11 unchanged sentences
• Future net revenue growth depends on our ability to retain existing customers, drive increased TPV on our platform, and attract new customers in a cost-effective manner.
−Removed: • We participate in markets that are competitive and continuously evolving, and if we do not compete effectively with established companies and new market entrants, our business, results of operations, and financial condition could be adversely affected.
−Removed: • We currently generate significant net revenue from our largest Customer, Block, Inc., or Block, and the loss or decline in net revenue from Block could adversely affect our business, results of operations, and financial condition.
+Added: • We participate in markets that are competitive and continuously evolving, and if we do not compete successfully with established companies and new market entrants, our business, results of operations, financial condition, and future prospects could be materially and adversely affected.
+Added: • We currently generate significant net revenue from a small number of customers, including our largest customer, Block, and the loss of any of these significant relationships or decline in net revenue from these customers, including as a result of renewals on less favorable terms, could adversely affect our business, results of operations, financial condition, and future prospects.
• Our recent growth, ongoing changes in our industry, and our transaction mix make it difficult to forecast our net revenue and evaluate our business and future prospects.
−Removed: • We have a history of net losses, we anticipate increasing operating expenses in the future, and we may not be able to achieve profitability.
−Removed: • We may experience annual or quarterly fluctuations in our results of operations due to a number of factors that make our future results difficult to predict and could cause our results of operations to fall below analyst or investor expectations.
−Removed: • The global COVID-19 pandemic could adversely affect our business, results of operations, and financial condition.
+Added: • We have a history of net losses, we anticipate increasing operating expenses in the future, and we may not be able to achieve or sustain profitability.
+Added: • We may experience significant annual or quarterly fluctuations in our results of operations due to a number of factors that make our future results difficult to predict and could cause our results of operations to fall below analyst or investor expectations.
• Our business relies on our relationships with Issuing Banks and Card Networks, and if we are unable to maintain these relationships, our business may be adversely affected.
−Removed: Further, any changes to the rules or practices set by Card Networks, including changes in Interchange Fees, could adversely affect our business.
−Removed: • There has been a limited public market for our Class A common stock, the trading price of our Class A common stock has been and is likely to continue to be volatile or may decline regardless of our operating performance, and you may not be able to resell your shares at or above the price at which you purchased such shares.
−Removed: • The dual class structure of our common stock has the effect of concentrating voting control with those stockholders who hold shares of our Class B common stock, including our directors, executive officers, and their respective affiliates.
−Removed: This ownership limits or precludes your ability to influence corporate matters, including the election of directors, amendments of our organizational documents, and any merger, consolidation, sale of all or substantially all of our assets, or other major corporate transaction requiring stockholder approval, and that may depress the trading price of our Class A common stock.
+Added: Further, any changes to the rules or practices set by Card Networks, including changes in Card Network fees or Interchange Fees, or our handling of such fees, could adversely affect our business.
+Added: • The trading price of our Class A common stock has been and is likely to continue to be volatile, which could cause the value or your investment to decline.
+Added: • The dual class structure of our common stock has the effect of concentrating voting control with those stockholders who hold shares of our Class B common stock, including our directors, executive officers, and their affiliates.
+Added: As a result of the dual class structure of our common stock, the trading price of our Class A common stock may be depressed.
Risks Relating to Our Business and Industry
We have experienced rapid net revenue growth in recent periods and our recent net revenue growth rates may not be indicative of our future net revenue growth.
−Removed: We have experienced rapid growth in recent periods.
Our total net revenue was $748.2 million, $517.2 million and $290.3 million for the years ended December 31, 2022, 2021, and 2020, respectively, an increase of 45% and 78% from the prior years, respectively.
−Removed: In future periods, we may not be able to sustain net revenue growth consistent with recent history, or at all.
−Removed: Further, because we operate in an evolving payments industry, our ability to grow and innovate is important to our success.
+Added: Our TPV was $166.3 billion, $111.1 billion and $60.1 billion for the years ended December 31, 2022, 2021, and 2020, respectively, an increase of 50% and 85% from the prior years, respectively.
+Added: We may not be able to sustain our net revenue and TPV growth rates, or the growth rate of related key operating metrics.
We believe our net revenue growth depends on several factors, including, but not limited to, our ability to:
−Removed: • acquire new Customers and retain existing Customers;
−Removed: • achieve widespread acceptance and use of our Platform and the services we offer;
+Added: • acquire new customers and retain existing customers on favorable terms;
+Added: • achieve widespread acceptance and use of our platform and the products and services we offer, including in markets outside of the United States;
• increase the use of our platform and our offerings, TPV, and the number of transactions on our platform;
−Removed: • effectively scale our operations while maintaining high levels of service and Customer satisfaction;
−Removed: • maintain and increase our net revenue and gross profit by continuing to innovate and expanding our product and service offerings;
+Added: • effectively scale our operations;
+Added: • expand our product and service offerings;
• diversify our customer base;
−Removed: • maintain and grow our network of vendors and partners, including Issuing Banks, Card Networks, and other vendors and partners;
+Added: • maintain and grow our network of vendors and partners, including Issuing Banks and Card Networks;
• hire and retain talented employees at all levels of our business;
2 unchanged sentences
• adapt to changing macroeconomic conditions and evolving conditions in the payments industry;
−Removed: • introduce and grow widespread adoption of our Platform in new markets outside of the United States;
−Removed: • successfully compete against established companies and new market entrants, including legacy issuing platforms and modern payments technology companies.
−Removed: If we are unable to accomplish these objectives, our net revenue growth may be adversely affected.
−Removed: We also expect our operating expenses to increase in future periods, and if our net revenue growth does not increase to offset these anticipated increases in our operating expenses, our business, results of operations, and financial condition will be adversely affected, and we may not be able to achieve profitability.
−Removed: We have also encountered in the past, and expect to encounter in the future, risks and uncertainties frequently experienced by growing companies in evolving industries as further detailed in these “Risk Factors.” If our assumptions regarding these risks and uncertainties, which we use to plan and operate our business, are incorrect or change, or if we do not address these risks successfully, our growth rates may slow and our business would suffer.
−Removed: In the near term, we expect our TPV and net revenue growth rates to be variable as a result of the COVID-19 pandemic, including the continued spread and evolution of COVID-19, and we are unable to predict the duration, degree, or volatility of future growth with any certainty.
+Added: • successfully compete against established companies and new market entrants.
+Added: Net revenue, TPV or key operating metrics for any prior quarterly or annual period should not be relied on as an indication of our future performance.
+Added: If our net revenue and TPV growth rates decline, we may not achieve profitability as expected, and our business, financial condition, results of operations, and the price of our Class A common stock would be adversely affected.
If we fail to manage our growth effectively, we may be unable to execute our business plan or maintain high levels of customer service and satisfaction, and our business, results of operations, and financial condition could be adversely affected.
1 unchanged sentence
For example, our workforce has grown to 958 employees as of December 31, 2022 from 789 employees as of December 31, 2021.
−Removed: We have offices in the United Kingdom, or U.K., and Australia, and a presence in Singapore, and we plan to continue to expand our international presence and operations into other countries in the future.
+Added: We have offices in the United States, United Kingdom, or U.K., and Australia, and legal entities in Canada, Singapore and Brazil, and we plan to continue to expand our international footprint and operations into other countries in the future.
We have also historically experienced significant growth in the number of customers using our platform, the number of card programs and solutions we manage for our customers, and TPV on our platform.
2 unchanged sentences
We also believe that our corporate culture has been and will continue to be a valuable component of our success.
+Added: We have moved to a flexible-first approach to work, meaning our employees are able to choose whether they work at home or, depending on where they live, in one of our office locations.
As we expand our business and mature as a public company, we may find it difficult to maintain our corporate culture while managing this growth as our employees and other service providers increasingly work from geographic areas across the globe.
Failure to manage our anticipated growth and organizational changes in a manner that preserves the key aspects of our culture could reduce our ability to recruit and retain personnel, innovate, operate effectively, and execute on our business strategy, potentially adversely affecting our business, results of operations, and financial condition.
−Removed: Additionally, as a result of the COVID-19 pandemic, our global workforce has been working remotely or in hybrid settings, with expected future phased office re-openings potentially limiting our employees’ ability to perform certain job functions and, over time, negatively impacting corporate culture.
Further, as more of our employees are located in new jurisdictions, we will be required to invest resources and to monitor continually changing local regulations and requirements, and we may experience a resulting increase in our expenses, decrease in employee productivity, and changes in our corporate culture.
+Added: We have in the past, and may in the future, experience high attrition and turnover rates across the Company.
+Added: The loss of these employees may lead to a decrease in institutional knowledge which may adversely affect our ability to expand our business.
In addition, as we expand our business, it is important that we continue to maintain a high level of customer service and satisfaction.
2 unchanged sentences
Future net revenue growth depends on our ability to retain existing customers, drive increased TPV on our platform, and attract new customers in a cost-effective manner.
+Added: If we are unable to attract new customers, retain existing customers on favorable terms, and grow and develop our relationships with new and existing customers, our business, results of operations, financial condition, and future prospects would be materially and adversely affected, as could the market price of our Class A common stock.
Our net revenue growth substantially depends on our ability to maintain and grow our relationships with existing customers and increase the volume of transactions processed on our platform.
−Removed: If our prospective Customers do not recognize, or our existing Customers do not continue to recognize, the need for and benefits of our Platform and our products, they may decide to adopt alternative products and services to satisfy their business needs.
To grow our business and extend our market position, we intend to focus on educating potential customers about the benefits of our platform, expanding the capabilities of our platform and our product offerings, and bringing new products and services to market to increase market acceptance and use of our platform.
+Added: If our prospective customers do not recognize, or our existing customers do not continue to recognize, the need for and benefits of our platform and our products, they may decide to adopt alternative products and services to satisfy their business needs.
Some of our customer contracts provide for a termination clause that allows our customers to terminate their contract at any time following a limited notice period.
In addition, our customers generally are not subject to any minimum volume commitments under their contracts and have no obligation to continue using our platform, products, or services.
−Removed: We cannot assure you that Customers will continue to use our Platform or that we will be able to continue processing transactions on our Platform at the same rate as we have in the past.
+Added: Accordingly, these customers may have, or may enter into in the future, similar agreements with our competitors, which could adversely affect our ability to drive the level of processing volume and revenue growth that we seek to achieve.
Customers may terminate or reduce their use of our platform for any number of reasons, including their level of satisfaction with our products and services, the effectiveness of our support services, our pricing and the pricing and quality of competing products or services, or the effects of global economic conditions.
1 unchanged sentence
Our growth may decline in the future if customers are not satisfied with our platform or our ability to meet our customers’ needs and expectations.
−Removed: Further, the complexity and costs associated with switching processing volume to our competitors may not ultimately prevent a Customer from switching to another provider.
+Added: The complexity and costs associated with switching processing volume to our competitors may not ultimately prevent a customer from switching to another provider.
To achieve continued growth, we must not only maintain our relationships with our existing customers, but also encourage them to increase adoption and usage of our products.
For example, customers can have multiple card programs on our platform across different use cases and geographies.
−Removed: If Customers do not renew their contracts or broaden their use of our services, our growth may slow or stop and our business, results of operations, and financial condition may be materially and adversely affected.
+Added: If customers do not renew their contracts or broaden their use of our services, or do not renew on favorable terms, our growth may slow or stop and our business, results of operations, and financial condition may be materially and adversely affected.
+Added: We cannot assure you that customers will continue to use our platform or that we will be able to continue processing transactions on our platform at the same rate as we have in the past.
In addition to capitalizing on the potential net revenue embedded within our existing customer base, we must continue to attract new customers to promote growth.
6 unchanged sentences
If we fail to attract new customers, including customers in new use cases, industry verticals, and geographies, and to expand our platform in a way that serves the needs of these new customers, and to onboard them quickly, then we may not be able to continue to grow our net revenue.
−Removed: We participate in markets that are competitive and continuously evolving, and if we do not compete effectively with established companies and new market entrants, our business, results of operations, and financial condition could be adversely affected.
+Added: We participate in markets that are competitive and continuously evolving, and if we do not compete successfully with established companies and new market entrants, our business, results of operations, and financial condition, and future prospects could be materially and adversely affected.
+Added: We operate in a highly competitive and dynamic industry.
We were founded in 2010, and we provide a single, global, cloud-based, open-API platform for modern card issuing and payment processing.
−Removed: We provide card issuing, payment processing, risk management, data insights, and a variety of controls, customizations, and features through our Platform.
−Removed: Our modern card issuing Platform is situated in the evolving financial technology and payments industries that are intensely competitive and subject to rapidly evolving technology, shifting customer needs, new market entrants, and introductions of new products and services.
−Removed: We face competition along several dimensions, including providers with legacy technology platforms, such as Global Payments (TSYS), Fiserv, and Fidelity National Information Services;
−Removed: vertical-focused providers, such as Wex and Comdata;
+Added: We face competition along several dimensions, including providers with legacy technology platforms, such as Fidelity National Information Services (FIS), Fiserv, and Global Payments (TSYS);
+Added: legacy API-based providers, such as Galileo, i2c, and Visa DPS;
and emerging providers, such as Adyen and Stripe.
4 unchanged sentences
Such competitors with greater financial and operating resources may be able to respond more quickly and effectively than we can to new or changing opportunities, technologies, standards, customer requirements, or regulatory developments.
−Removed: In addition, there has been a recent increase in large merger and acquisition transactions in the payments industry, and future mergers and acquisitions by these companies may lead to even larger competitors with more resources.
−Removed: Conditions in our markets could also change rapidly and significantly as a result of technological advancements, partnering by our competitors, or continuing market consolidation, and it is uncertain how our markets will evolve.
−Removed: New commerce disruptors or large financial institutions that are making significant investments in research and development may develop similar or superior products and technologies that compete with our Platform.
−Removed: Our existing and potential Customers also may choose to build some of the functionality our Platform provides, potentially limiting or eliminating their demand for our Platform.
−Removed: These competitive pressures in our markets or our failure to compete effectively may result in price reductions, fewer Customers, reduced net revenue, gross profit, and gross margins, increased net losses, loss of processing volume, and loss of market share.
−Removed: Any failure to meet and address these factors could adversely affect our business, results of operations, and financial condition.
−Removed: We currently generate significant net revenue from a small group of Customers, including our largest Customer, Block, and the loss or decline in net revenue from these customers, particularly Block, could adversely affect our business, results of operations, and financial condition.
+Added: We currently generate significant net revenue from a small number of customers, including our largest customer, Block, and the loss of any of these significant relationships or decline in net revenue from these customers, including as a result of renewals on less favorable terms, could adversely affect our business, results of operations, financial condition, and future prospects.
A small number of customers account for a large percentage of our net revenue.
2 unchanged sentences
Additionally, consolidation within our customers’ industries has accelerated in recent years, which has in turn increased the concentration of our customers, and these trends may continue.
−Removed: For example, Block, our largest Customer, announced in February 2022 that it had completed its acquisition of Afterpay Limited, which is also our Customer, and may increase the percentage of our net revenue represented by our largest Customer.
+Added: For example, Block, our largest customer, announced in January 2022 that it had completed its acquisition of our customer Afterpay Limited, which has and may continue to increase the percentage of our net revenue represented by our largest customer.
Furthermore, in the event that any of our largest customers stop using our platform or use our platform in a reduced capacity, our business, results of operations, and financial condition would be adversely affected.
5 unchanged sentences
In addition, the processing volume from Block has in the past fluctuated from period to period and may fluctuate or decline in future periods.
−Removed: Our net revenue and results of operations could suffer if, among other things, Block does not continue to use our products, uses fewer of our products, reduces its processing volume, or renegotiates, terminates or fails to renew, or to renew on similar or favorable terms, its agreement with us.
+Added: Our net revenue and results of operations could suffer if, among other things, Block or any of our other largest customers do not continue to use our products, use fewer of our products, reduce their processing volume with us, or renegotiate, terminate or fail to renew, or to renew on similar or favorable terms, their agreements with us.
Our recent growth, ongoing changes in our industry, and our transaction mix make it difficult to forecast our net revenue and evaluate our business and future prospects.
8 unchanged sentences
Accordingly, we may be unable to prepare accurate internal financial forecasts, and our results of operations in future reporting periods may differ materially from our estimates and forecasts or the expectations of investors or analysts, causing our business to suffer and our Class A common stock trading price to decline.
−Removed: We have a history of net losses, we anticipate increasing operating expenses in the future, and we may not be able to achieve profitability.
+Added: We have a history of net losses, we anticipate increasing operating expenses in the future, and we may not be able to achieve or sustain profitability.
We have incurred significant net losses since our inception, including net losses of $184.8 million, $163.9 million and $47.7 million for the years ended December 31, 2022, 2021 and 2020, respectively.
−Removed: We expect to continue to incur net losses for the foreseeable future and we may not achieve profitability in the future.
−Removed: Because the market for our Platform, products, and services is evolving, it is difficult for us to predict our results of operations or our market opportunity.
−Removed: We expect our operating expenses to significantly increase over the next several years as we hire additional personnel, adjust compensation packages to hire new or retain employees in an increasingly competitive job market, expand our operations and infrastructure, both domestically and internationally, continue to enhance our Platform and develop and expand its capabilities, expand our products and services, and expand and improve our APIs.
+Added: As of December 31, 2022 and December 31, 2021, our accumulated deficit was approximately $602.2 million and $417.5 million respectively.
+Added: We expect to continue to incur net losses for the foreseeable future and we may not achieve profitability.
+Added: We anticipate our operating expenses to continue to increase in the foreseeable future as we hire additional personnel, adjust compensation packages to hire new or retain existing employees, expand our operations and infrastructure, continue to enhance our platform and develop and expand its capabilities, expand our products and services, and expand and improve our APIs.
These initiatives may be more costly than we expect and may not result in increased net revenue.
+Added: Further as we expand our offerings to additional markets, our offerings in these markets may be less profitable than the markets in which we currently operate.
In addition, as a public company, we have incurred, and we will continue to incur, additional significant legal, insurance, accounting, and other expenses that we did not incur as a private company.
−Removed: Any failure to increase our net revenue sufficiently to keep pace with the increases in expenses resulting from these initiatives, investments, and other activities could prevent us from achieving or maintaining profitability or positive cash flow on a consistent basis in future periods.
−Removed: If we fail to achieve profitability, our business, results of operations, and financial condition could be adversely affected.
−Removed: We cannot assure you that we will ever achieve or sustain profitability and may continue to incur significant losses going forward.
−Removed: Any failure by us to achieve or sustain profitability on a consistent basis could cause the value of our Class A common stock to decline.
From time to time, we may make decisions that may reduce our short-term operating results if we believe those decisions will improve the experiences of our customers, end users, and other users of our products and services, which we believe will improve our operating results over the long term.
These decisions may not be consistent with investors’ expectations and may not produce the long-term benefits that we expect, and this may materially and adversely affect our business.
−Removed: We may experience annual or quarterly fluctuations in our results of operations due to a number of factors that make our future results difficult to predict and could cause our results of operations to fall below analyst or investor expectations.
−Removed: Our annual or quarterly results of operations may fluctuate as a result of a number of factors, many of which are outside of our control and may be difficult to predict, including, but not limited to:
+Added: We may experience significant annual or quarterly fluctuations in our results of operations due to a number of factors that make our future results difficult to predict and could cause our results of operations to fall below analyst or investor expectations.
+Added: Our annual or quarterly results of operations for a given period may not fully reflect the underlying performance of our business and may fluctuate as a result of a number of factors, many of which are outside of our control and may be difficult to predict, including, but not limited to the risk factors included in this section as well as:
• demand for our platform, products, and services by our customers;
8 unchanged sentences
• the timing and extent of amendments or new contracts related to our volume incentive arrangements with Card Networks, which could result in incentive payments that are recorded in a current period and based on volume processed in a prior period;
−Removed: • the timing of expenses and recognition of net revenue;
• changes in customers’ processing volumes resulting from seasonal fluctuations;
5 unchanged sentences
• legal and regulatory compliance costs in new and existing markets;
−Removed: • the amount of compensation and timing of hiring new employees;
+Added: • the amount of compensation for and timing of hiring new employees, and the impact of the increased labor market competition in the United States;
• the rate of expansion and productivity of our sales force;
2 unchanged sentences
• fluctuations in interest rates;
+Added: • increased inflation;
• costs and timing of expenses related to the acquisition of businesses, talent, technologies, or intellectual property, including potentially significant amortization costs and possible write-downs;
2 unchanged sentences
• health pandemics, such as the COVID-19 pandemic, influenza, and other highly communicable diseases or viruses;
−Removed: • the impact of market and economic volatility caused by the COVID-19 pandemic on our business and the businesses of our Customers;
−Removed: • the impact of the COVID-19 pandemic on consumer demand and spending patterns;
• general economic conditions in either domestic or international markets, including conditions resulting from geopolitical uncertainty and instability or war, including the significant military action against Ukraine launched by Russia.
1 unchanged sentence
You should not rely on our past results as an indicator of our future performance.
−Removed: The variability and unpredictability of our results of operations or other operating metrics could result in our failure to meet our or investors’ expectations, or those of analysts that cover us, with respect to net revenue or other key metrics for a particular period.
−Removed: If we fail to meet or exceed such expectations for these or any other reasons, the trading price of our Class A common stock could fall, and we could face costly lawsuits, including securities class action suits.
+Added: If our results of operations or other operating metrics fall short of the expectations of our investors and financial analysts, the trading price of our Class A common stock could be adversely affected.
Systems failures and interruptions in the availability of our platform may adversely affect our business, results of operations, and financial condition.
Our continued growth depends on the efficient operation of our platform without interruption or degradation of performance.
−Removed: Our business involves processing large numbers of transactions, enabling the movement of large sums of money on an aggregate basis, and the management of large amounts of data, and a system outage or data loss could have a material adverse effect on our business, results of operations, and financial condition.
−Removed: We may experience service interruptions, data loss, outages, and other performance problems due to a variety of factors, including infrastructure changes or failures, introductions of new functionality, human or software errors, capacity constraints, denial-of-service attacks, ransomware attacks, or other security-related incidents, including as retaliation against financial institutions for sanctions imposed against Russia as a result of the significant military action against Ukraine launched by Russia.
−Removed: In some instances, we may not be able to identify the cause or causes of these performance problems immediately or in short order, and we may face difficulties remediating and otherwise responding to any such issues.
−Removed: We may not be able to maintain the level of service uptime and performance needed by our Customers, especially as TPV increases.
−Removed: We have experienced high growth in TPV over the past several years and expect such growth may continue for the coming years;
−Removed: however, if we are unable to maintain sufficient processing capacity, Customers could face longer processing times or even downtime.
−Removed: Furthermore, any efforts to further scale our Platform or increase its complexity to handle a larger number or more complicated transactions could result in performance issues, including downtime.
−Removed: If our Platform is unavailable or if Customers are unable to access our Platform within a reasonable amount of time, or at all, our business would be adversely affected.
−Removed: Our Customers rely on the full-time availability of our Platform to process payment transactions, and an outage on our Platform could impair the ability of our Customers to operate their business and generate revenue.
−Removed: Therefore, any system failure, outage, performance problem, or interruption in the availability of our Platform would negatively impact our brand, reputation, and Customer satisfaction, and could subject us to financial penalties and liabilities.
−Removed: Moreover, we depend on services from various third-party vendors to maintain our infrastructure, including data center facilities and cloud storage platforms such as Amazon Web Services, Inc., or AWS.
−Removed: We conduct vendor due diligence;
−Removed: however, if a service provider fails to develop and maintain sufficient internal control processes or fails to provide sufficient capacity to support our Platform or otherwise experiences service outages, such failure could interrupt the operation of our Platform, potentially adversely affecting our Customers or their perception of our Platform’s reliability and adversely affecting the business of Customers using our Platform.
−Removed: Any disruptions in these services, including as a result of actions outside of our control, would significantly impact the continued performance of our Platform.
−Removed: In the future, these services may not be available to us on commercially reasonable terms, or at all.
−Removed: Any loss of the right to use any of these services could result in decreased functionality of our Platform until equivalent technology is either developed by us or, if available from another provider, is identified, obtained, and integrated into our infrastructure.
−Removed: If we do not accurately predict our infrastructure capacity requirements, our Customers could experience service shortfalls.
−Removed: We may also be unable to effectively address capacity constraints, upgrade our systems as needed, and continually develop our technology and network architecture to accommodate actual and anticipated changes in technology, as well as to increase efficiency.
+Added: Our business involves processing large numbers of transactions, enabling the movement of large sums of money on an aggregate basis, and the management of large amounts of data.
+Added: System outages or data loss could have a material adverse effect on our business, results of operations, and financial condition.
+Added: We may experience service interruptions, data loss, outages, and other performance problems due to a variety of factors, including infrastructure changes or failures, introductions of new functionality, human or software errors, capacity constraints, denial-of-service attacks, phishing attacks, ransomware attacks, or other security-related incidents, including as retaliation against financial institutions for sanctions imposed against Russia as a result of the significant military action against Ukraine launched by Russia.
+Added: In some instances, we may not be able to identify the cause or causes of these performance problems immediately or in short order, and we may face difficulties remediating and otherwise responding to any such issues, including resuming operations in a timely manner for our customers and preventing data loss.
Further, our customer contracts typically provide for service level commitments.
6 unchanged sentences
Any of the above circumstances or events may harm our reputation, cause customers to terminate their agreements with us, impair our ability to renew contracts with customers and grow our customer base, subject us to financial penalties and liabilities, and otherwise adversely affect our business, results of operations, and financial condition.
−Removed: The global COVID-19 pandemic could adversely affect our business, results of operations, and financial condition.
−Removed: In March 2020, the World Health Organization declared the novel strain of coronavirus, COVID-19, a global pandemic.
−Removed: The COVID-19 pandemic has continued to spread and evolve.
−Removed: The related public health measures, including orders to shelter in place, travel restrictions, and mandated business closures, have adversely affected workforces, organizations, Customers, economies, and financial markets globally, leading to an economic downturn and increased market volatility.
−Removed: The extent to which such measures are removed or new measures are put in place will depend upon how the pandemic and the global response evolves, including the distribution of available vaccines, the rates at which they are administered, and the emergence of new variants of the virus.
−Removed: The pandemic, as well as intensified measures undertaken to contain the spread of COVID-19, has impacted our day-to-day operations.
−Removed: Like many other companies, the majority of our workforce is working remotely and engaging with prospects and Customers who are also generally working remotely.
−Removed: As public health measures in the United States continue to shift, many Customer, employee, and industry events continue to be virtual-only experiences due to the pandemic.
−Removed: Live event attendance and sponsorship is one of the ways we have historically connected with prospective Customers.
−Removed: We rely on events, such as Money20/20, for a portion of our lead generation.
−Removed: A contingent of our employees attended Money20/20 in person in 2021, but the possibility of future variants of COVID-19 creates continuing uncertainty around live industry events in 2022.
−Removed: Because our solution is technical and requires in-depth discussions around Customer use cases, it can be challenging to acquire new Customers through predominantly online outreach, such as virtual events, email, and targeted ads.
−Removed: We have also observed fatigue from prospective Customers around attending virtual events, making it more difficult to acquire Customers through such events.
−Removed: Any cancellation or postponement of live events may impair our ability to acquire new Customers and prospects and may also result in the loss of financial commitments made to such events.
−Removed: In addition, we may incur increased workforce costs, including costs associated with implementing additional personnel and workplace safety protocols when the majority of our employees return to an office, and workplace or labor claims and disputes related to COVID-19.
−Removed: The continued spread and evolution of COVID-19 could also have an adverse impact on our vendors, partners, and Customers, therefore materially and adversely impacting our business, results of operations, and overall financial performance in future periods.
−Removed: For example, we have experienced, and may continue to experience, a decrease in processing volumes from certain Customers, particularly those in industries that are heavily impacted by various public health measures, such as travel;
−Removed: delayed sales cycles, including Customers and prospective Customers delaying contract signing or contract renewals;
−Removed: and delays in launching strategic partnerships and opportunities.
−Removed: These disruptions could continue to adversely affect our business, results of operations, and financial condition, and could have other currently unforeseen negative impacts on us.
−Removed: While we have developed and continue to develop plans to help mitigate the potential negative impact of the pandemic on our business, it is possible the COVID-19 pandemic, particularly in light of new variant strains of the virus, could further impact our operations and the operations of our Customers, partners, and vendors as a result of quarantines, illnesses, and travel and logistics restrictions.
−Removed: Supply chain disruption and resulting inflationary pressures, a global labor shortage, and the ebb and flow of COVID-19, including in specific geographies, are currently impacting the pace of our and our Customers’, partners’, and vendors’ recovery and our business outlook.
−Removed: Our efforts to mitigate the potential negative impact of the pandemic on our business may not be effective and a protracted economic downturn will likely limit the effectiveness of our mitigation efforts.
−Removed: It is not possible for us to predict the duration or magnitude of the adverse results of the COVID-19 pandemic and its effects on our business, results of operations, or financial condition at this time.
−Removed: The extent to which the COVID-19 pandemic may impact our business, results of operations, and financial condition will depend on future developments, which are highly uncertain and cannot be predicted, including, but not limited to, increases in infection rates and hospitalizations, the resulting impact on the businesses of our Customers, partners, and vendors, the remedial actions and stimulus measures adopted by federal, state, and local governments, and the extent that normal economic and operating conditions are impacted.
−Removed: To the extent the COVID-19 pandemic adversely affects our business, results of operations, and financial condition, it may also have the effect of heightening many of the other risks described in this “Risk Factors” section.
−Removed: For more information on the effect of COVID-19 and potential risks to us, please see Item 7, “Management’s Discussion and Analysis of Financial Condition and Results of Operations — Impact of COVID-19.”
+Added: We may not be able to maintain the level of service uptime and performance needed by our customers, especially as TPV increases.
+Added: If we are unable to maintain sufficient processing capacity, customers could face longer processing times or even downtime.
+Added: Furthermore, any efforts to further scale our platform or increase its complexity to handle a larger number or more complicated transactions could result in performance issues, including downtime.
+Added: If our platform is unavailable or if customers are unable to access our platform within a reasonable amount of time, or at all, our business would be adversely affected.
+Added: Our customers rely on the full-time availability of our platform to process payment transactions, and an outage on our platform could impair the ability of our customers to operate their business and generate revenue.
+Added: Therefore, any system failure, outage, performance problem, or interruption in the availability of our platform would negatively impact our brand, reputation, and customer satisfaction, and could subject us to financial penalties and liabilities.
Our business relies on our relationships with Issuing Banks and Card Networks, and if we are unable to maintain these relationships, our business may be adversely affected.
−Removed: Further, any changes to the rules or practices set by Card Networks, including changes in Interchange Fees, could adversely affect our business.
+Added: Further, any changes to the rules or practices set by Card Networks, including changes in Card Network fees or Interchange Fees, or changes in our handling of such fees could adversely affect our business.
We rely on our relationships with financial institutions, including Issuing Banks and Card Networks, that provide certain services that are an important part of our product offering.
9 unchanged sentences
Diversifying our contractual relationships and operations with Issuing Banks may increase the complexity of our operations and may also lead to increased costs.
−Removed: We also have agreements directly with Card Networks, such as Visa, Mastercard, and PULSE, which is part of the Discover Global Network, that, among other things, provide us certain monetary incentives based on the processing volume of our Customers’ transactions routed through the respective Card Network.
+Added: We also have agreements directly with Card Networks that, among other things, provide us certain monetary incentives based on the processing volume of our customers’ transactions routed through the respective Card Network.
For certain incentive arrangements with an annual measurement period, the one-year period may not align with our fiscal year.
−Removed: Unusual fluctuations in network fees can occur in the quarter in which volume thresholds are achieved as higher incentive rates are applied to volumes over the entire measurement periods, which can span 6 or 12 months, which can affect our financial results for a given quarter or fiscal year.
+Added: We currently include Card Network fees in the pricing arrangements with our MxM customers.
+Added: If our customers were to pay these fees directly to the Card Networks, our revenue may decrease.
+Added: Unusual fluctuations in Card Network fees can occur in the quarter in which volume thresholds are achieved as higher incentive rates are applied to volumes over the entire measurement periods, which can span 6 or 12 months, which can affect our financial results for a given quarter or fiscal year.
If we were to lose our certification with a Card Network, we could lose customers if they needed to switch to a different Card Network, for which we did not have a certification.
2 unchanged sentences
If we are unsuccessful in establishing, renegotiating, or maintaining relationships with Issuing Banks and Card Networks, our business may be adversely affected.
−Removed: Our agreements with Issuing Banks and Card Networks require us to comply with Card Network operating rules.
−Removed: The Card Networks set these network rules and have discretion to interpret the rules and change them at any time.
−Removed: For additional information about regulations relating to network rules, see the section titled “Risk Factors—Risks Relating to Regulation—Our business is subject to extensive regulation and oversight in a variety of areas, directly and indirectly through our relationships with Issuing Banks and Card Networks, which regulations are subject to change and to uncertain interpretation.” While changes in the network rules usually relate to pricing, other types of changes could require us to take certain steps to comply or adapt.
−Removed: For example, we began to issue cards with chips built in when a network rule changed to enable chip and PIN transactions.
−Removed: The termination of the card association registrations held by us or any of the Issuing Banks or any changes to these network rules or how they are interpreted could have a significant impact on our business and financial condition.
−Removed: Any changes to or interpretations of the network rules that are inconsistent with the way we or our Issuing Banks currently operate may require us to make changes to our business that could be costly or difficult to implement.
−Removed: If we fail to make such changes or otherwise resolve the issue with the Card Networks, the Card Networks could fine us or prohibit us from processing payment cards.
−Removed: In addition, violations of the network rules or any failure to maintain good relationships with the Card Networks could impact our ability to receive incentives from them, increase our costs, or otherwise adversely affect our business.
+Added: Our agreements with Issuing Banks and Card Networks require us to comply with Card Network rules.
+Added: The Card Networks set these rules and have discretion to interpret the rules and change them at any time.
+Added: For additional information about regulations relating to Card Network rules, see the section titled “Risk Factors—Risks Relating to Regulation—Our business is subject to extensive regulation and oversight in a variety of areas, directly and indirectly through our relationships with Issuing Banks and Card Networks, which regulations are subject to change and to uncertain interpretation.
+Added: Changing international, federal, state, and local laws, as well as changing regulatory enforcement policies and priorities, including changes that may result from changes in the political landscape, may negatively impact our business, results of operations, financial condition, and future prospects.
+Added: ” The termination of the card association registrations held by us or any of the Issuing Banks or any changes to these Card Network rules or how they are interpreted could have a significant impact on our business and financial condition.
+Added: Any changes to or interpretations of the Card Network rules that are inconsistent with the way we or our Issuing Banks currently operate may require us to make changes to our business that could be costly or difficult to implement.
+Added: If we fail to make such changes or otherwise resolve the issue with the Card Networks, the Card Networks could charge us additional fees or prohibit us from processing transactions.
+Added: We have been charged such additional fees in the past, and expect to continue to be charged such fees in the future.
+Added: These additional fees are considered costs of revenue.
+Added: While changes in the Card Network rules usually relate to pricing, other types of changes could require us to take certain steps to comply or adapt.
Unfavorable conditions in our industry or the global economy could adversely affect our business, results of operations, and financial condition.
−Removed: Our performance is subject to economic conditions and their impact on levels of spending by businesses and their customers.
+Added: Our revenue is impacted, to a significant extent, by general economic conditions, their impact on levels of spending by businesses and their customers, and the financial performance of our customers.
+Added: Our business, the industry, and our customers’ businesses are sensitive to macroeconomic conditions.
Our net revenue is dependent on the usage of our platform, which in turn is influenced by the volume of business our customers conduct.
−Removed: To the extent that weak economic conditions result in a reduced volume of business for our Customers and prospective Customers, demand for, and use of, our Platform, products, and services may decline.
+Added: Supply chain disruption, a global labor shortage, increased inflation, and higher interest rates have adversely affected our business, results of operations and business outlook and may continue to create uncertainty as to our and our customers’, partners’, and vendors’ financial results, operations and business outlook.
+Added: Weak economic conditions or a significant deterioration in economic conditions, including the current inflationary environment and the possibility of a recession could result in a reduced volume of business for our customers and prospective customers, and demand for, and use of, our platform, products, and services may decline.
If spending by their customers declines, our customers could process fewer payments with us or, if our customers cease to operate, they could stop using our platform and our products and services altogether.
+Added: Moreover, if the financial condition of a customer deteriorates significantly or a customer becomes subject to a bankruptcy proceeding, we may not be able to recover amounts due to us from the customer.
Furthermore, weak economic conditions may make it more difficult to collect on outstanding accounts receivable.
If, as a result of a weak economy, our customers reduce their use of our platform, or prospective customers delay adoption or elect not to adopt our platform, our business, results of operations, and financial condition could be adversely affected.
+Added: We are unable to predict the impact of other macroeconomic factors, including the military action against Ukraine launched by Russia, supply chain shortages, higher inflation rates, higher interest rates, and other global economic conditions, will have on our processing volumes, and on our future results of operations.
+Added: A deterioration in macroeconomic conditions could increase the risk of lower consumer spending, consumer and merchant bankruptcy, insolvency, business failure, higher credit losses, foreign currency fluctuations, or other business interruption, which may adversely impact our business.
+Added: We continue to monitor the situation and may take actions that alter our operations and business practices as may be required by federal, state, or local authorities or that we determine are in the best interests of our customers, vendors, employees, and us.
Performance issues in our platform or our platform’s transaction processing could diminish demand for our platform or products, adversely affect our business and results of operations, and subject us to liabilities.
+Added: Any significant disruption in, or errors in, service on our platform, including events beyond our control, could have a material and adverse effect on our business, results of operations, financial condition, and future prospects.
Our platform is designed to process a high number of transactions and deliver reports and other information related to those transactions at high processing speeds.
2 unchanged sentences
Any performance issues, including errors, defects, or disruptions in our platform or our platform’s transaction processing, could damage our customers’ businesses and, in turn, hurt our brand and reputation and erode customer trust.
+Added: In addition, in the event of damage or interruption, our insurance policies may not adequately compensate us for any losses that we may incur.
+Added: Our disaster recovery plan has not been tested under actual disaster conditions, and we may not have sufficient capacity to recover all data and services in the event of an outage.
The risk of performance issues has increased in recent periods due to the significant increase in our TPV.
1 unchanged sentence
We release regular updates to our platform, which have in the past contained, and may in the future contain, undetected errors, failures, vulnerabilities, and bugs.
−Removed: Additionally, we may experience errors, inaccuracies, or omissions in our processing, reconciling or reporting of transactions.
+Added: Additionally, we have in the past and may in the future experience errors, inaccuracies, or omissions in our processing, reconciling or reporting of transactions.
+Added: For instance, in the third quarter of 2022, we incurred losses related to the processing of a limited number of international transactions in excess of customer authorized amounts.
Further, we may be unable to replenish the supply of payment cards issued to our customers before it is depleted, such that our customers could run out of cards for a short period of time.
6 unchanged sentences
Our operations depend on receiving, storing, processing, and transmitting sensitive information pertaining to our business, employees, customers, and end users.
−Removed: The confidentiality, security, and integrity of such sensitive business information residing on our systems is important to our business.
−Removed: Any unauthorized access, intrusion, infiltration, network disruption, denial of service, or similar incident could disrupt the integrity, continuity, security, and trust of our systems or data, or the systems or data of our Customers or vendors.
−Removed: These incidents are often difficult to detect and are constantly evolving, and we or our Customers or vendors may face difficulties or delays in identifying or otherwise responding to any incident.
+Added: The confidentiality, security, and integrity of such sensitive business information residing on or otherwise processed using our systems is important to our business.
+Added: Any unauthorized access, intrusion, infiltration, network disruption, denial of service, infection by ransomware, viruses, or other malicious code, or similar incident could disrupt the integrity, continuity, security, and trust of our systems or data, or the systems or data of our customers or vendors.
+Added: These incidents are often difficult to detect and the threats are constantly evolving, and we or our customers or vendors may face difficulties or delays in identifying or otherwise responding to any incident.
Unauthorized parties have attempted and may continue to attempt to gain access to our platform, systems, or facilities, and those of our customers, partners, and vendors, through various means and with increasing sophistication.
2 unchanged sentences
These events could create costly claims and litigation, significant financial liability, regulatory investigations or proceedings, increased regulatory scrutiny, financial sanctions, a loss of confidence in our ability to serve customers and cause current or potential customers to choose another service provider, all of which could have a material adverse impact on our business.
−Removed: In addition, we expect to continue to invest significant resources to maintain and enhance our information security and controls and to investigate and remediate any security vulnerabilities.
−Removed: Although we believe that we maintain a robust data security program, including a responsible disclosure program, and that none of the incidents that we have encountered to date have materially impacted us, we cannot be certain that the security measures and procedures we have in place to detect security incidents and protect sensitive data, including protection against unauthorized access and use by our employees, will be successful or sufficient to counter all current and emerging technological risks and threats.
−Removed: The impact of a material event involving our systems and data, or those of our Customers or vendors, could have a material adverse effect on our business, results of operations, and financial condition.
+Added: In addition, cybersecurity researchers have warned of the possibility of a broader increase in cyberattack activity in connection with this military action.
+Added: We expect to continue to invest significant resources to maintain and enhance our information security and controls and to investigate and
+Added: remediate any security vulnerabilities.
+Added: Although we believe that we maintain a robust data security program, including a responsible disclosure program, and that none of the incidents that we have encountered to date have materially impacted us, we cannot be certain that the security measures and procedures we have in place to detect security incidents and protect sensitive data, including protection against unauthorized access and use by our employees, will be successful or sufficient to counter all current and emerging risks and threats facing us and our customers and vendors.
+Added: The impact of a material event involving our systems or data, or those of our customers or vendors, could have a material adverse effect on our business, results of operations, and financial condition.
Under Card Network rules and our contracts with our Issuing Banks, if there is a breach of payment card information that we store, process, or transmit or that is stored, processed, or transmitted by our customers or other third parties that we do business with, we could be liable to the Issuing Banks for certain of their costs and expenses.
−Removed: Additionally, if our own confidential business information were improperly disclosed, our business could be materially and adversely affected.
+Added: Additionally, if our own confidential business information were improperly acquired or otherwise disclosed or processed, our business could be materially and adversely affected.
The reliability and security of our platform is a core component of our business.
−Removed: Any perceived or actual breach of security, regardless of how it occurs or the extent of the breach, could have a significant impact on our reputation as a trusted brand, cause us to lose existing Customers, prevent us from obtaining new Customers, require us to expend significant funds to remedy problems caused by breaches and to implement measures to prevent further breaches, and expose us to legal risk and potential liability, including those resulting from governmental or regulatory investigations, class action litigation, and costs associated with remediation, such as fraud monitoring, card reissuance, and forensics.
−Removed: Any actual or perceived security breach at a vendor providing services to us or our Customers could have similar effects.
+Added: Any perceived or actual breach of security or security incident, regardless of how it occurs or the extent of the breach or incident, could significantly disrupt our operations, result in unauthorized or unlawful access to, misuse, disclosure, loss, acquisition, corruption, unavailability, alteration, modification or destruction of our and our customers’ data, including sensitive and proprietary information, personal data and personal information, have a significant impact on our reputation as a trusted brand, cause us to lose existing customers, prevent us from obtaining new customers, require us to expend significant funds to remedy problems caused by the breach or incident and to implement measures to prevent further breaches and incidents, and expose us to legal risk and potential liability, including those resulting from governmental or regulatory investigations, claims, demands, investigations, and litigation initiated by private parties, including class action litigation, and costs associated with remediation, such as fraud monitoring, card reissuance, and forensics.
+Added: Our vendors face similar security risks, and any actual or perceived security breach or incident at a vendor providing services to us or our customers could have similar effects.
While we maintain cybersecurity insurance, subject to applicable deductibles and policy limitations, our insurance may be insufficient to cover all liabilities incurred by such attacks.
−Removed: We cannot be certain that our insurance coverage will be adequate for privacy, data security, and data protection liabilities actually incurred, that insurance will continue to be available to us on economically reasonable terms, or at all, or that an insurer will not deny coverage as to any future claim.
+Added: We cannot be certain that our insurance coverage will be adequate for privacy, information security, and data protection liabilities actually incurred, that insurance will continue to be available to us on economically reasonable terms, or at all, or that an insurer will not deny coverage as to any future claim.
The successful assertion of one or more large claims against us that exceed available insurance coverage, or the occurrence of changes in our insurance policies, premiums, or deductibles could have a material adverse effect on our business, results of operations, and financial condition.
Our business depends on a strong and trusted brand, and any failure to maintain, protect, enhance, and market our brand would hurt our business.
+Added: Negative publicity about us or our industry could adversely affect our business, results of operations, financial condition, and future prospects.
We have developed a strong and trusted brand that has contributed significantly to the success of our business.
We believe that maintaining and promoting our brand in a cost-effective manner is important to achieving widespread acceptance of our platform and the products and services we offer, expanding our base of customers and end users, and increasing our TPV.
−Removed: Our brand is predicated on the idea that we offer modern payment solutions to our Customers and our Platform helps enable them to successfully operate their businesses.
−Removed: We are dedicated to building and maintaining a Platform our Customers can trust and creating solutions for our Customers who choose to build and grow their businesses with our card programs and other services.
−Removed: Maintaining and promoting our brand will depend largely on our ability to continue to provide a useful, reliable, secure, and innovative Platform, as well as our ability to maintain trust and be a payments processing innovator and leader.
−Removed: We may, from time to time, introduce, or make changes to, our Platform, products, services, privacy practices, or other practices or terms of service that Customers do not like, which may materially and adversely affect our brand.
−Removed: Brand promotion activities may not generate Customer awareness or increase net revenue, and even if they do, any increase in net revenue may not offset the expenses we incur in building our brand.
−Removed: In addition, due to the COVID-19 pandemic and the restrictions on travel, we have not been able to organize certain marketing and promotional events and in-person meetings to facilitate Customer adoption and generate leads with potential Customers.
−Removed: If we fail to successfully promote and maintain our brand or if we incur excessive expense in this effort, our business could be materially and adversely affected.
Harm to our brand can arise from many sources, including failure by us or our partners and vendors to satisfy expectations of service and quality, inadequate protection or misuse of sensitive information, compliance failures and claims, litigation and other claims, and misconduct by our vendors or other counterparties.
We may also be the target of incomplete, inaccurate, and misleading or false statements about our company and our business that could damage our brand and deter customers from adopting our services.
−Removed: Any negative publicity about our company, our industry, the quality and reliability of our Platform, our risk management processes, changes to our products and services, our ability to effectively manage and resolve Customer complaints, our privacy, data protection, and information security practices, litigation, regulatory activity, policy positions, or the experience of our Customers with our Platform, products, and services could adversely affect our reputation and the confidence in and use of our Platform, products, and services.
−Removed: If we do not successfully maintain a strong and trusted brand, our business could be materially and adversely affected.
+Added: As a result, our business, results of operations, financial condition, and future prospects would be materially and adversely affected.
If we fail to offer high-quality customer support, our business and reputation will suffer.
22 unchanged sentences
Expanding our business internationally, however, could subject us to new challenges and risks.
+Added: Further expansion of our operations internationally is important to the success of our business and will subject us to new challenges and risks.
During the year ended December 31, 2022, we derived 3% of our net revenue from customers located outside the United States .
−Removed: The future success of our business will depend, in part, on our ability to offer our Platform and services internationally and expand our international Customer base.
−Removed: While we have been expanding our Platform, products, services and sales efforts internationally, our experience in selling our Platform, products, and services outside of the United States is early.
−Removed: Our process for identifying countries to expand into may not be successful and may take a considerable amount of time, effort, and expense, and we may not realize benefits from expansion into a particular market.
−Removed: Additionally, the spread of COVID-19 may complicate efforts to expand our business internationally by restricting our ability to travel and engage in certain market diligence, sales and marketing activities abroad.
−Removed: Furthermore, our business model may not be successful or have the same traction outside the United States and we may face additional regulatory hurdles.
−Removed: As a result, our investment in marketing our Platform to these potential Customers may not be successful.
−Removed: If we are unable to increase the net revenue that we derive from international Customers, then our business, results of operations, and financial condition may be adversely affected.
−Removed: In addition, expansion, whether in our existing or new international markets, will require additional resources and controls, and offering our Platform in new geographic regions often requires substantial expenditures and takes considerable time.
−Removed: We may not be successful enough in these new geographies to recoup our investments in a timely manner or at all.
−Removed: Such expansion could also subject our business to substantial risks, including:
+Added: We do not currently have operations in Russia or plans to expand there, and, based on the actions taken by certain Card Networks, to our knowledge no Marqeta-powered card could currently operate in Russia.
+Added: It is unclear, however, whether the significant military action against Ukraine launched by Russia will have any broader implications that may impact our business and results of operations.
+Added: Managing our new and existing international operations requires us to comply with new regulatory frameworks, additional regulatory hurdles, and implement additional resources and controls.
+Added: Furthermore, our business model may not be successful or have the same traction outside the United States.
+Added: I nternational expansion subjects our business to additional risks, including:
• difficulty in attracting a sufficient number of customers in a given international market;
−Removed: • failure to anticipate competitive conditions and competition with market-players that have greater experience and brand recognition in the local markets than we do;
−Removed: • conformity with applicable business customs, including translation into foreign languages and associated expenses;
+Added: • failure to anticipate competitive conditions and competition with market-players that have greater experience in the local markets than we do or that have pre-existing relationships with potential customers and investors in those markets;
+Added: • conformity of our platform with applicable business customs, including translation into foreign languages and associated expenses;
• increased costs and difficulty in protecting intellectual property and sensitive data;
−Removed: • Increased costs from local Card Networks, Bank Identification Number, or BIN, sponsors, and other local providers locally;
−Removed: • changes to the way we do business or price our products and services as compared with our current operations or a lack of acceptance of our Platform or certain products and services;
−Removed: • the ability to support and integrate with local BIN sponsors and third-party vendors;
−Removed: • difficulties in staffing and managing foreign operations in an environment of diverse culture, laws, and customs, and other challenges caused by distance;
−Removed: • language and cultural differences, and the increased travel, infrastructure, and legal and compliance costs associated with global operations;
+Added: • increased costs from local Card Networks, BIN sponsors, vendors, and other local providers;
+Added: • potential changes to our established business and pricing models;
+Added: • the ability to support and integrate with local BIN sponsors and other service providers;
+Added: • difficulties in staffing and managing foreign operations in an environment of diverse culture, laws, and customers;
+Added: • increased travel, infrastructure, and legal and compliance costs associated with international operations;
• difficulties in recruiting and retaining qualified employees and maintaining our company culture;
−Removed: • difficulty in gaining acceptance from industry self-regulatory bodies;
−Removed: • compliance with multiple, potentially conflicting and changing governmental laws and regulations, including with respect to payment processing, data privacy, data protection, and information security;
+Added: • difficulties in gaining acceptance from industry self-regulatory bodies;
+Added: • compliance with multiple, potentially conflicting, and changing governmental laws and regulations, including banking, AML, securities, employment, tax, privacy, and data protection laws and regulations, such as the EU’s General Data Protection Regulation, or the GDPR;
• compliance with U.S.
−Removed: and foreign anti-corruption, anti-bribery, and anti-money laundering laws;
−Removed: • potential tariffs, sanctions, fines, or other trade restrictions, including any political or economic responses and counter-responses or otherwise by various global actors to the significant military action against Ukraine launched by Russia;
+Added: and foreign anti-bribery laws, including the FCPA;
• exchange rate risk and Interchange Fee regulation in foreign countries;
−Removed: • compliance with complex and potentially conflicting and changing laws of taxing jurisdictions where we conduct business and applicable U.S.
−Removed: • regional economic and political instability or war, including the significant military action against Ukraine launched by Russia.
−Removed: As a result of these risks, our efforts to expand our global operations may not be successful, potentially limiting our ability to grow our business.
−Removed: In addition, we do not currently have operations in Russia or plans to expand there, and, based on the actions taken by certain Card Networks, to our knowledge no Marqeta-powered card could currently operate in Russia.
−Removed: It is unclear, however, whether the significant military action against Ukraine launched by Russia will have any broader implications that may impact our business and results of operations.
+Added: • limited experience selling our platform, products, and services outside of the United States;
+Added: • potential restrictions on repatriation of earnings;
+Added: • expanded compliance with potentially conflicting and changing laws of taxing jurisdictions in which we conduct business and applicable U.S.
+Added: tax laws as they relate to international operations, the complexity of such tax laws, and potentially adverse tax consequences due to changes in such tax laws or the interpretation or administration thereof;
+Added: • regional economic and political conditions.
+Added: As a result of these risks, we may not be successful in managing our existing international operations or expanding our international operations.
We may incur losses relating to the settlement of payment transactions and the fraudulent use of payment cards issued through our platform.
+Added: Our resources, technologies, and fraud prevention tools may be insufficient to accurately detect and prevent fraud.
We are and will continue to be subject to the risk of losses relating to the day-to-day settlement of payment transactions that is inherent in our business model, including with respect to pre-funding and chargeback requests.
−Removed: Customers deposit a certain amount of pre-funding into their Customer account at our Issuing Banks.
+Added: Customers deposit a certain amount of pre-funding into bank accounts at our Issuing Banks.
However, depending on the model of the card program and the timing of funding and transactions, some transactions that exceed the amount of pre-funding in the customer’s account are still authorized.
+Added: We have in the past, and may in the future, incur costs relating to the improper processing of chargeback requests.
Customers are ultimately responsible for fulfilling their obligations to fund transactions.
−Removed: However, when a Customer does not have sufficient funds to settle a transaction, we are liable to the Issuing Bank to settle the transaction and may incur losses as a result of claims from the Issuing Bank.
−Removed: We would seek to recover such losses from the Customer, but we may not fully recover them if the Customer is unwilling or unable to pay due to their financial condition.
−Removed: Because we are liable to the Issuing Banks, we may also bear the risk of losses if a Customer does not provide payment due to fraudulent or disputed transactions.
+Added: However, when a customer does not have sufficient funds to settle a transaction, we are liable to the Issuing Bank to settle the transaction, including a fraudulent or disputed transaction, and may incur losses as a result of claims from the Issuing Bank.
+Added: We would seek to recover such losses from the customer, but we may not fully recover them if the customer is unwilling or unable t o pay due to their financial conditio n.
Additionally, when a chargeback request is approved, the purchase price of the transaction is refunded to the customer’s end user’s account through our platform.
2 unchanged sentences
Additionally, criminals are using increasingly sophisticated methods to engage in illegal activities which they may use to target us, including “skimming,” counterfeit payment cards, and identity theft.
−Removed: A single, significant incident or a series of incidents of fraud or theft involving cards issued through our Platform could result in reputational damage to us, potentially reducing the use and acceptance of our Platform or lead to greater regulation that would increase our compliance costs.
−Removed: Fraudulent activity could also result in the imposition of regulatory sanctions, including significant monetary fines.
+Added: A single, significant incident or a series of incidents of fraud or theft involving cards issued through our platform could result in reputational damage to us, potentially reducing the use and acceptance of our platform or leading to greater regulatory scrutiny that would increase our compliance costs.
+Added: Fraudulent activity could also result in the imposition of regulatory sanctions, including significant monetary fines, or other operating losses.
The foregoing could have a material adverse effect on our business, results of operations, and financial condition.
−Removed: We are also subject to risk from fraudulent acts of employees or contractors.
+Added: We are also potentially susceptible to risk from fraudulent acts of employees or contractors.
We depend on our executive officers and other key employees, and the loss of one or more of these employees or an inability to attract and retain other highly skilled employees could adversely affect our business.
Our success depends largely upon the continued services of our executive officers and other key employees.
−Removed: There have been changes in the past, recent changes, and there may be changes in the future, to our executive management team resulting from the hiring or departure of executives, which could disrupt our business.
−Removed: For example, we recently appointed a new Chief Financial Officer effective February 22, 2022.
−Removed: Additionally, from time to time we may reorganize the Company’s departments in an effort to increase efficiencies or better serve our Customers, including consolidating groups under existing or new executives.
−Removed: For example, we recently consolidated the marketing team, including our sales development representatives, and business development team, including strategic, enterprise, and emerging sales units as well as our partnerships teams, into one go-to-market function under our Chief Operating Officer, Vidya Peters.
+Added: There have been changes in the past and there may be changes in the future, to our executive management team resulting from the hiring or departure of executives, which could disrupt our business.
+Added: For example, we appointed Simon Khalaf, most recently our Chief Product Officer and interim Chief Revenue Officer, as Chief Executive Officer and as a member of our board of directors, effective January 31, 2023.
+Added: Khalaf succeeds Jason Gardner, who has served as our Chief Executive Officer since November 2010 and Mr.
+Added: Gardner will continue as Executive Chairman of the board of directors.
+Added: The loss of one or more of our executive officers or other key employees could adversely affect our business.
+Added: Changes in our executive management team may also cause disruptions in, and adverse impacts to, our business.
+Added: We also may not be able to successfully navigate the leadership changes while maintaining key aspects of our culture, which could have a significant negative effect on our existing business and our ability to pursue future plans.
+Added: The volatility in or lack of appreciation of the trading price of our Class A common stock may affect our ability to attract and retain executive officers or other key employees.
+Added: Many of our key employees have become, or will become, vested in a substantial amount of restricted stock units, or RSUs, or stock options.
+Added: Employees may be more likely to leave us if the shares they own or the shares underlying their vested options or RSUs have significantly appreciated in value relative to the original purchase price of the shares or the exercise price of the options, or conversely, if the exercise prices of the options that they hold are significantly above the market price of our Class A common stock.
Any employment agreements we have with our executive officers or other key personnel do not require them to continue to work for us for any specified period and, therefore, they could terminate their employment with us at any time.
+Added: We have in the past, and may in the future, experience high attrition and turnover rates across the Company, including key employees.
+Added: The loss of these employees may lead to a decrease in institutional knowledge which may adversely affect our business.
Additionally, we do not maintain any key person insurance policies.
−Removed: The loss of one or more of our executive officers, especially our Chief Executive Officer, or other key employees could adversely affect our business.
−Removed: Changes in our executive management team may also cause disruptions in, and adverse impacts to, our business.
−Removed: In addition, to maintain and grow our business, we must attract and retain highly qualified personnel.
−Removed: Competition for highly qualified personnel is intense across the markets we target, especially for highly skilled employees and experienced sales professionals.
−Removed: We have from time to time experienced, are currently experiencing, and we expect to continue to experience, difficulty in hiring and retaining employees with appropriate qualifications, at a speed that is consistent with our business needs, and at an appropriate cost, which may be compounded as a result of the COVID-19 pandemic.
+Added: Our business depends on our ability to attract and retain highly skilled employees.
+Added: Our future success depends on our ability to identify, hire, develop, motivate, and retain highly qualified personnel for all areas of our organization, in particular highly experienced product and technology personnel.
+Added: Competition for these types of highly skilled employees is intense.
+Added: Trained and experienced personnel are in high demand and may be in short supply.
+Added: We have from time to time experienced, are currently experiencing, and we expect to continue to experience, difficulty in hiring and retaining employees with appropriate qualifications, at a speed that is consistent with our business needs, and at an appropriate cost.
Any changes to U.S.
−Removed: immigration policies that restrain the flow of technical and professional talent may inhibit our ability to recruit and retain highly qualified employees.
−Removed: We must also effectively manage employee skills, competency requirements, and development plans to retain qualified employees once hired.
−Removed: Many of the companies we compete with for experienced personnel have greater resources than we have.
−Removed: If we hire employees from competitors or other companies, their former employers may attempt to assert that these employees or we have breached certain legal obligations, resulting in a diversion of time and resources, and potential liability for us or our employees.
+Added: immigration policies that restrain the flow of technical and professional talent may also inhibit our ability to recruit and retain highly qualified employees.
+Added: Many of the companies with which we compete for experienced employees have greater resources than we do and may be able to offer more attractive terms of employment.
+Added: In addition, we invest significant time and expense in training our employees, which increases their value to competitors that may seek to recruit them.
+Added: We may not be able to attract, develop, and maintain the skilled workforce necessary to operate our business, and labor expenses may increase as a result of a shortage in the supply of qualified personnel.
+Added: In addition, in 2022, we transitioned our Company to a flexible-first work environment.
+Added: As of December 31, 2022, 58% of our employees were remote.
+Added: Over time such remote operations may decrease the cohesiveness of our teams and our ability to maintain our culture, both of which are critical to our success.
+Added: Additionally, a remote working environment may impede our ability to undertake new business projects, foster a creative environment, hire new team members, and retain existing team members.
+Added: Such effects may adversely affect the productivity of our team members and overall operations, which could have a material adverse effect on our business, results of operations, financial condition, and future prospects.
In addition, job candidates and existing employees often consider the value of the equity awards they receive in connection with their employment.
1 unchanged sentence
If we are not able to add and retain employees effectively, our ability to achieve our strategic objectives will be adversely affected, and our business and growth prospects will be adversely affected.
−Removed: Further, additions of executive-level management and large numbers of employees could significantly and adversely impact our culture.
−Removed: The volatility in or lack of appreciation of the trading price of our Class A common stock may also affect our ability to attract and retain our key employees.
−Removed: Many of our senior personnel and other key employees have become, or will become, vested in a substantial amount of restricted stock units, or RSUs, or stock options.
−Removed: Employees may be more likely to leave us if the shares they own or the shares underlying their vested options or RSUs have significantly appreciated in value relative to the original purchase price of the shares or the exercise price of the options, or conversely, if the exercise prices of the options that they hold are significantly above the market price of our Class A common stock.
−Removed: If we do not maintain and continue to develop our corporate culture as we grow and evolve, including our diversity and inclusion efforts, it could impair our ability to foster the innovation, teamwork, curiosity, and diversity that we believe is necessary to support our growth.
Exposure to political developments in the United Kingdom, including the United Kingdom’s decision to leave the European Union, could adversely affect us.
9 unchanged sentences
Data Protection Act, which implemented the EU’s General Data Protection Regulation, or the GDPR, was amended January 1, 2021 to reflect the U.K.’s status outside the European Union.
−Removed: It remains unclear, however, how U.K.
+Added: However, the U.K.
+Added: has discussed its plans to depart from the GDPR and implement its own framework.
+Added: It remains unclear how U.K.
data protection laws or regulations will develop and be interpreted in the medium to longer term, how data transfers to and from the U.K.
1 unchanged sentence
While we have taken measures to preemptively address the impact of the U.K.’s departure from the European Union by including contingency clauses in our European Union master service agreements, for example, these may not adequately protect us from adverse implications on our business.
−Removed: Further, the U.K.’s exit from the European Union may create increased compliance costs and an uncertain regulatory landscape for offering equity-based incentives to our employees in the U.K.
−Removed: If we are unable to maintain equity-based incentive programs for our employees in the U.K.
−Removed: due to the departure of the U.K.
−Removed: from the European Union, our business in the U.K.
−Removed: may suffer and we may face legal claims from employees in the U.K.
−Removed: to whom we previously offered equity-based incentive programs.
+Added: Further, the U.K.’s exit from the European Union may create increased compliance costs.
These and other factors related to the departure of the U.K.
10 unchanged sentences
dollar equivalent of such expenses and, as a result, adversely affect our business, results of operations, and financial condition.
−Removed: We do not currently maintain a program to hedge exposures in foreign currencies.
−Removed: In the future, however, we may use derivative instruments, such as foreign currency forward and option contracts, to hedge certain exposures to fluctuations in foreign currency exchange rates.
−Removed: The use of such hedging activities may not offset any or more than a portion of the adverse financial effects of unfavorable movements in foreign exchange rates over the limited time the hedges are in place.
−Removed: Moreover, the use of hedging instruments may introduce additional risks if we are unable to structure effective hedges with such instruments.
−Removed: If our estimates or judgments relating to our accounting policies prove to be incorrect, our results of operations could be adversely affected.
−Removed: The preparation of financial statements in conformity with U.S.
−Removed: generally accepted accounting principles, or GAAP, requires management to make estimates and assumptions that affect the amounts reported in the consolidated financial statements and accompanying notes.
−Removed: We base our estimates in part on historical experience, market observable inputs, if available, and various other assumptions that we believe to be reasonable under the circumstances.
−Removed: The results of these estimates form the basis for making judgments about the carrying values of assets, liabilities and equity, and the amount of net revenue and expenses that are not readily apparent from other sources.
−Removed: Assumptions and estimates used in preparing our consolidated financial statements include those related to revenue recognition and accounting for share-based compensation.
−Removed: Our results of operations may be adversely affected if our assumptions change or if actual circumstances differ from those in our assumptions, which could cause our results of operations to fall below the expectations of securities analysts and investors, resulting in a decline in the trading price of our Class A common stock.
We may require additional capital to support our business, and this capital might not be available on acceptable terms, if at all.
6 unchanged sentences
We may not be able to obtain additional financing on terms favorable to us, if at all.
+Added: Disruptions in the credit markets or other factors, such as the current inflationary environment and rising interest rates, could adversely affect the availability, diversity, cost, and terms of funding arrangements.
If we are unable to obtain adequate financing or financing on terms satisfactory to us when we require it, our ability to continue to support our business growth, scale our infrastructure, develop product enhancements, and respond to business challenges could be significantly impaired, and our business, results of operations, and financial condition may be adversely affected.
−Removed: Acquisitions, strategic investments, partnerships, or alliances could be difficult to identify, divert the attention of key management personnel, disrupt our business, dilute stockholder value, and adversely affect our results of operations and financial condition.
−Removed: We may be unable to integrate acquired businesses and technologies successfully or achieve the expected benefits of such acquisitions.
−Removed: We may seek to acquire or invest in businesses, products, or technologies that we believe could complement our Platform, products, and services or expand the breadth of our Platform, enhance our products and capabilities, expand our geographic reach or Customer base, or otherwise offer growth opportunities.
−Removed: The pursuit of potential investments or acquisitions may divert the attention of management and cause us to incur various expenses in identifying, investigating, and pursuing suitable opportunities, whether or not they are consummated.
−Removed: Any acquisition, investment, or business relationship may result in unforeseen operating difficulties and expenditures.
−Removed: In addition, we have limited experience in investing in and acquiring other businesses.
−Removed: If we acquire additional businesses, we may not be able to successfully integrate the acquired personnel, operations, and technologies, or effectively manage the combined business following the acquisition.
−Removed: Specifically, we may not successfully evaluate or utilize the acquired technology or personnel or accurately forecast the financial impact of an acquisition transaction, including accounting charges.
−Removed: Moreover, the anticipated benefits of any acquisition, investment, or business relationship may not be realized or we may be exposed to unknown risks or liabilities.
+Added: Any acquisition, strategic investment, partnership, alliance and other transaction could be difficult to identify, fail to achieve strategic objectives, divert the attention of key management personnel, disrupt our ongoing operations, dilute stockholder value or result in operating difficulties, liabilities and expenses, harm our business, and negatively impact our results of operations.
+Added: We may be unable to successfully integrate acquired businesses and technology.
+Added: We have in the past and may in the future seek to acquire or invest in businesses, products, or technologies that we believe could complement our platform, products, and services or expand the breadth of our platform, enhance our products and capabilities, expand our geographic reach or customer base, or otherwise offer growth opportunities.
+Added: For example, we acquired Power Finance Inc.
+Added: on February 3, 2023.
+Added: The identification, pursuit, evaluation and negotiation of potential strategic investment transactions or acquisitions may divert the attention of management and entail various expenses, whether or not such transactions are ultimately consummated.
+Added: Any acquisition, investment, or business relationship may result in unforeseen operating difficulties and expenditures or require us to make adjustments to our or the acquired company's business models .
+Added: There can be no assurance that we will be successful in identifying, negotiating, and consummating favorable transaction opportunities, or successfully integrating the acquired personnel, operations, and technologies, or effectively scaling, expanding, and managing the combined business following the acquisition.
+Added: Specifically, we may not successfully evaluate or utilize the acquired technology or personnel from an acquired business and we may be unable to retain key personnel after a transaction, including personnel who are critical to the success of the ongoing business.
+Added: We may not accurately forecast the financial impact of an acquisition transaction, including accounting charges.
+Added: Moreover, the anticipated benefits, opportunities, growth, synergies, or business model improvements of any acquisition, investment, or business relationship may not be realized or we may be exposed to unknown risks or liabilities.
We may not be able to find and identify desirable acquisition targets or we may not be successful in entering into an agreement with any one target.
4 unchanged sentences
Such investments are generally illiquid and may never generate value.
−Removed: Further, we may invest in companies that do not succeed, and our investments may lose all or some of their value, which result in us recording impairment charges reflected in of results of operations.
−Removed: We may be subject to litigation for a variety of claims, which could harm our reputation and adversely affect our business, results of operations, and financial condition.
+Added: Further, we may invest in companies that do not succeed, and our investments may lose all or some of their value, which could result in us recording impairment charges reflected in our results of operations.
+Added: Litigation, regulatory actions, and compliance issues could subject us to fines, penalties, judgments, remediation costs, requirements resulting in increased expenses and reputational harm.
In the ordinary course of business, we may be involved in and subject to litigation for a variety of claims or disputes and receive regulatory inquiries.
4 unchanged sentences
As litigation is inherently unpredictable, we cannot assure you that any potential claims or disputes will not have a material adverse effect on our business, results of operations, and financial condition.
+Added: The current regulatory environment, increased regulatory compliance efforts, and enhanced regulatory enforcement have resulted in significant operational and compliance costs and may prevent us from providing certain products and services.
+Added: Some of the laws and regulations affecting our business have been enacted relatively recently.
+Added: Many laws and regulations affecting our business are evolving, unclear, and inconsistent across jurisdictions, and ensuring compliance with them is difficult and costly.
+Added: There is no assurance that these regulatory matters or other factors will not, in the future, affect how we conduct our business and, in turn, have an adverse effect on our business.
+Added: Additionally, while we have developed policies and procedures designed to assist in compliance with laws and regulations, no assurance can be given that our compliance policies and procedures will be effective.
+Added: Failure to comply with laws and with regulatory requirements applicable to our business could subject us to damages, revocation of licenses, class action lawsuits, administrative enforcement actions, and civil and criminal liability, which may harm our business.
+Added: Our vendor relationships subject us to a variety of risks, and the failure of third parties to comply with legal or regulatory requirements or to provide various services that are important to our operations could have an adverse effect on our business, results of operations, financial condition, and future prospects.
+Added: We depend on services from various third-party vendors to maintain our infrastructure, including data center facilities and Amazon Web Services, Inc.
+Added: as our computing and storage platform.
+Added: We also rely on Card Networks to complete, settle, and reconcile transactions processed on our platform.
+Added: Any disruptions in these services, including as a result of actions outside of our control, would significantly impact the continued performance of our platform.
+Added: We conduct vendor due diligence;
+Added: however, if a service provider fails to develop and maintain sufficient internal control processes, fails to maintain adequate data privacy controls and electronic security systems, or fails to provide sufficient capacity to support our platform or otherwise experiences service outages, such failure could adversely affect the business of our customers using our platform or their perception of our platform’s reliability.
+Added: Further, if any service provider fails to meet contractual requirements (including compliance with applicable laws and regulations), suffers a cyber-attack or other security breach, experiences damage to its systems or facilities, or terminates its contract with us, such failure or event could subject us to regulatory enforcement actions, claims from third parties, including our customers, and we could suffer economic and reputational harm that could have an adverse effect on our business.
+Added: If any service provider fails, we may also be unable to effectively address capacity constraints, upgrade our systems as needed, and continually develop our technology and network architecture to accommodate actual and anticipated changes in technology, as well as to increase efficiency.
+Added: In some cases, vendors are the sole source, or one of a limited number of sources, of the services they provide to us.
+Added: In the future, these services may not be available to us on commercially reasonable terms, or at all.
+Added: Any loss of any of these services could result in decreased functionality of our platform until equivalent technology is either developed by us or, if available from another provider, is identified, obtained, and integrated into our infrastructure.
+Added: We may incur significant costs to resolve any disruptions in service, which could adversely affect our business.
+Added: Additionally, if our vendors, or other service providers, fail to comply with the legal requirements applicable to the particular products or services being offered, or violate applicable laws or our policies, or become subject to third party claims of intellectual property infringement, misappropriation, or other violation, or malfunctions or functions in a way we did not anticipate, such violations may also put information we process at risk and could in turn adversely impact and affect our business, reputation, financial condition, or results of operations.
+Added: If our estimates or judgments relating to our accounting policies prove to be incorrect, our results of operations could be adversely affected.
+Added: The preparation of financial statements in conformity with U.S.
+Added: generally accepted accounting principles, or GAAP, requires management to make estimates and assumptions that affect the amounts reported in the consolidated financial statements and accompanying notes.
+Added: We base our estimates in part on historical experience, market observable inputs, if available, and various other assumptions that we believe to be reasonable under the circumstances.
+Added: The results of these estimates form the basis for making judgments about the carrying values of assets, liabilities and equity, and the amount of net revenue and expenses that are not readily apparent from other sources.
+Added: Assumptions and estimates used in preparing our consolidated financial statements include those related to revenue recognition and accounting for share-based compensation.
+Added: Our results of operations may be adversely affected if our assumptions change or if actual circumstances differ from those in our assumptions, which could cause our results of operations to fall below the expectations of securities analysts and investors, resulting in a decline in the trading price of our Class A common stock.
Risks Relating to Regulation
Our business is subject to extensive regulation and oversight in a variety of areas, directly and indirectly through our relationships with Issuing Banks and Card Networks, which regulations are subject to change and to uncertain interpretation.
−Removed: We, our vendors, our partners, and our Customers are subject to a wide variety of state, federal, and international laws, regulations, and industry standards in the United States and in other countries where we operate both directly and indirectly through our relationships with Issuing Banks and Card Networks.
−Removed: These laws, regulations, industry standards, and rules govern numerous areas important to our business.
−Removed: While we currently operate our business in an effort to ensure our business itself is not subject to extensive regulation, the Issuing Banks and Card Networks that we partner with operate in a highly regulated landscape, and there is a risk that those regulations could become applicable to us.
−Removed: We are directly subject to regulation in areas including privacy, data security, data protection, and anti-bribery, and our contractual relationships with Issuing Banks and Card Networks subject us to additional regulations including those relating to payments services (such as payment processing and settlement services), consumer protection, anti-money laundering, anti-bribery, escheatment, international sanctions regimes, data privacy and security, intellectual property, and compliance with the PCI DSS, a data security standard obligating companies that process, store, or transmit payment card information to maintain security measures designed to protect cardholder data.
+Added: Changing international, federal, state, and local laws, as well as changing regulatory enforcement policies and priorities, including changes that may result from changes in the political landscape, may negatively impact our business, results of operations, financial condition, and future prospects.
+Added: We, our vendors, our partners, and our customers are subject to a wide variety of laws, regulations, and industry standards, including supervision and examination with respect to the foregoing, which govern numerous areas important to our business in the United States, both at the federal and state level, and in other countries where we operate both directly and indirectly through our relationships with Issuing Banks and Card Networks.
+Added: As we continue to expand our operations internationally, we may become subject to additional laws and regulations, including possible examination and supervision, by international authorities.
+Added: While we currently operate our business in an effort to ensure our business itself is not subject to the same level of regulation as our Issuing Banks and Card Networks that we partner with, the Issuing Banks and Card Networks operate in a highly regulated environment, and there is a risk that those regulations could become applicable to, or impact, us.
+Added: For example, due to our relationships with certain Issuing Banks and Card Networks, we may be subject to indirect supervision and examination by the CFPB, which is engaged in rule-making and regulation of the payments industry, including, among other things, the regulation of prepaid cards, BNPL financing programs, and the enforcement of certain protections under applicable regulations.
+Added: We are directly subject to regulation in areas inclu ding privacy, data protection and information security, and anti-bribery, and our contractual relationships with customers, Issuing Banks and Card Networks may subject us to additional regulations including those relating to payments services (such as payment processing and settlement services) and those relating to payments products and services utilizing artificial intelligence, consumer protection, AML, anti-bribery, escheatment, international sanctions regimes and export controls, privacy, data protection, information security, intellectual property, and compliance with the PCI DSS, a data security standard and set of requirements designed to ensure that all companies that process, store, or transmit payment card information maintain a secure environment to protect cardholder data.
The laws, rules, regulations, and standards applicable to our business are enforced by multiple authorities and governing bodies in the United States, including federal agencies, self-regulatory organizations, and numerous state agencies.
−Removed: Outside of the United States, we may be subject to additional regulators.
−Removed: As we expand into new jurisdictions, or expand our Platform and product offerings in existing jurisdictions, the number of foreign regulations and regulators governing our business will expand as well.
−Removed: In addition, as our business and Platform continue to develop and expand, we may become subject to additional rules, regulations, and industry standards.
+Added: Outside of the United States, we may be subject to additional laws, rules, regulations, and standards.
+Added: In addition, as our business and platform continue to develop and expand, we may become subject to additional rules, regulations, and industry standards in the United States and internationally where we do business.
+Added: New laws or regulations could also require us to incur significant expenses and devote significant management attention to ensure compliance.
+Added: For example, we could be regulated by international, federal, and state regulatory agencies through licensing and other supervisory or enforcement authority, which could include regular examination by international, federal, and state governmental authorities.
We may not always accurately predict the scope or applicability of certain regulations to our business, particularly as we expand into new areas of operations, which could have a significant negative effect on our existing business and our ability to pursue future plans.
3 unchanged sentences
Furthermore, legislative and regulatory changes could prompt our Issuing Banks to alter the extent or the terms of their dealings with us in ways that may have adverse consequences for our business.
−Removed: For example, due to our relationships with certain Issuing Banks and Card Networks, we may be subject to indirect supervision and examination by the CFPB, which is engaged in rulemaking and regulation of the payments industry, including, among other things, the regulation of prepaid cards, buy now, pay later financing programs, and the enforcement of certain protections under applicable regulations.
−Removed: While reform in the payment industry, such as the formation of the CFPB, has focused on individual consumer protection, legislatures continue to consider whether to include business customers, especially smaller business customers, within the scope of these regulations.
−Removed: As a result, new or expanded regulation focusing on business customers or changes in interpretation or enforcement of regulations may have an adverse effect on our business, results of operations, and financial condition due to increased compliance costs and new restrictions affecting the terms we offer our Platform or our products and services under.
+Added: For example, due to our relationships with certain Issuing Banks and Card Networks, we may be subject to indirect supervision and examination by the CFPB, which is engaged in rulemaking and regulation of the payments industry, including, among other things, the regulation of prepaid cards, BNPL financing programs, and the enforcement of certain protections under applicable regulations.
+Added: While reform in the payment industry, such as the formation of the CFPB, has focused on individual consumer protection, legislatures continue to consider whether to include business customers, especially smaller business customers, within the scope of these regulations and the CFPB recently indicated it has dormant authority to regulate any company whose services may have consumer impact.
+Added: As a result, new or expanded regulation focusing on business customers or changes in interpretation or enforcement of regulations may have an adverse effect on our business, results of operations, and financial condition due to increased compliance costs and new restrictions affecting the terms under which we offer our Platform or our products and services.
A majority of our net revenue is derived from Interchange Fees and we expect Interchange Fees to continue to represent a significant percentage of our net revenue in the near term.
1 unchanged sentence
From time to time, Card Networks change the Interchange Fees and assessments they charge for transactions processed using their networks.
−Removed: Interchange Fees or assessments are also subject to change from time to time due to government regulation.
+Added: Interchange Fees and assessments are also subject to change from time to time due to government regulation.
Interchange Fees are the subject of intense legal and regulatory scrutiny and competitive pressures in the electronic payments industry.
−Removed: For example, the Durbin Amendment to the Dodd-Frank Wall Street Reform and Consumer Protection Act, which limits Interchange Fees, may restrict or otherwise impact the way we do business or limit our ability to charge certain fees to Customers.
−Removed: Issuing Banks that are exempt from the Durbin Amendment are able to access higher interchange rates.
−Removed: As a result, to maximize our Interchange Fees, we currently only contract with Issuing Banks that are exempt from the Durbin Amendment when we provide program management services.
+Added: For example, the Durbin Amendment to the Dodd-Frank Act, which limits Interchange Fees, may restrict or otherwise impact the way we do business or limit our ability to charge certain fees to customers.
+Added: Issuing Banks that are exempt from the interchange fee restrictions in the Durbin Amendment are able to access higher interchange rates.
+Added: As a result, to maximize our Interchange Fees, we currently only contract with Issuing Banks that are subject to this exemption from the Durbin Amendment when we provide MxM services.
Changes in regulation or additional rulemaking may adversely affect the way we conduct our business or result in additional compliance obligations and expense for our business and limitations on net revenue.
−Removed: For example, the Board of Governors of the Federal Reserve System recently proposed a change to the regulations implemented pursuant to the Electronic Fund Transfer Act to clarify that e-commerce transactions can be routed over secondary, unaffiliated debit card networks that generally set lower Interchange Fees.
−Removed: If implemented, we may experience a reduction in net revenue derived from Interchange Fees.
+Added: On October 3, 2022, the Board of Governors of the Federal Reserve System adopted its final rule pursuant to the Electronic Fund Transfer Act to clarify the requirement that debit card issuers ensure that at least two unaffiliated payment card networks have been enabled to process all debit card transactions, including “card not present” transactions, such as online payments.
+Added: Such secondary payment card networks may charge lower Interchange Fees, and to the extent merchants substantially shift their ‘card not present’ transaction volumes to such networks, we may experience a reduction in net rev enue derived from Interchange Fees.
Interchange Fee regulation also exists in other countries where our customers use payment cards and such regulation could adversely affect our business in other foreign regions.
Any changes in the Interchange Fees associated with our customers’ card transactions could adversely affect our business, results of operations, and financial condition.
−Removed: Many of these laws and regulations are evolving, unclear, and inconsistent across jurisdictions, and ensuring compliance with them is difficult and costly.
−Removed: With increasing frequency, federal and state regulators are holding businesses in the payments industry to higher standards of training, monitoring, and compliance, including monitoring for possible violations of laws by our Customers and people who do business with our Customers while using our Platform or products.
−Removed: If we fail to comply with laws and regulations applicable to our business in a timely and appropriate manner, we may be subject to litigation or regulatory proceedings, we may have to pay fines and penalties, and our client relationships and reputation may be adversely affected, which could have a material adverse effect on our business, results of operations, and financial condition.
+Added: Moreover, our use of vendors and our other ongoing third party business relationships could be subject to increasing regulatory requirements and attention.
+Added: We regularly use vendors and subcontractors as part of our business.
+Added: It is possible that regulators will hold us responsible for deficiencies in our oversight and control of third party relationships and in the performance of the parties with which we have these relationships.
+Added: If we fail to comply with laws and regulations applicable to our business in a timely and appropriate manner, or if this is perceived or reported to have occurred, we may be subject to litigation or regulatory investigations or other proceedings, we may have to pay fines and penalties or become subject to additional obligations or restrictions imposed upon our business or operations, our reputation may be harmed, and our customer relationships and reputation may be adversely affected, which could have a material adverse effect on our business, results of operations, and financial condition.
+Added: In some cases, regardless of fault, it may be less time-consuming or costly to settle these matters, which may require us to implement certain changes to our business practices, provide remediation to certain individuals or make a settlement payment to a given party or regulatory body.
Further, while we do not handle or interact with cryptocurrency and we only process transactions on our platform in fiat currencies, certain cryptocurrency businesses use our platform to provide card products to their customers and end users.
2 unchanged sentences
and other countries may adopt laws, regulations, or guidance, or take other actions, which may impact our Issuing Banks and restrain the growth of cryptocurrency businesses and in turn impact the net revenue associated with our cryptocurrency business customers.
−Removed: Regulations and industry standards related to privacy and data protection could adversely affect our ability to effectively provide our services.
+Added: We may not be able to respond quickly or effec tively to regulatory, legislative, or other developments, and these changes may in turn impair our ability to offer our existing or planned features, products, and services and/or increase our cost of doing business.
+Added: In addition, if our practices are not consistent or viewed as not consistent with legal and regulatory requirements, we may become subject to audits, inquiries, whistleblower complaints, adverse media coverage, investigations, or criminal or civil sanctions, all of which may have an adverse effect on our reputation, business, results of operations, and financial condition.
+Added: Stringent and changing laws, regulations and industry standards related to privacy, data protection, and information security could adversely affect our ability to effectively provide our services and could result in claims or fines, harm our results of operations, financial condition, and future prospects, or otherwise harm our business.
Governmental bodies and industry organizations in the United States and abroad have adopted, or are considering adopting, laws and regulations restricting the use of, and requiring safeguarding of, personal information.
−Removed: For example, in the United States, all financial institutions must undertake certain steps to ensure the privacy and security of consumer financial information.
−Removed: Further, the California Consumer Privacy Act became effective on January 1, 2020 and imposes additional restrictions on the collection, processing, and disclosure of personal information, including imposing increased penalties on data privacy incidents.
−Removed: Additionally, a new privacy law, the California Privacy Rights Act, or the CPRA, creates additional obligations relating to personal information that take effect on January 1, 2023 (with certain provisions having retroactive effect to January 1, 2022).
−Removed: The CPRA’s implementing regulations are expected on or before July 1, 2022, and enforcement is scheduled to begin July 1, 2023.
−Removed: We will continue to monitor developments related to the CPRA and anticipate additional costs and expenses associated with CPRA compliance.
−Removed: states also are considering omnibus privacy legislation and industry organizations regularly adopt and advocate for new standards in these areas.
−Removed: Many obligations under these other laws and legislative proposals remain uncertain, and we cannot fully predict their impact on our business.
−Removed: If we fail to comply with any of these laws or standards, we may be subject to investigations, enforcement actions, civil litigation, fines and other penalties, all of which may generate negative publicity and have a negative impact on our business.
−Removed: In the European Economic Area, the GDPR, which became effective in 2018, extends the scope of European Union data protection law to all companies processing personal data of European Union residents, regardless of the company’s location, and requires companies to meet stringent requirements regarding the handling of personal data.
−Removed: The GDPR also imposes some limitations on international transfers of personal data.
+Added: For example, the California Consumer Privacy Act became effective on January 1, 2020 and imposed significant restrictions on the collection, processing, and disclosure of personal information, including imposing increased penalties related to data privacy incidents.
+Added: Additionally, a new privacy law, the California Privacy Rights Act, or the CPRA, which became effective on January 1, 2023, creates additional obligations relating to personal information (with certain provisions having retroactive effect to January 1, 2022).
+Added: states have also passed or are considering omnibus privacy legislation and industry organizations regularly adopt and advocate for new standards in these areas.
+Added: Many obligations under these proposed laws and legislative proposals remain uncertain, and we cannot fully predict their impact on our business.
+Added: Industry organizations also regularly adopt and advocate for new standards in these areas, and we are and may become subject to contractual obligations relating to privacy, data protection, and information security.
+Added: If we fail to comply with any of these laws, standards, or other actual or asserted obligations, if we fail to protect information that we collect or otherwise process, or if any of these events is reported or perceived to have occurred, we may be subject to regulatory investigations, enforcement actions, and other proceedings, civil litigation, claims, investigations, and demands, and fines and other penalties and liabilities, all of which may generate negative publicity, harm our reputation, and have a negative impact on our business.
+Added: Further, any such actual or perceived failure may result in, among other things, revocation of any required licenses or registrations, loss of any approved status, administrative enforcement actions, sanctions, civil and criminal liability, and constraints on our ability to operate.
+Added: Our efforts to comply with laws, regulations, and other obligations relating to privacy, data protection, and information security also may cause us to incur substantial operational costs or require us to change our policies and our business practices.
+Added: We may not be successful in our efforts to achieve compliance either due to internal or external factors, such as resource allocation limitations or a lack of vendor cooperation.
+Added: As we continue to expand our operations internationally, we will continue to become subject to various foreign policy and data protection laws and regulations, which may in some cases be more stringent than the requirements in the jurisdictions in which we currently operate.
+Added: For example, the GDPR, which became effective in 2018, extends the scope of European Union data protection law to all companies processing personal data of European Union residents, regardless of the company’s location, and requires companies to meet stringent requirements regarding the handling of personal data.
+Added: has also adopted a law substantially implementing the GDPR as part of its local data protection law, referred to as the U.K.
+Added: The GDPR and other laws and regulations in Europe, the U.K., and elsewhere also impose some limitations on international transfers of personal data.
The GDPR imposes substantial obligations and risk upon our business and provides for significant penalties in the event of any non-compliance.
Administrative fines under the GDPR can amount up to 20 million Euros or four percent of a company group’s annual global turnover, whichever is higher.
−Removed: Further, following the exit of the U.K.
−Removed: from the European Union, it remains unclear how the U.K.
−Removed: Data Protection Act, which implemented the GDPR in the U.K., and other U.K.
−Removed: data protection laws or regulations will develop in the medium to longer term and how data transfers to and from the U.K.
−Removed: will be regulated.
−Removed: We have incurred substantial expense in complying with new data protection legal frameworks and we may be required to make additional, significant changes in our business operations, all of which may adversely affect our net revenue and our business overall.
−Removed: Additionally, because these new regimes lack a substantial enforcement history, we are unable to predict how emerging standards may be applied to us.
+Added: Further, it remains unclear how U.K.
+Added: data protection laws and regulations will develop in the medium to longer term.
+Added: We have incurred substantial expense in complying with new and evolving privacy and data protection legal frameworks and we may be required to make additional, significant changes in our business operations, all of which may adversely affect our net revenue and our business overall.
+Added: Additionally, because many of these new regimes lack a substantial enforcement history, we are unable to predict how emerging standards may be applied to us.
Among other requirements, the GDPR regulates transfers of personal data subject to the GDPR to third countries that have not been found to provide adequate protection to such personal data, including the United States.
On July 16, 2020, the Court of Justice of the European Union invalidated the EU-U.S.
−Removed: Privacy Shield, eliminating one of the mechanisms we had relied on to legitimize EU-U.S.
+Added: Privacy Shield, eliminating a mechanism we had relied on to legitimize EU-U.S.
data transfers.
−Removed: The court, however, approved an alternative transfer mechanism that we rely on known as the standard contractual clauses provided additional safeguards are in place.
−Removed: We are in the process of assessing this decision and its impact on our data transfer mechanisms.
−Removed: It is possible that the decision will restrict the ability to transfer personal data from the European Union to the United States.
−Removed: We (and many other companies) may need to implement different or additional measures to establish or maintain legitimate means for the transfer and receipt of personal data from the European Union to the United States, and we may, in addition to other impacts, experience additional costs associated with increased compliance burdens, and we and our Customers face the potential for regulators to apply different standards to the transfer of personal data from the European Union and Switzerland to the United States, and to block, or require ad hoc verification of measures taken with respect to, certain personal data transfers from the European Union and Switzerland to the United States.
−Removed: Any inability to transfer personal data from the European Union to the United States in compliance with data protection laws or otherwise comply with requirements in this rapidly changing environment may impede our ability to attract and retain Customers unless and until we build out an EU-compliant data processing center.
−Removed: These restrictions may adversely affect our business and financial position.
−Removed: Some countries are also considering or have passed legislation requiring local storage and processing of data, or similar requirements, potentially increasing the cost and complexity of our operations.
−Removed: In connection with providing services to our Customers, we are required by certain self-regulatory frameworks and contractual arrangements with Card Networks and Issuing Banks to provide assurances regarding the confidentiality and security of non-public consumer information, including the PCI DSS.
−Removed: Further, certain Customers increasingly expect us to comply with more stringent privacy, data protection and information security requirements than those imposed by laws, regulations or self-regulatory requirements, and we may be obligated contractually to comply with additional or different standards relating to our handling or protection of data on or by our offerings.
−Removed: The compliance standards relate to our infrastructure, components, and operational procedures designed to safeguard the confidentiality and security of non-public consumer personal information received from our Customers in the course of providing services.
−Removed: Our ability to maintain compliance with these standards and meet our Customers’ requirements may affect our ability to attract and maintain business in the future.
−Removed: If we fail to comply with these standards or Customer requirements, or are alleged to have done so, we could be exposed to suits for breach of contract, potentially in addition to governmental proceedings.
−Removed: In addition, our Customer relationships and reputation could be adversely affected, and we could be inhibited in our ability to obtain new Customers.
−Removed: If more restrictive or burdensome laws, rules, or regulations related to privacy, data protection, or information security are adopted by authorities in the future on the federal or state level or internationally, or if existing laws, rules, or regulations become subject to new or differing interpretations or enforcement, or if we become bound by additional obligations to our Customers relating to privacy, data protection, or information security, including any additional compliance standards relating to non-public consumer personal information, our compliance and operational costs may increase, our opportunities for growth may be curtailed by our compliance capabilities or reputational harm, we may find it necessary or appropriate to modify our data processing practices or policies or otherwise restrict our operations, and our potential liability in connection with breaches or incidents relating to privacy, data protection, and information security may increase, all of which could have a material adverse effect on our business, results of operations, and financial condition.
−Removed: There may continue to be changes in interpretations of existing laws and regulations, or new proposed laws, regulations, industry standards, and other obligations concerning privacy, data protection and information security, which could impair our or our Customers’ ability to collect, use or disclose information relating to consumers, which could decrease demand for our offerings, increase our costs and impair our ability to maintain and grow our Customer base and increase our net revenue.
−Removed: Because the interpretation and application of many existing and emerging laws and regulations relating to privacy, data protection and information security, along with industry standards, are uncertain, it is possible that these laws and regulations may be interpreted and applied in new ways that are, or are alleged to be, inconsistent with our data management practices or the features of our products, and we could face fines, lawsuits, regulatory investigations and other claims and penalties, and we could be required to fundamentally change our products or our business practices, any of which could have an adverse effect on our business.
−Removed: Any inability to adequately address privacy, data protection and information security concerns, even if unfounded, or any actual or perceived failure to comply with applicable privacy, data protection or information security laws, regulations, standards and other obligations, could result in additional cost and liability to us, damage our reputation, inhibit sales and adversely affect our business.
−Removed: Furthermore, the costs of compliance with, and other burdens imposed by, the laws, regulations, standards and policies that are applicable to the businesses of our Customers may limit the use and adoption of, and reduce the overall demand for, our Platform and our products and services.
−Removed: Additionally, if third parties we work with, such as our partners or vendors, violate applicable laws or our policies, such violations may also put information we process at risk and could in turn adversely affect our business, reputation, financial condition, or results of operations.
−Removed: We are subject to anti-corruption, anti-bribery, and similar laws, and non-compliance with such laws can subject us to criminal penalties or significant fines and adversely affect our business and reputation.
−Removed: We are subject to anti-corruption and anti-bribery and similar laws, such as the FCPA, the U.S.
−Removed: domestic bribery statute contained in 18 U.S.C.
−Removed: § 201, the U.S.
−Removed: Travel Act, the USA PATRIOT Act, the U.K.
−Removed: Bribery Act 2010, and other anti-corruption, anti-bribery, and anti-money laundering laws in countries where we conduct activities.
−Removed: Anti-corruption and anti-bribery laws have been interpreted broadly and enforced aggressively in recent years, and prohibit companies and their employees and agents from promising, authorizing, making, or offering improper payments or other benefits to government officials and others in the private sector to influence official action, direct business to any person, gain any improper advantage, or obtain or retain business.
−Removed: As we increase our international sales and business, our risks under these laws may increase.
−Removed: In addition, in the future we may use third parties to conduct business on our behalf abroad.
−Removed: We or such future third-party intermediaries may have direct or indirect interactions with officials and employees of government agencies or state-owned or affiliated entities, and we can be held liable for the corrupt or other illegal activities of such future third-party intermediaries and our employees, representatives, contractors, partners, and agents, even if we do not explicitly authorize such activities.
−Removed: We have implemented an anti-corruption compliance program but cannot assure you that all our employees and agents, as well as those companies we outsource certain of our business operations to, will not take actions in violation of our policies and applicable law, for which we may be ultimately held responsible.
−Removed: Any violation of the FCPA, other applicable anti-corruption laws, or anti-money laundering laws could result in whistleblower complaints, adverse media coverage, investigations, prosecutions, loss of export privileges, suspension or debarment from U.S.
−Removed: government contracts, substantial diversion of management’s attention, significant legal fees and fines, settlements, damages, severe criminal or civil sanctions, penalties or injunctions against us, our officers or our employees, disgorgement of profits, and other sanctions, enforcement actions and remedial measures, and prohibitions on the conduct of our business, any of which could have a materially adverse effect on our reputation, business, trading price, results of operations, financial condition and prospects.
+Added: An alternative transfer mechanism that we rely on, use of standard contractual clauses approved by the European Union Commission, continues to be a valid mechanism for data transfers, provided additional safeguards are in place and the appropriate versions of those standard contractual clauses are employed.
+Added: The EU and U.K.
+Added: each have issued updated standard contractual clauses that are required to be implemented.
+Added: We continue to monitor and assess regulatory guidance and other developments related to our data transfer mechanisms, with it possible that our ability to transfer personal data across borders, including from the European Union, U.K., and Switzerland to the United States (and other countries), will be impacted.
+Added: We and many other companies may need to implement different or additional measures to establish or maintain legitimate means for the transfer and receipt of personal data from the European Union, U.K., Switzerland, or other jurisdictions to the United States (and other countries), and we may, in addition to other impacts, experience additional costs associated with increased compliance burdens, and we and our customers face the potential for regulators to apply new or different standards to the transfer of personal data from the European Union, U.K., Switzerland, or other jurisdictions to the United States (and other countries), and to restrict, block, or impose conditions or restrictions with respect to, certain personal data transfers.
+Added: Other jurisdictions have also enacted legislation that requires maintaining data locally.
+Added: Any inability to transfer personal data in compliance with laws or regulations relating to privacy, data protection, or information security, or otherwise comply with requirements in this rapidly changing environment, may impede our ability to attract and retain customers.
+Added: If more restrictive or burdensome laws, rules, or regulations related to privacy, data protection, or information security are adopted by authorities in the future on the federal or state level or internationally, or if new or existing laws, rules, or regulations become subject to new or differing interpretations or enforcement, or if we become bound by additional obligations that we become subject to in response to customer requests, contractual obligations, or otherwise, relating to privacy, data protection, or information security, including any additional compliance standards relating to non-public consumer personal information, our compliance and operational costs may increase, our opportunities for growth may be curtailed, we may find it necessary or appropriate to modify our data processing practices or policies or otherwise restrict our operations, which we may be unable to complete on a commercially reasonable basis or at all, and our potential liability in connection with breaches or incidents relating to privacy, data protection, and information security may increase, all of which could have a material adverse effect on our business, results of operations, and financial condition.
+Added: Because the interpretation and application of many laws and regulations relating to privacy, data protection, and information security are uncertain, it also is possible that current or future laws may be interpreted and applied in a manner that is inconsistent with our existing data management practices or the features of our products and services.
+Added: If so, in addition to the possibility of fines, lawsuits, claims, demands, regulatory investigations and other proceedings, and other claims and penalties, we could be required to change our business activities and practices or modify our products or services, any of which could have an adverse effect on our business and which we may be unable to complete on a commercially reasonable basis or at all.
+Added: Any claims regarding our inability to adequately address privacy, data protection, or information security concerns, even if unfounded, or to comply with applicable laws, regulations, contractual requirements, policies, or other actual or asserted obligations, such as industry standards, could result in additional cost and liability to us, damage our reputation, result in negative publicity, and adversely affect our business.
+Added: Privacy, data protection, and information security concerns, whether valid or not, may inhibit market adoption of our products and services, particularly in certain industries and jurisdictions.
+Added: Additionally, if we are not able to quickly adjust to changing laws, regulations, and standards related to the internet, we could face fines, lawsuits, regulatory investigations and other claims and penalties, our business may be harmed.
+Added: We are subject to, and have an obligation to comply with, anti-corruption, anti-bribery, anti-money-laundering, and similar laws, and non-compliance with such laws and their obligations can subject us to criminal penalties or significant fines, significantly and adversely affect our business and reputation , or have other adverse consequences for us.
+Added: We can be held liable under anti-corruption, anti-bribery, AML, and similar laws for the corrupt or illegal activities of our third-party intermediaries and our employees, representatives, contractors, partners, and agents, even if we do not authorize such activities.
+Added: While we have programs and controls designed to ensure compliance with all applicable AML, and anti-bribery laws and regulations, we cannot assure you that none of our third-party intermediaries and our employees, representatives, contractors, partners, and agents will take actions in violation of those controls and laws.
We may be subject to governmental export controls and economic sanctions regulations that could impair our ability to compete in international markets and could subject us to liability if we are not in compliance with applicable laws.
8 unchanged sentences
In addition, changes in applicable export or economic sanctions regulations may create delays in the introduction and deployment of our platform, products, and services in international markets, or, in some cases, prevent the use of our platform and products or provision of our services in certain countries or with certain end users.
−Removed: Any change in export or economic sanctions regulations, shift in the enforcement or scope of existing regulations, or change in the countries, governments, persons, or technologies targeted by such regulations, could also result in decreased use of our Platform, products, and services or in our decreased ability to provide our products and services to existing or prospective Customers with international operations.
+Added: Any change in e xport or economic sanctions regulations, shift in the enforcement or scope of existing regulations, or change in the countries, governments, persons, or technologies targeted by such regulations, could also result in decreased use of our platform, products, and services or in our decreased ability to provide our products and services to existing or prospective customers with international operations.
Any decreased use of our platform, products, or services or limitation on our ability to provide our platform, products, or services could adversely affect our business, results of operations, and financial condition.
Further, we incorporate encryption technology into certain of our products.
−Removed: Various countries regulate the import of certain encryption technology, including through import permitting and licensing requirements, and have enacted laws that could limit our Customers’ ability to use our products in those countries if our products are subject to such laws and regulations.
+Added: Various countries regulate the import of certain encryption technology, including through im port permitting and licensing requirements, and have enacted laws that could limit our customers’ ability to use our products in those countries if our products are subject to such laws and regulations.
While we believe our encryption products meet certain exceptions that reduce the scope of export control restrictions applicable to such products, these exceptions may be determined not to apply to our encryption products and our products and underlying technology may become subject to export control restrictions.
1 unchanged sentence
If we were required to comply with regulatory requirements regarding the export of our platform and products and provision of our services, including with respect to new releases of our products and services, we may experience delays introducing our platform in international markets, our customers with international operations may experience difficulty deploying our platform and products and using our services, or, in some cases, we may be prevented from exporting our platform or products or providing our services to some countries altogether.
−Removed: If we fail to maintain an effective system of disclosure controls and internal control over financial reporting, our ability to produce timely and accurate financial statements or comply with applicable regulations could be impaired.
+Added: If we fail to maintain an effective system of disclosure controls and procedures or internal control over financial reporting, our ability to report timely and accurate financial results or comply with applicable regulations could be impaired, and our business, operating results, and the market price of our Class A common stock may be adversely affected.
As a public company, we are required to maintain internal control over financial reporting and to report any material weaknesses in such internal control.
The Sarbanes-Oxley Act requires, among other things, that we maintain effective disclosure controls and procedures and internal control over financial reporting.
−Removed: We are continuing to develop and refine our disclosure controls and other procedures that are designed to ensure that information required to be disclosed by us in the reports that we will file with the SEC is recorded, processed, summarized, and reported within the time periods specified in SEC rules and forms and that information required to be disclosed in reports under the Securities Exchange Act of 1934, as amended, or the Exchange Act, is accumulated and communicated to our principal executive and financial officers.
−Removed: We are also continuing to improve our internal control over financial reporting.
−Removed: For example, we have worked to improve the controls around our key accounting processes and our quarterly close process, we have implemented a number of new systems to supplement our core enterprise resource planning system as part of our control environment, and we have hired additional accounting and finance personnel to help us implement these processes and controls.
−Removed: Furthermore, in 2019, we identified a material weakness in our internal control over financial reporting relating to the reconciliation of certain customer-related settlement bank accounts.
−Removed: While management deems this material weakness remediated as of the date of the filing of this Form 10-K, and no further material weaknesses in our disclosure controls or controls over financial reporting were identified in 2021, we could identify additional material weaknesses in the future.
+Added: The process of designing and implementing effective internal controls and disclosure controls is a continuous effort that requires us to anticipate and react to changes in our business and the economic and regulatory environment and to expend significant resources to maintain a system of internal controls that is adequate to satisfy our reporting obligations as a public company.
To maintain and improve the effectiveness of our disclosure controls and procedures and our internal control over financial reporting, we have expended, and anticipate that we will continue to expend, significant resources, including accounting-related costs and significant management oversight.
If any of these new or improved controls and systems do not perform as expected, we may experience material weaknesses in our controls.
−Removed: Our current controls and any new controls that we develop may become inadequate because of changes in conditions in our business.
−Removed: Further, additional deficiencies in our disclosure controls and internal control over financial reporting may be discovered in the future.
−Removed: Any failure to develop or maintain effective controls or any difficulties encountered in their implementation or improvement could adversely affect our results of operations or cause us to fail to meet our reporting obligations and may result in a restatement of our financial statements for prior periods.
−Removed: We are in the early stages of the costly and challenging process of compiling the system and documentation necessary to perform the evaluation needed to comply with Section 404.
−Removed: We may not be able to complete our evaluation, testing, and any required remediation in a timely fashion.
−Removed: During the evaluation and testing process, if we identify material weaknesses in our internal control over financial reporting, we will be unable to assert that our internal control over financial reporting is effective.
−Removed: Any failure to implement and maintain effective internal control over financial reporting also could adversely affect the results of periodic management evaluations and annual independent registered public accounting firm attestation reports regarding the effectiveness of our internal control over financial reporting that we will eventually be required to include in our periodic reports that will be filed with the SEC.
−Removed: Ineffective disclosure controls and procedures and internal control over financial reporting could also cause investors to lose confidence in our reported financial and other information, which would likely have a negative effect on the trading price of our Class A common stock.
−Removed: In addition, if we are unable to continue to meet these requirements, we may not be able to remain listed on the Nasdaq Global Select Market, or Nasdaq.
−Removed: We are not currently required to comply with the SEC rules that implement Section 404 of the Sarbanes-Oxley Act and are therefore not required to make a formal assessment of the effectiveness of our internal control over financial reporting for that purpose.
−Removed: In addition, as an emerging growth company, our independent registered public accounting firm will not be required to attest to the effectiveness of our internal control over financial reporting pursuant to Section 404 until the later of the year following the filing of this Annual Report on Form 10-K or the date we are no longer an emerging growth company.
−Removed: If our internal control over financial reporting is not effective, our independent registered public accounting firm may issue an adverse report.
−Removed: As a public company, we are required to provide an annual management report on the effectiveness of our internal control over financial reporting commencing with our second Annual Report on Form 10-K.
+Added: In addition, testing and maintaining internal controls may divert our management’s attention from other matters that are important to our business.
+Added: If we are unable to establish and maintain appropriate internal control over financial reporting and disclosure controls and procedures, it could cause us to fail to meet our reporting obligations on a timely basis, result in material misstatements in our consolidated financial statements and harm our operating results.
+Added: Any failure to main tain effective internal control over financial reporting or disclosure controls and procedures could have an adverse effect on our business and operating results, and cause a decline in the price of our Class A common stock.
+Added: We also could become subject to investigations by the stock exchange on which our securities are listed, the SEC or other regulatory authorities, which could require additional financial and management resources.
+Added: Any failure to implement and maintain effective internal control over financial reporting also could adversely affect the results of periodic management evaluations and annual independent registered public accounting firm attestation reports regarding the effectiveness of our internal control over financial reporting.
+Added: Ineffective disclosure controls and procedures and internal control over financial reporting could also cause investors to lose confidence in our reported financial and other information, which could
+Added: have a negative effect on the trading price of our Class A common stock.
+Added: In addition, if we are unable to continue to meet these requirements, we may not be able to remain listed on Nasdaq.
+Added: Additionally, if our internal control over financial reporting is not effective, our independent registered public accounting firm may issue an adverse report.
+Added: As a public company, we are required to provide an annual management report on the effectiveness of our internal control over financial reporting.
Changes in financial accounting standards or practices may cause adverse, unexpected financial reporting fluctuations and affect our results of operations.
4 unchanged sentences
We could be required to collect additional sales, value added or similar taxes or be subject to other tax liabilities that may increase the costs our customers would have to pay for our solutions and adversely affect our results of operations.
−Removed: We have not collected sales, value added or similar indirect taxes in most jurisdictions in which we have sales.
+Added: While we have not historically collected sales, value added or similar indirect taxes from our customers in most jurisdictions in which we have sales, we expect to collect sales, value added, or similar indirect taxes from our customers in 2023.
One or more jurisdictions may seek to impose incremental or new sales, value added or other indirect tax collection obligations on us.
−Removed: Additionally, the Supreme Court of the United States ruled in South Dakota v.
−Removed: Wayfair, Inc.
−Removed: et al, or Wayfair, that online sellers can be required to collect sales and use tax despite not having a physical presence in the buyer’s state.
−Removed: In response to Wayfair, or otherwise, states or local governments may adopt, or begin to enforce, laws requiring us to calculate, collect and remit taxes on sales in their jurisdictions.
A successful assertion by one or more states, or foreign jurisdictions, requiring us to collect taxes where we presently do not do so, or to collect more taxes in a jurisdiction in which we currently do collect some taxes, could result in substantial tax liabilities, including taxes on past sales, as well as penalties and interest.
−Removed: The requirement to collect sales, value added or similar indirect taxes by foreign, state or local governments for sellers that do not have a physical presence in the jurisdiction could also create additional administrative burdens for us, put us at a competitive disadvantage if they do not impose similar obligations on our competitors, and decrease our future sales, which could have a material adverse effect on our business and results of operations.
+Added: Any requirement to collect sales, value added or si milar indirect taxes by foreign, state or local governments could also create additional administrative burdens for us and decrease our future sales, which could have a material adverse effect on our business and results of operations.
Changes in tax laws or regulations could have a material adverse effect on our business, results of operations, and financial conditions.
2 unchanged sentences
tax authorities.
−Removed: For example, the current administration has proposed numerous modifications to key provisions of the existing U.S.
−Removed: corporate income tax regime, including increased corporate tax rates (which may have retroactive application), promotion of a global minimum tax, and other changes that address taxes on profits from intangible assets and activities of foreign subsidiaries.
−Removed: Further, the Organization for Economic Co-operation and Development has proposed, and over 130 countries have agreed to back, a new global minimum tax rate that would apply regardless of the location of a company’s headquarters.
−Removed: Although it is uncertain if some or all of these proposals will be enacted and applicable to us, they could materially increase the amount of taxes we owe, thereby negatively impacting our results of operations as well as our cash flows from operations.
+Added: For example, beginning on January 1, 2022, the Tax Cuts and Jobs Act of 2017 eliminated the option to deduct research and development expenditures in the current period and requires taxpayers to capitalize and amortize these expenses.
+Added: As a result of this change, we expect to have taxable income in periods earlier than we would have had in the absence of this change, which could adversely impact our financial condition, operating results, and cash flows.
+Added: On August 16, 2022, the Inflation Reduction Act (IRA) of 2022 was signed into law to implement new tax provisions and provide various incentives and tax credits.
+Added: The IRA created a 15% corporate alternative minimum tax and an excise tax of 1% on stock repurchases from publicly traded US corporations, among other changes.
+Added: As of December 31, 2022, the Company has determined that neither this Act nor changes to income tax laws or regulations in other jurisdictions have a significant impact on our financial results and operations.
+Added: Any changes in tax legislation, regulations, policies, or practices in the jurisdictions in which we operate could materially increase the amount of taxes we owe, thereby negatively impacting our results of operations as well as our cash flows from operations.
Furthermore, our implementation of new practices and processes designed to comply with changing tax laws and regulations could require us to make substantial changes to our business practices, allocate additional resources, and increase our costs, potentially negatively affecting our business, results of operations, and financial condition.
24 unchanged sentences
Our NOLs may also be subject to limitations under state law.
−Removed: For example, California recently enacted legislation suspending the use of NOLs for taxable years 2020, 2021 and 2022 for many taxpayers.
There is a risk that due to legislative or regulatory changes, or other unforeseen reasons, our existing NOLs could expire or otherwise be unavailable to offset future income tax liabilities.
For these reasons, we may not be able to realize a tax benefit from the use of our NOLs, whether or not we attain profitability.
−Removed: Furthermore, our ability to utilize our NOLs is conditioned upon our becoming profitable in the future and generating U.S.
−Removed: federal taxable income.
−Removed: Since we do not know whether or when we will generate the U.S.
−Removed: federal taxable income necessary to utilize our remaining NOLs, the portion of our NOLs that was generated in taxable years beginning on or prior to December 31, 2017 could expire unused.
Risks Relating to Intellectual Property
46 unchanged sentences
Risks Relating to Ownership of Our Class A Common Stock
−Removed: The trading price of our Class A common stock has been and is likely to continue to be volatile or may decline regardless of our operating performance, and you may not be able to resell your shares at or above the price at which you purchased such shares.
−Removed: The market prices of the securities of other newly public companies have historically been highly volatile and markets in general have been highly volatile in light of the COVID-19 pandemic.
−Removed: The trading price of our Class A common stock may continue to fluctuate significantly in response to numerous factors, many of which are beyond our control, including:
−Removed: • overall performance of the equity markets and/or publicly-listed technology and fintech companies;
+Added: The trading price of our Class A common stock has been and is likely to continue to be volatile, which could cause the value of your investment to decline.
+Added: The market price of our Class A common stock has been and may continue to be highly volatile and could be subject to wide fluctuations.
+Added: This market volatility, as well as general economic, market, and political conditions, could reduce the market price of shares of our Class A common stock despite our operating performance.
+Added: In addition, our results of operations could be below the expectations of public market analysts and investors due to a number of potential factors, including:
+Added: • overall performance of the economy, equity markets, and/or publicly-listed technology and fintech companies;
• actual or anticipated fluctuations in our net revenue or other operating metrics;
1 unchanged sentence
• the financial projections we may provide to the public, any changes in those projections, or our failure to meet those projections;
−Removed: • failure of securities analysts to initiate or maintain coverage of us, changes in financial estimates by any securities analysts who follow our company, or our failure to meet the estimates or the expectations of investors;
−Removed: • the economy as a whole and market conditions in our industry;
−Removed: • changes to monetary policy, including the federal funds rate, set by the U.S.
−Removed: Federal Open Market Committee;
+Added: • failure of securities analysts to maintain coverage of us, changes in financial estimates by any securities analysts who follow our company, or our failure to meet the estimates or the expectations of investors;
• rumors and market speculation involving us or other companies in our industry;
• announcements by us or our competitors of significant innovations, new products, services or capabilities, acquisitions, strategic partnerships or investments, joint ventures, or capital commitments;
−Removed: • new laws or regulations or new interpretations of existing laws or regulations applicable to our business, including those related to data privacy and cybersecurity in the United States or globally;
+Added: • new laws or regulations or new interpretations of existing laws or regulations applicable to our business;
• lawsuits threatened or filed against us;
1 unchanged sentence
• developments or disputes concerning our intellectual property or other proprietary rights;
−Removed: • announced or completed acquisitions of businesses, products, services, or technologies by us or our competitors;
• changes in accounting standards, policies, guidelines interpretations or principles;
2 unchanged sentences
• sales of additional shares of our Class A common stock by us or our stockholders.
−Removed: In addition, stock markets, and the market for technology and fintech companies in particular, have experienced price and volume fluctuations that have affected and continue to affect the market prices of equity securities of many companies.
−Removed: Often, trading prices of many companies have fluctuated in ways unrelated or disproportionate to the operating performance of those companies.
−Removed: In the past, stockholders have filed securities class action litigation following periods of market volatility.
−Removed: If we were to become involved in securities litigation, it could subject us to substantial costs, divert resources and the attention of management from our business, and adversely affect our business, results of operations, and financial condition.
−Removed: Moreover, because of these fluctuations, comparing our results of operations on a period-to-period basis may not be meaningful.
+Added: Because of these fluctuations, comparing our results of operations on a period-to-period basis may not be meaningful.
You should not rely on our past results as an indication of our future performance.
This variability and unpredictability could also result in our failing to meet the expectations of industry or financial analysts or investors for any period.
−Removed: If our net revenue or results of operations fall below the expectations of analysts or investors or below any forecasts we may provide to the market, or if the forecasts we provide to the market are below the expectations of analysts or investors, the trading price of our Class A common stock could decline substantially.
−Removed: Such a trading price decline could occur even when we have met any previously publicly stated net revenue or earnings forecasts that we may provide.
−Removed: The dual class structure of our common stock has the effect of concentrating voting control with those stockholders who hold shares of our Class B common stock, including our directors, executive officers, and their respective affiliates.
−Removed: This ownership limits or precludes your ability to influence corporate matters, including the election of directors, amendments of our organizational documents, and any merger, consolidation, sale of all or substantially all of our assets, or other major corporate transaction requiring stockholder approval, and that may depress the trading price of our Class A common stock.
+Added: These broad market and industry factors may decrease the market share of our Class A common stock, regardless of our actual operating performance.
+Added: In addition, stock markets in general, and the market for technology and fintech companies in particular, have from time to time experienced extreme price and volume fluctuations that have affected and continue to affect the market prices of equity securities of many companies.
+Added: In the past, stockholders have often instituted securities class action litigation against a company following periods of overall market volatility and volatility in the market price of that company’s securities.
+Added: If we were to become involved in securities litigation, could result in substantial costs and divert resources and the attention of management.
+Added: The dual class structure of our common stock has the effect of concentrating voting control with those stockholders who hold shares of our Class B common stock, including our directors, executive officers, and their affiliates.
+Added: As a result of the dual class structure of our common stock, the trading price of our Class A common stock may be depressed.
Our Class B common stock has 10 votes per share, and our Class A common stock has one vote per share.
6 unchanged sentences
As a result, it is possible that one or more of the persons or entities holding our Class B common stock could gain significant voting control as other holders of Class B common stock sell or otherwise convert their shares into Class A common stock.
−Removed: We cannot predict the effect our dual class structure may have on the trading price of our Class A common stock.
−Removed: We cannot predict whether our dual class structure will result in a lower or more volatile trading price of our Class A common stock, adverse publicity, or other adverse consequences.
−Removed: For example, certain index providers have announced restrictions on including companies with multiple-class share structures in certain of their indices.
−Removed: In July 2017, FTSE Russell announced that it would require new constituents of its indices to have greater than 5% of the company’s voting rights in the hands of public stockholders, and S&P Dow Jones announced that it would no longer admit companies with multiple-class share structures to certain of its indices.
−Removed: Affected indices include the Russell 2000 and the S&P 500, S&P MidCap 400, and S&P SmallCap 600, which together make up the S&P Composite 1500.
−Removed: Under such announced policies, the dual class structure of our common stock would make us ineligible for inclusion in certain indices and, as a result, mutual funds, exchange-traded funds, and other investment vehicles that attempt to passively track those indices may not invest in our Class A common stock.
−Removed: These policies are relatively new and it is unclear what effect, if any, they will have or continue to have on the valuations of publicly traded companies excluded from such indices, but it is possible that they may depress valuations, as compared to similar companies that are included.
−Removed: Because of the dual class structure of our common stock, we will likely be excluded from certain indices and we cannot assure you that other stock indices will not take similar actions.
−Removed: Given the sustained flow of investment funds into passive strategies that seek to track certain indices, exclusion from certain stock indices would likely preclude investment by many of these funds and could make our Class A common stock less attractive to other investors.
−Removed: As a result, the trading price of our Class A common stock could be adversely affected.
−Removed: We are an emerging growth company, and any decision on our part to comply only with certain reduced reporting and disclosure requirements applicable to emerging growth companies could make our Class A common stock less attractive to investors.
−Removed: We are an emerging growth company, and, for as long as we continue to be an emerging growth company, we may choose to take advantage of exemptions from various reporting requirements applicable to other public companies but not to “emerging growth companies,” including:
−Removed: • not being required to have our independent registered public accounting firm audit our internal control over financial reporting under Section 404 of the Sarbanes Oxley Act;
−Removed: • reduced disclosure obligations regarding executive compensation in our periodic reports and Annual Report on Form 10-K;
−Removed: • exemptions from the requirements of holding a non-binding advisory vote on executive compensation and stockholder approval of any golden parachute payments not previously approved.
−Removed: We could be an emerging growth company for up to five years following the completion of our IPO.
−Removed: Our status as an emerging growth company will end as soon as any of the following takes place:
−Removed: • the last day of the fiscal year in which we have more than $1.07 billion in annual revenue;
−Removed: • the date we qualify as a “large accelerated filer,” with at least $700 million of equity securities held by non-affiliates;
−Removed: • the date on which we have issued, in any three-year period, more than $1.0 billion in non-convertible debt securities;
−Removed: • the last day of the fiscal year ending after the fifth anniversary of the completion of our IPO.
−Removed: We cannot predict if investors will find our Class A common stock less attractive if we choose to rely on the exemptions afforded emerging growth companies.
−Removed: If some investors find our Class A common stock less attractive because we rely on any of these exemptions, there may be a less active trading market for our Class A common stock and the trading price of our Class A common stock may be more volatile.
−Removed: Under the Jumpstart our Business Startups Act, or JOBS Act, emerging growth companies can also delay adopting new or revised accounting standards until such time as those standards apply to private companies.
−Removed: We have elected to use this extended transition period for complying with new or revised accounting standards that have different effective dates for public and private companies until the earlier of the date we (i) are no longer an emerging growth company or (ii) affirmatively and irrevocably opt out of the extended transition period provided in the JOBS Act.
−Removed: As a result, our financial statements may not be comparable to companies that comply with new or revised accounting pronouncements as of public company effective dates.
−Removed: If securities or industry analysts do not publish research, or publish inaccurate or unfavorable research, about our business, the trading price of our Class A common stock and trading volume could be adversely affected.
−Removed: The trading market for our Class A common stock will depend in part on the research and reports that securities or industry analysts publish about us or our business.
−Removed: If few securities analysts cover us, or if industry analysts cease coverage of us, the trading price for our Class A common stock would be negatively affected.
−Removed: If one or more of the analysts who cover us downgrade our Class A common stock or publish inaccurate or unfavorable research about our business, our Class A common stock trading price would likely decline.
−Removed: If one or more of these analysts cease coverage of us or fail to publish reports on us on a regular basis, demand for our Class A common stock could decrease, potentially causing our Class A common stock trading price and trading volume to decline.
−Removed: Sales of substantial amounts of our Class A common stock in the public markets, or the perception that sales might occur, could cause the trading price of our Class A common stock to decline.
−Removed: Sales of a substantial number of shares of our Class A common stock into the public market, particularly sales by our directors, executive officers, and principal stockholders, or the perception that these sales might occur, could cause the trading price of our Class A common stock to decline.
−Removed: While shares held by directors, executive officers, and other affiliates are subject to volume limitations under Rule 144 under the Securities Act of 1933, as amended, or the Securities Act, and various vesting agreements, we are unable to predict the timing of or the effect that such sales may have on the prevailing market price of our common stock.
+Added: Our dual class structure may also depress the trading price of our Class A common stock due to negative perceptions by market participants and other stakeholders.
+Added: Certain index providers have announced restrictions on including companies with multiple class share structures in certain of their indexes.
+Added: Similarly, several stockholder advisory firms have announced their opposition to the use of multiple class structures.
+Added: Any exclusion from indices or criticism of our corporate governance practices by stockholder advisory firms could result in a less active trading market for our Class A common stock.
+Added: Our issuance of additional capital stock may dilute your ownership and adversely affect the market price of our Class A common stock.
+Added: We expect to issue additional capital stock in the future that will result in dilution to all other stockholders.
+Added: For example, we may attempt to obtain financing or to further increase our capital resources by issuing additional shares of our Class A common stock or securities convertible into shares of our Class A common stock or offering debt or other securities.
+Added: We could also issue shares of our Class A common stock or securities convertible into our Class A common stock or debt or other securities in connection with acquisitions or other strategic transactions.
+Added: Additionally, we expect to grant equity awards to employees, directors, and consultants under our stock incentive plan.
+Added: Any Class A common stock or securities convertible into shares of our Class A common stock that we issue from time to time, including in connection with a financing, acquisition, investment or under any equity incentive plans or that we may adopt in the future, will dilute your percentage ownership.
+Added: In addition, issuing additional shares of our Class A common stock or securities convertible into our Class A common stock or debt or other securities may dilute the economic and voting rights of our existing stockholders and would likely reduce the market price of our Class A common stock both upon issuance and conversion, in the case of securities convertible into our Class A common stock.
+Added: As of December 31, 2022, unrecognized compensation costs related to unvested RSUs and unvested outstanding stock options, excluding the Executive Chairman Long-Term Performance Award, formerly known as the CEO Long-Term Performance Award, were $296.0 million and $58.6 million, respectively.
+Added: These costs are expected to be recognized over a weighted-average period of 3.3 years and 2.4 years, respectively.
+Added: In April and May 2021, our board of directors granted our Executive Chairman and then-Chief Executive Officer equity incentive awards in the form of performance-based stock options covering 19,740,923 and 47,267 shares of our Class B common stock with an exercise price of $21.49 and $23.40 per share, respectively, or, collectively, the Executive Chairman Long-Term Performance Award.
+Added: The Executive Chairman Long-Term Performance Award vests upon the satisfaction of a service condition and the achievement of certain stock price goals.
+Added: As of December 31, 2022, the aggregate unrecognized compensation cost related to the Executive Chairman Long-Term Performance Award was $117.0 million, which is expected to be recognized over the remaining derived service period of 3.1 years.
In addition, as of December 31, 2022, we had 36,156,445 option shares outstanding that, if fully vested and exercised, would result in the issuance of an equal number of shares of Class B common stock or Class A common stock, as well as 34,146,546 total shares of Class B or Class A common stock subject to RSU awards.
2 unchanged sentences
Certain holders of our Class B common stock have rights, subject to some conditions, to require us to file registration statements for the public resale of the Class A common stock issuable upon conversion of such shares or to include such shares in registration statements that we may file for us or other stockholders.
−Removed: Any registration statement we file to register additional shares, whether as a result of registration rights or otherwise, could cause the trading price of our Class A common stock to decline or be volatile.
−Removed: Our issuance of additional capital stock in connection with financings, acquisitions, investments, our stock incentive plans or otherwise will dilute all other stockholders and could negatively affect our results of operations.
−Removed: We expect to issue additional capital stock in the future that will result in dilution to all other stockholders.
−Removed: We expect to grant equity awards to employees, directors, and consultants under our stock incentive plan.
−Removed: We may also raise capital through equity financings in the future.
−Removed: As part of our business strategy, we may acquire or make investments in complementary companies, products, or technologies and issue equity securities to pay for any such acquisition or investment.
−Removed: Any such issuances of additional capital stock may cause stockholders to experience significant dilution of their ownership interests and the per share value of our Class A common stock to decline.
−Removed: Any additional grants of equity awards under our stock incentive plans will also increase share-based compensation expense and negatively affect our results of operations.
−Removed: As of December 31, 2021, unrecognized compensation costs related to unvested RSUs and unvested outstanding stock options, excluding the CEO Long-Term Performance Award, were $136.1 million and $90.4 million, respectively.
−Removed: These costs are expected to be recognized over a weighted-average period of 3.0 years and 2.5 years, respectively.
−Removed: In April and May 2021, our board of directors granted our Chief Executive Officer equity incentive awards in the form of performance-based stock options covering 19,740,923 and 47,267 shares of our Class B common stock with an exercise price of $21.49 and $23.40 per share, respectively, or, collectively, the CEO Long-Term Performance Award.
−Removed: The CEO Long-Term Performance Award vests upon the satisfaction of a service condition and the achievement of certain stock price goals.
−Removed: As of December 31, 2021, the aggregate unrecognized compensation cost related to the CEO Long-Term Performance Award was $170.2 million, which is expected to be recognized over the remaining derived service period of 4.1 years.
We do not intend to pay dividends on our Class A common stock in the foreseeable future and, consequently, the ability of Class A common stockholders to achieve a return on investment will depend on appreciation in the trading price of our Class A common stock.
38 unchanged sentences
General Risk Factors
−Removed: Our business is subject to the risks of earthquakes, fire, floods, and other natural catastrophic events, and to interruption by man-made problems such as power disruptions, computer viruses, data security breaches, or terrorism.
−Removed: Our corporate headquarters are located in the San Francisco Bay Area, a region known for seismic activity and wildfires.
−Removed: A significant natural disaster, such as an earthquake, fire, or flood, occurring at our headquarters, at one of our other facilities, or where a vendor is located, could adversely affect our business, results of operations, and financial condition.
−Removed: Further, if a natural disaster or man-made problem were to affect our vendors, this could adversely affect the ability of our Customers to use our Platform.
−Removed: In addition, natural disasters and acts of terrorism or war (including the significant military action against Ukraine launched by Russia and any related political or economic responses and counter-responses or otherwise by various global actors or general effect on the global economy) could cause disruptions in our or our Customers’ businesses, national economies, or the world economy as a whole.
−Removed: Health concerns or political or governmental developments in countries where we or our Customers and vendors operate could result in economic, social, or labor instability and could have a material adverse effect on our business, results of operations, and financial condition.
−Removed: We also rely on our network and third-party infrastructure and enterprise applications and internal technology systems for our engineering, sales and marketing, and operations activities.
−Removed: Although we maintain incident management and disaster response plans, in the event of a major disruption caused by a natural disaster or man-made problem, we may be unable to continue our operations in part or in full and may endure system interruptions, reputational harm, delays in our development activities, lengthy interruptions in service, breaches of data security and loss of critical data, any of which could adversely affect our business, results of operations, and financial condition.
−Removed: In addition, computer malware, viruses, computer hacking, fraudulent use attempts, and phishing attacks have become more prevalent generally and in our industry, have occurred on our Platform in the past, and may occur on our Platform in the future, including as retaliation against financial institutions for sanctions imposed against Russia as a result of the significant military action against Ukraine launched by Russia.
−Removed: Though it is difficult to determine fully what, if any, harm may directly result from any specific interruption or attack, any failure to maintain performance, reliability, security, integrity, and availability of our products and technical infrastructure to the satisfaction of our Customers may harm our reputation and our ability to retain existing Customers and attract new Customers.
+Added: Our business is subject to the risks of earthquakes, fire, floods, pandemics and other natural catastrophic events, and to interruption by man-made issues such as power disruptions and strikes.
+Added: Our systems and operations are vulnerable to damage or interruption from earthquakes, fires, floods, power losses, telecommunications failures, strikes, health pandemics, such as the COVID-19 pandemic, and similar events.
+Added: For example, our corporate headquarters are located in the San Francisco Bay Area, a region known for seismic activity and wildfires, and a significant natural disaster in that area or any other location in which we have offices or facilities or employees working remotely, such as an earthquake, fire, or flood, could have a material adverse effect on our business, results of operations financial condition, and future prospects.
+Added: Our insurance coverage may be insufficient to comp ensate us for the losses that may occur.
+Added: In addition, strikes, wars, terrorism, and other geopolitical unrest could cause disruptions in our business and lead to interruptions, delays, or loss of critical data.
+Added: If a natural disaster, power outage, connectivity issue, or other event occurs that impacts our employees’ ability to work remotely, our business and results of operations could be adversely affected.
+Added: We may not have sufficient protection or recovery plans in certain circumstances, such as a significant natural disaster, and our business interruption insurance may be insufficient to compensate us for losses that may occur.
The requirements of being a public company may strain our resources, divert management’s attention and affect our ability to attract and retain executive management and qualified board members.
1 unchanged sentence
We expect that the requirements of these rules and regulations will continue to increase our legal, accounting, and financial compliance costs, make some activities more difficult, time-consuming and costly, and place significant strain on our personnel, systems, and resources.
−Removed: For example, the Exchange Act requires, among other things, that we file annual, quarterly, and current reports with respect to our business and results of operations.
+Added: For example, the Exchange Act requires, among other things, that we file annual, quarterly, and current reports with respect to our business and results of operations and comply with the Sarbanes-Oxley Act and other regulations.
As a result of the complexity involved in complying with the rules and regulations applicable to public companies, our management’s attention may be diverted from other business concerns, potentially adversely affecting our business, results of operations, and financial condition.
11 unchanged sentences
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.