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Item 1A. Risk Factors

2025-09-11 compared with 2024-09-12 · 58 added, 93 removed, 486 unchanged (24% of the section changed)

We are subject to certain material risks and uncertainties described below that make an investment in us speculative or risky, in addition to other information provided in this Form 10-K.

We are subject to certain material risks and uncertainties described below that make an investment in us speculative or risky, in addition to other information provided in this Form 10-K, which you should consider carefully in evaluating our business.

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.

Some of the factors, events, and contingencies discussed below may have occurred in the past, but the disclosures below are not representations as to whether or not the factors, events, or uncertainties have occurred in the past and instead reflect our beliefs and opinions as to the factors, events, or uncertainties that could materially and adversely affect us in the future.

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.

Therefore, you should not consider the following risks to be a complete statement of all the potential risks or uncertainties that we face.

Business Risks

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In certain cases, we have committed to pricing over the period of a contract with limited-to-no sharing of risks regarding inflation and currency exchange rates.

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.

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.

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, 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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There can be no assurance these efforts will be adequate to meet our future needs or to maintain our competitiveness, nor that we will have sufficient capacity or capital to meet these challenges.

If we are unable or fail to further refine and enhance our solutions or to anticipate innovation opportunities and keep pace with evolving technologies, our solutions could become noncompetitive or obsolete and as a result we may be less attractive to existing and new clients, our clients may terminate their relationship with us or choose to divert their business elsewhere, and our revenue and market share may decline as a result.

If we are unable or fail to further refine and enhance our solutions or to anticipate innovation opportunities and keep pace with evolving technologies, including AI, our solutions could become noncompetitive or obsolete and as a result we may be less attractive to existing and new clients, our clients may terminate their relationship with us or choose to divert their business elsewhere, and our revenue and market share may decline as a result.

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.

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Even if the rate at which we convert visitors to customers or subscribers declines, the marketing and lead generation costs that have already been incurred are unlikely to decline correspondingly.

Therefore, such a decline in conversion rate of consumers visiting our customer acquisition websites is likely to result in reduced revenue and a further reduced margin.

Therefore, such a

decline in conversion rate of consumers visiting our customer acquisition websites is likely to result in reduced revenue and a further reduced margin.

We face substantial competition in our business.

The market in which we compete, which is comprised of the customer acquisition, customer engagement and customer experience management market segments, is highly fragmented and continuously evolving.

We face competition from a variety of companies, including some of our own clients, which operate in distinct segments

of the customer lifecycle journey.

We face competition from a variety of companies, including some of our own clients, which operate in distinct segments of the customer lifecycle journey.

These segments are very competitive, and we expect competition to remain intense from a number of sources in the future.

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Any of our intellectual property rights may be challenged by others or invalidated through administrative process or litigation.

Furthermore, legal

standards relating to the validity, enforceability and scope of protection of intellectual property rights are uncertain.

Furthermore, legal standards relating to the validity, enforceability and scope of protection of intellectual property rights are uncertain.

Despite our precautions, it may be possible for unauthorized third parties to copy our technology and use information that we regard as proprietary to create products and services that compete with our solutions.

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Our operating results may fluctuate from quarter to quarter due to various factors.

Our operating results may vary significantly from one quarter to the next and our business may be impacted by factors such as client loss, the timing of new contracts and of new product or service offerings, termination of existing contracts, variations in the volume of business from clients resulting from changes in our clients’ operations, the business decisions of our clients regarding the use of our solutions, start-up costs, delays or difficulties in expanding our operating facilities and infrastructure, delays or difficulties in recruiting, changes to our revenue mix or to our pricing structure or that of our competitors, inaccurate estimates of resources and time required to complete ongoing projects, currency fluctuation and seasonal changes in the operations of our clients.

time required to complete ongoing projects, currency fluctuation and seasonal changes in the operations of our clients.

The financial benefit of gaining a new client may not be recognized at the intended time due to delays in the implementation of our solutions or negatively impacted due to an increase in the start-up costs.

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

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.

Global economic conditions, including inflation, rising interest rates, recession, and foreign exchange fluctuations, affect us and/ or 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.

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Our existing debt covenants may affect our flexibility in operating, developing and expanding our business.

Our main financing arrangement contains certain covenants and restrictions including limits on our ability and our subsidiaries’ ability to incur additional debt, pay dividends and make certain investments.

Our main financing arrangements contains certain covenants in respect of a total net leverage ratio and fixed charge coverage ratio, and restrictions on incurring additional debt and liens, making certain restricted payments and investments, engaging in certain transactions with affiliates, and disposal of assets.

Complying with these covenants may cause us to take actions that make it more difficult to successfully execute our business strategy and we may face competition from companies not subject to such restrictions.

Moreover, our failure to comply with these covenants could result in an event of default or refusal by our creditors to renew certain of our loans which may have a material adverse effect on our business, financial condition, results of operation and prospects.

Moreover, our

failure to comply with these covenants could result in an event of default or refusal by our creditors to renew certain of our loans which may have a material adverse effect on our business, financial condition, results of operation and prospects.

If our goodwill or intangible assets become impaired, we could be required to record a significant charge to earnings.

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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.

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

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.

During the year ended June 30, 2025, we determined that the estimated fair value of one of our trademarks no longer exceeded its carrying value and recognized an impairment loss of $0.3 million during the year ended June 30, 2025.

We did not recognize any impairment of goodwill during the year ended June 30, 2025.

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

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state or foreign income tax liability.

Operational Risk

Operational Risks

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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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.

We are developing internal governance frameworks to assess and monitor our use of AI and the risks associated with its implementation, including review of third-party AI systems.

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

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If we fail to maintain good relations with our employees, we could suffer a strike or other significant work stoppage or other form of industrial action, which could harm us.

We may not be able to retain our key personnel or recruit skilled personnel with appropriate qualifications and experience, or to attract, train, and integrate personnel with necessary experience and skills.

We may not be able to retain our key personnel or recruit skilled personnel with appropriate

qualifications and experience, or to attract, train, and integrate personnel with necessary experience and skills.

The outsourcing industry experiences high employee turnover.

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We may also need to increase employee compensation more than in previous periods to remain competitive in attracting the quantity and quality of employees that our business requires.

For the fiscal year ended June 30, 2024, payroll and related costs and share-based compensation expense accounted for $338 million, or 67%, of our revenue.

For the fiscal year ended June 30, 2025, payroll and related costs and stock-based compensation expense accounted for $367 million, or 66%, of our revenue.

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.

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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.

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.

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.

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

We may expand our global operations to maintain an appropriate cost structure and meet our clients’ needs.

We have expanded and may continue to expand our global operations to maintain an appropriate cost structure and meet our clients’ needs.

This may involve expanding into countries other than those in which we currently operate and where we have less familiarity with local procedures.

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This may affect our relationships with our clients.

If we expand our operations into new jurisdictions, we may be subject to increased operating costs, including higher employee compensation expenses in these new jurisdictions relative to our current operating costs.

We have entered into certain related-party transactions and may continue to rely on related parties for certain key development and support activities.

We have entered into, and may continue to enter into, transactions with affiliates of The Resource Group Limited (“TRGI”) for corporate and operational services.

Such transactions may not have been entered into on an arm’s-length basis, and we may have achieved more favorable terms because such transactions were entered into with our related parties.

We rely on, and will continue to rely on, our related parties to maintain these services.

If the pricing for these services changes, or if our related parties cease to provide these services, including by terminating agreements with us, we may be unable to obtain replacements for these services on the same terms without disruption to our business.

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

We may also be subject to increased operating costs, including higher employee compensation expenses in these new jurisdictions relative to our current operating costs.

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.

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Laws in these and other countries are continuing to evolve.

Any actual or perceived failure to safeguard personal information or other information in our possession or control, appropriately destroy or redact such data, or otherwise comply with these regulations may subject us to litigation, regulatory investigations, or enforcement actions, thus causing damage to our reputation and adversely affect our ability to attract or retain customers.

investigations, or enforcement actions, thus causing damage to our reputation and adversely affect our ability to attract or retain customers.

• Telecommunications Laws.

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

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 care.

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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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.

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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 (the “Inflation Reduction Act”), 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.

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 the end of 2024.

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.

The OECD continues to release additional guidance on the two-pillar framework and widespread implementation is anticipated by the end of 2025.

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

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

Entities subject to tax under the Bermuda CIT Act are 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.

Although the commencement date of the Bermuda CIT Act was 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.

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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.

The Bermuda Minister of Finance, under the Exempted Undertakings Tax Protection Act 1966 of Bermuda, as amended, has given us assurances that if any legislation is enacted in Bermuda that would impose tax computed on profits or income, or computed on any capital asset, gain or appreciation, or any tax in the nature of estate duty or inheritance tax, then the imposition of any such tax will not be applicable to us or any of our operations, shares, debentures or other obligations until March 31, 2035, except insofar as such tax applies to persons ordinarily residing in Bermuda or to any taxes payable by us in respect of real property owned or leased by us in Bermuda.

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.

We will become subject to corporate income taxes in Bermuda once revenues exceed €750 million.

Due to the enactment of the Bermuda CIT Act, we will be subject to the 15% tax rate once consolidated revenues exceed €750 million in two of the four previous fiscal years.

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.

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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.

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.

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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Risks Related to Our Common Shares

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.

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.

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 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.

Our executive officers, directors and shareholders owning more than 5% of our outstanding common shares, which we refer to as our principal shareholders, beneficially own shares representing greater than 50% of our outstanding common shares as of June 30, 2024.

As a result, if some or all of these shareholders were to choose to act together, they would be able to control all matters submitted to our shareholders for approval, as well as our management and affairs.

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 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.

As of June 30, 2024, TRG Pakistan Limited (“TRGP”), a publicly traded Pakistan corporation listed on the Pakistan Stock Exchange, beneficially owned 45% of TRGI’s outstanding voting securities (with an ability to vote up to 69% of TRGI’s total voting securities with the consent of the chief executive officer of TRGI).

In addition, while TRGI has voting and dispositive control over its ibex shares, TRGP holds the economic interest in those shares.

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 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.

The TRGI Stockholder’s Agreement will remain in effect until the date that TRGI ceases to hold 10% or more of all shares issued by us, as measured on an as-converted basis.

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 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.

We cannot take certain actions without the consent of one of our shareholders, The Resource Group International Limited, which could limit our other shareholders' ability to influence the outcome of key transactions, including any change of control.

As of June 30, 2025, The Resource Group International Limited ("TRGI"), beneficially owns, in the aggregate, approximately 13% of our outstanding common shares.

In addition, 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.

The TRGI Stockholder's Agreement will remain in effect until the date that TRGI holds less than 10% of all shares issued by us.

TRGI may have interests that differ from interests of our other shareholders and TRGI may withhold or grant its consent to such enumerated actions in a way with which our other shareholders disagree and that may be adverse to our other shareholders' interests.

For example, pursuant to such consent right, TRGI may delay, prevent, or deter 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 the Company and may adversely affect the market price of our common shares.

Our future earnings and earnings per share could be adversely impacted by the Amazon Warrant and if Amazon exercises its right to acquire our common shares pursuant to the Amazon Warrant, it will dilute the ownership interests of our then-existing shareholders and could adversely affect the market price of our common shares.

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% 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.

A total of 1,171,812 warrant shares vested on the satisfaction of specified milestones tied to Amazon’s purchase of services from the Company during the vesting period, which ended on June 30, 2024.

The Amazon Warrant increases the number of diluted shares reported, which has an effect on our fully diluted earnings per share.

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the issuance, in any three-year period, by us of more than $1.0 billion in non-convertible debt securities;

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

and June 30, 2026 - 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 to our shareholders may be different than investors might get from other public companies in which they hold equity interests.

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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.

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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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;

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

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.

While currently there is no 25% or more shareholder, should one arise, 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.

As a result, shareholders may be limited in their ability to obtain a premium for their shares.

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The stock market in general, and the market for equities of newer public companies in particular, have been highly volatile.

As a result, the market price of our common shares is likely to be similarly volatile, and investors in our common shares may experience a decrease, which could be substantial, in the value of their common shares, including decreases unrelated to our operating performance or prospects, or a complete loss of their investment.

As a result, the market price of our common shares is likely to be similarly volatile, and investors

in our common shares may experience a decrease, which could be substantial, in the value of their common shares, including decreases unrelated to our operating performance or prospects, or a complete loss of their investment.

The price of our common shares could be subject to significant fluctuations in response to a number of factors, including those listed elsewhere in this “Risk Factors” section and others such as:

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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