Item 1A. Risk Factors
Item 1A. Risk Factors
See “Item
1A RISK
FACTORS”
in Part
I of
our Annual
Report on
Form 10-K
for the
fiscal year
ended June
30, 2023,
for a
discussion
of
risk
factors
relating
to
(i)
our
business,
(ii)
operating
in
South
Africa
and
other
foreign
markets,
(iii) government
regulation, and (iv) our common stock. Except
as set forth below, there have been no material
changes from the risk factors previously
disclosed in our Annual Report on Form 10-K for the fiscal year ended June 30,
2023.
Failure
to
complete,
or
delays
in
completing,
the
Adumo
acquisition,
could
materially
and
adversely
affect
our
results of
operations and stock price.
The completion
of the
Adumo acquisition
is subject to
a number of
conditions precedent,
including receipt
of shareholder
and
regulatory approvals and certain third-party consents. Some of these conditions
are outside our control.
We
will
need
to
obtain
approval
from
our
shareholders
to
issues
shares
of
our
common
stock
to
the
Adumo
sellers
as
part
consideration of the purchase price. Under the terms of the of the transaction agreement we need to obtained
this approval by no later
than October
31, 2024.
We
will need
to prepare
and provide
certain materials
to our
shareholders in
order for
them to
approve the
issuance of
the shares to
the Adumo sellers.
We
will need to
engage external
service providers
to assist us
with the
preparation and
distribution of these materials.
The transaction may fail if
we are unable to prepare
these materials in a timely manner
and obtain the
necessary shareholder approvals.
To
complete
the
acquisition,
we
must
make
certain
filings
with
and
obtain
certain
consents
and
approvals
from
various
governmental and regulatory authorities.
The regulatory approval processes may
take a lengthy period of time to complete,
and there
can be no assurance
as to the outcome
of the approval processes,
including the undertakings
and conditions that
may be required for
approval, or whether the regulatory approvals will be obtained at all.
In addition,
the completion
of the
acquisition is
conditional
on, among
other things,
no action
or circumstance
occurring that
would result in a material adverse effect on the Adumo’s
business operations or financial results.
We cannot
provide any assurance regarding if or
when all conditions precedent to the acquisition
will be satisfied or waived. If,
for any reason, the acquisition is
not completed, or its completion is materially
delayed and/or the transaction agreement is terminated,
the market price of our common stock may be materially and adversely
affected.
In addition, if the acquisition is not completed for any reason, there are risks that (i) the announcement of the acquisition and (ii)
the dedication
of management’s
attention and other
of our resources
to the completion
thereof, could
have a negative
impact on our
relationships with our stakeholders
and could have a material
adverse effect on
our current and future operations,
financial condition
and prospects.
We may not realize some
or all of the anticipated benefits from the Adumo acquisition.
Even if we complete the
Adumo acquisition, we may experience
unforeseen events, changes or
circumstances that may adversely
affect us. For example, we may incur unexpected costs, charges or expenses
resulting from the transaction, including charges to future
earnings if Adumo’s business
does not perform as expected. Our expectations regarding
Adumo’s business and prospects may not
be
realized,
including
as a
result
of
changes
in
the
financial
condition
of the
markets
that
Adumo
serves.
In
addition,
there
are
risks
associated with
Adumo’s
product and
service offerings
or results
of operations,
including the
risk of
failing to
comply with
certain
regulatory rules required to operate its business.
Further, there are
numerous challenges, risks
and costs
involved with integrating
the operations
of Adumo with
ours. For
example,
integrating Adumo into
our company will require
significant attention from our
senior management which
may divert their attention
from
our
day-to-day
business.
The
difficulties
of
integration
may
also
be
increased
by
cultural
differences
between
our
two
organizations and the necessity of retaining and integrating personnel,
including Adumo’s key employees.
Our Sarbanes-Oxley
Act of
2002 (“Sarbanes”)
management certification
and auditor
attestation regarding
the effectiveness
of
our internal
control over
financial reporting
as of
June 30,
2024, will
likely exclude
the operations
of Adumo,
as we
only expect
to
close the transaction in fiscal 2025.
The requirement to evaluate and report on our internal controls
also applies to companies that we
acquire. As a group of South
African private companies, Adumo is not required to
comply with Sarbanes prior to the
time we acquired
it.
The
integration
of
Adumo
into
our
internal
control
over
financial
reporting would
be
expected
to
require
significant
time
and
resources
from
our
management
and
other
personnel
and
is
expected
to
increase
our
compliance
costs.
If
we
fail
to
successfully
integrate the operations of Adumo into our internal control over
financial reporting for fiscal 2025, our internal control over financial
reporting may not be effective.
If some or all
of the aforementioned or
other risks materialize, our
ability to realize the
anticipated benefits of
Adumo could be
materially impaired, and as a result, our financial condition, results of operations,
cash flows and stock price could suffer.
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