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, 2025,
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,
2025.
We
may
identify
additional
errors
related
to
our
Value
Added
Tax
(VAT)
processes,
indirect
tax
positions,
or
similar
transaction-level tax matters, which could require future adjustments to
our financial statements.
During the current quarter we identified errors in the
historical VAT
treatment of certain gaming voucher transactions within our
Merchant business. Although we have completed an
initial review of the matter and
determined to correct the identified errors through
revisions to our previously issued
financial statement, our review
is ongoing.
Refer to Note 1
to our unaudited condensed
consolidated
financial statements for
additional information.
The error arose from
the incorrect application
of indirect tax
rules, the configuration
of underlying systems, and operational practices involving downstream vendors.
While we
are implementing
remedial actions,
enhancing controls,
and conducting
further analyses
with our
external advisors,
there is a risk that we have
not yet identified all errors associated with
this matter. Additional issues may be discovered as we continue
to evaluate historical periods, refine our technical tax conclusions, or integrate updated processes into our systems. Moreover,
similar
errors
could exist
in accounting
and reporting
for other
indirect tax
transactions
particularly
where
our business
involves
complex
multi-party arrangements, voucher products, commissions, or activities involving
non-registered VAT
vendors.
Identification
of
additional
errors
may
require
us
to
record
further
adjustments,
amend
or
restate
previously
issued
financial
statements, update
our tax
filings, or make
additional payments of
tax, penalties,
or interest. Any
such developments
could result
in
increased
compliance
costs,
additional
administrative
burdens,
diversion
of
management
attention,
or
investor
perceptions
of
weaknesses
in
our
financial
reporting
or
tax
compliance
processes.
If
material,
additional
errors
could
also
adversely
affect
our
financial condition, results of operations, liquidity,
or internal control over financial reporting.
Our failure to prepare
and timely file
our periodic reports
with the SEC limits
our access to
the public markets
to raise debt
or equity capital.
Form S-3 permits eligible
issuers to conduct registered
offerings using a short
form registration statement that
allows the issuer
to incorporate
by reference its
past and future
filings and reports
made under the
Securities Exchange
Act of 1934,
as amended
(the
“Exchange Act”).
In addition,
Form S-3
enables eligible
issuers to
conduct primary
offerings “off
the shelf”
under Rule
415 of
the
Securities
Act
of
1933,
as
amended
(the
“Securities
Act”).
The
shelf
registration
process,
combined
with
the
ability
to
forward
incorporate information, allows issuers to avoid delays and
interruptions in the offering process and to access the capital markets
in a
more expeditious
and efficient
manner than
raising capital
in a
standard registered
offering pursuant
to a
Registration Statement
on
Form S-1. The ability to register securities for resale may also be limited as a result
of the loss of Form S-3 eligibility.
We
did
not
file
our
2025
Form
10-K
within
the
timeframe
required
by
the
SEC;
thus,
we
have
not
remained
current
in
our
reporting requirements
with the
SEC. Although
we regained
status as
a current
filer by
filing our
Form 10-K/A
to amend
our 2025
Form 10-K, we are currently ineligible to file new short form registration statements on Form S-3 and, absent a waiver of the Form S-
3 eligibility requirements, we are no longer permitted to use our existing registration statements on Form S-3. If we wish to pursue an
offering
now,
we
would
be
required
to conduct
the offering
on
an exempt
basis,
such
as in
accordance
with
Rule
144A,
or file
a
registration statement on Form
S-1. Using a Form
S-1 registration statement for
a public offering would
likely take significantly longer
than using a registration statement on Form S-3 and increase our transaction costs, and could, to the extent we are not able to conduct
offerings
using
alternative
methods,
adversely
impact
our
ability to
raise
capital
or
complete acquisitions
of
other
companies
in
a
timely manner.
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