’s offer may be considered beneficial by many shareholders.

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Our common shares may be subordinate to classes of preferred shares issued in the future in the payment of dividends and other distributions made with respect to the common shares, including distributions upon liquidation or dissolution.

Our board of directors is authorized to issue preferred shares without first obtaining shareholder approval.

If we issue preferred shares, it will create additional securities that may have dividend or

liquidation preferences senior to the common shares.

The Board is authorized to issue preferred shares without first obtaining shareholder approval.

If we issue preferred shares, it will create additional securities that may have dividend or liquidation preferences senior to our common shares.

If we issue convertible preferred shares, a subsequent conversion may dilute the current common shareholders’ interest.

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• publication of research reports by securities analysts about us or our competitors in our industry;

• failure of securities analysts to initiate or maintain coverage of us, changes in ratings and financial estimates and the publication of other news by any securities analysts who follow our company, or our failure to meet these estimates or the expectations of investors;

• failure of securities analysts to initiate or maintain coverage of us, changes in ratings and financial estimates and the publication of other news by any securities analysts who follow the Company, or our failure to meet these estimates or the expectations of investors;

• our failure or the failure of our competitors to meet analysts’ projections or guidance that we or our competitors may give to the market;

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Accordingly, investors may only realize future gains on their investments if the price of their common shares increases, which may never occur.

We have never declared or paid any dividends, other than (i) a dividend declared by one of our subsidiaries during the fiscal year ended June 30, 2017, the remaining $1.6 million of which was paid during the fiscal year ended June 30, 2019, and (ii) on July 21, 2020, our board of directors approved a one-time dividend of $4.0 million to our shareholders reflecting a portion of the cash generation from the business during fiscal year 2020.

We have never declared or paid any dividends since becoming a public company in August 2020.

We currently do not plan to declare dividends on our common shares in the foreseeable future.

We currently intend to retain all of our future earnings, if any, to finance the growth and development of our business.

The payment of dividends, if any, would be at the discretion of our board of directors and would depend on our results of operations, capital requirements, financial condition, prospects, contractual arrangements, any limitations on payment of dividends present in our current and future debt agreements and other factors that our board of directors may deem relevant.

Accordingly, if our board of directors deems it appropriate not to pay any dividends, our investors may only realize future gains on their investments if the price of their common shares increases, which may never occur.

UNRESOLVED STAFF COMMENTS

The payment of dividends, if any, would be at the discretion of the Board and would depend on our results of operations, capital requirements, financial condition, prospects, contractual arrangements, any limitations on payment of dividends present in our current and future debt agreements and other factors that the Board may deem relevant.

Accordingly, if the Board deems it appropriate not to pay any dividends, our investors may only realize future gains on their investments if the price of their common shares increases, which may never occur.

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-K

Item 1A. Risk Factors