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In addition, in the past, the growth and expansion of our business has placed significant demands on our management, operational, risk management, technology, marketing, compliance and finance and accounting infrastructure, and resulted in increased expenses, and we may not be able to increase our revenue sufficiently to offset such higher expenses.
−Removed: Overall revenue growth depends on a number of factors, including our ability to increase the origination volume of our products and services, attract new members and retain existing members, build our brand, expand and manage our remote-first workforce, all while managing our business systems, operations and expenses.
+Added: Overall revenue growth depends on a number of factors, including our ability to increase the origination volume of our products and services, attract new members and retain existing members, build our brand, manage our remote-first workforce, all while managing our business systems, operations and expenses.
If we are unable to accomplish these tasks, our future growth may be harmed.
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If our relationship with Pathward terminates, or if Pathward were to suspend, limit, or cease its operations or loan origination activities for any reason, and we are unable to engage another originating bank partner on a timely basis or at all, our business, results of operations and financial condition would be materially and adversely affected.
−Removed: As of March 31, 2026, we relied on Pathward to originate a substantial portion of our loan originations, with the remaining loans being originated directly by us under our lending and servicing licenses across 2 states in the United States.
−Removed: In the three months ended March 31, 2026 and 2025, Pathward originated approximately 99% and 97% of aggregate personal loan originations, respectively.
−Removed: In 2025, we entered into an amended and restated program agreement, as amended, to extend our partnership with Pathward through 2029, which replaced the prior agreement in its entirety and governs the ongoing terms of our relationship.
+Added: As of June 30, 2026, we relied on Pathward to originate a substantial portion of our loan originations, with the remaining loans being originated directly by us under our lending and servicing licenses across 2 states in the United States.
+Added: In the three months ended June 30, 2026 and 2025, Pathward originated approximately 99% and 97% of aggregate personal loan originations, respectively.
+Added: In 2025, we entered into an amended and restated program agreement to extend our partnership with Pathward through 2029, which replaced the prior agreement in its entirety and governs the ongoing terms of our relationship.
The amended and restated program agreement has an initial term of four years and will automatically renew for successive two-year periods following the initial four-year term, unless either party provides notice of its intent to not renew.
We or Pathward may terminate our arrangement immediately upon a material breach by the other party and failure to cure such breach within a cure period, if any representations or warranties are found to be false and such error is not cured within a cure period, bankruptcy or insolvency of either party, receipt of an order or judgment by a governmental entity, a material adverse effect, or a change of control.
−Removed: If our bank partnership arrangement with Pathward were to be suspended or limited, including a reduction in the volume of loans that Pathward chooses to originate, or if Pathward ceased their operations or otherwise terminated their relationship with us, our business, financial condition and results of operations would be adversely affected.
+Added: If our bank partnership arrangement with Pathward were to be suspended or limited, including a reduction in the volume of loans that Pathward chooses to originate, or if Pathward ceased its operations or otherwise terminated its relationship with us, our business, financial condition and results of operations would be adversely affected.
If we need to enter into alternative arrangements with a different bank to replace or supplement our existing arrangement, we may not be able to negotiate a comparable alternative arrangement in a timely manner or at all and transitioning loan originations to a new bank may result in delays in the issuance of new loans.
In addition, if we are unable to enter into an alternative arrangement with a different bank to fully replace or supplement our relationship with Pathward, we would potentially need to obtain additional state licenses to enable us to originate loans directly in the states where Pathward originates loans, as well as comply with other state and federal laws, which would be costly and time consuming, and there can be no assurances that any such licenses could be obtained in a timely manner or at all.
−Removed: For a further discussion of the risks and regulations applicable to our bank partnership with Pathward, see “Risk Factors—Our bank partnership products may lead to regulatory risk and may increase our regulatory burden, —We are, and intend in the future to continue, expanding into new geographic regions, and our failure to
−Removed: comply with applicable laws or regulations, or accurately predict demand or growth, related to these geographic regions could have an adverse effect on our business, —Security breaches and incidents may harm our reputation, adversely affect our results of operations, and expose us to liability.”
+Added: For a further discussion of the risks and regulations applicable to our bank partnership with Pathward, see “Risk Factors—Our bank partnership products may lead to regulatory risk and may increase our regulatory burden, —We are, and intend in the future to continue, expanding into new geographic regions, and our failure to comply with
+Added: applicable laws or regulations, or accurately predict demand or growth, related to these geographic regions could have an adverse effect on our business, —Security breaches and incidents may harm our reputation, adversely affect our results of operations, and expose us to liability.”
Our results of operations and future prospects depend on our ability to retain existing members and attract new members.
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In particular, it is important that we continue to ensure that our members with loans remain loyal to us and we continue to extend loans to members who have successfully repaid their previous loans.
−Removed: As of March 31, 2026 and 2025, members with repeat loans comprised 79% and 78%, respectively, of our Owned Principal Balance at End of Period.
+Added: As of June 30, 2026 and 2025, members with repeat loans comprised 80% and 77%, respectively, of our Owned Principal Balance at End of Period.
If our repeat loan rates decline, we may not realize consistent or improved operating results from our existing member base.
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We use estimates and assumptions in determining the fair value of our loans receivable held for investment and asset-backed notes.
−Removed: Our Loans Receivable at Fair Value represented 88% of our total assets and our Asset-backed notes at Fair Value represented 7% of our total liabilities as of March 31, 2026.
+Added: Our Loans Receivable at Fair Value represented 87% of our total assets and our Asset-backed notes at Fair Value represented 5% of our total liabilities as of June 30, 2026.
The fair value of our loans receivable held for investment are determined using Level 3 inputs and the fair value of our asset-backed notes are determined using Level 2 inputs.
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In the event that the spread between the interest rate at which we lend to our members and the rate at which we borrow from our lenders decreases, our Net Revenue will decrease.
−Removed: We have capped the APR for newly originated loans at 36% since August 2020.
Interest rates continue to fluctuate, which may increase our interest expense and cost of funds and may result in lower operating margins.
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If our contact center operations become constrained for any reason, the effectiveness of our collection activities may be reduced.
−Removed: Our net charge-off rate depends on the collectability of our loans and if we experience an unexpected significant increase in the number of members who fail to repay their loans or an increase in the principal amount of the loans that are not repaid, our revenue and results of operations
−Removed: could be adversely affected.
+Added: Our net charge-off rate depends on the collectability of our loans and if we experience an unexpected significant increase in the number of members who fail to repay their loans or an increase in the principal amount of the loans that are not repaid, our revenue and results of operations could be adversely affected.
Furthermore, personal unsecured loans are generally dischargeable in bankruptcy.
−Removed: If we experience an unexpected, significant increase in the number of members who successfully discharge their debt in a bankruptcy action, our results of operations could be adversely affected.
+Added: If we experience an unexpected,
+Added: significant increase in the number of members who successfully discharge their debt in a bankruptcy action, our results of operations could be adversely affected.
We incorporate our estimate of lifetime loan losses in our measurement of fair value for our loans receivable held for investment.
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For example, in 2023, we announced the sunsetting of our checking account product, the sunsetting of our partnership with Sezzle, and the discontinuation of our investing and retirement products, in order to strategically realign our resources to focus on other products, as well as to reduce our expenses and simplify our business.
−Removed: Further, on September 24, 2024, we signed a
−Removed: definitive agreement to sell our credit cards receivable portfolio, and we completed the sale of our credit cards receivable portfolio on November 12, 2024.
+Added: Further, on September 24, 2024, we signed a definitive agreement to sell our credit cards receivable portfolio, and we completed the sale of our credit cards receivable portfolio on November 12, 2024.
Failure to achieve the anticipated benefits from the discontinuation or sale of these products could adversely affect our results of operations.
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If the management team, including any new hires that we make, fails to work together effectively and to execute our plans and strategies on a timely basis then our business and future growth prospects could be harmed.
−Removed: We recently announced the appointment of Doug Bland as our Chief Executive Officer, following the transition of our former Chief Executive Officer.
Changes in our executive management team resulting from the hiring or departure of executives, including key personnel or members of senior management, could disrupt our operations and impact our ability to attract, integrate, retain and motivate employees, and have an adverse effect on our business.
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These systems may be subject to damage or interruption from, among other things, earthquakes, adverse weather conditions, other natural disasters, terrorist attacks, rogue employees, power loss, telecommunications failures, technological errors or outages, and cybersecurity risks.
−Removed: Like other financial and technology services firms, we have been and continue to be the subject of actual or attempted unauthorized access, mishandling or misuse of information, computer viruses, ransomware or other malware, and cyber-attacks that could obtain or disclose confidential information, destroy data, disrupt or degrade service, threaten the integrity and availability of our systems, distributed denial of service attacks, social engineering, security breaches and incidents, and
−Removed: infiltration, exfiltration or other similar events.
−Removed: Our adoption of remote working arrangements for our corporate and many of our contact center employees may result in increased consumer or employee privacy, security, and fraud concerns arising from the increased electronic transfer and other online activity.
+Added: Like other financial and technology services firms, we have been and continue to be the subject of actual or attempted unauthorized access, mishandling or misuse of information, computer viruses, ransomware or other malware, and cyber-attacks that could obtain or disclose confidential information, destroy data, disrupt or degrade service, threaten the integrity and availability of our systems, distributed denial of service attacks, social engineering, security breaches and incidents, and infiltration, exfiltration or other similar events.
+Added: Our adoption of remote working arrangements for our corporate and many of our contact center employees may result in increased consumer or employee privacy, security, and fraud concerns arising from the increased electronic transfer and
+Added: other online activity.
For example, our employees are accessing our servers remotely through home or other networks to perform their job responsibilities and such security systems may be less secure than those used in our offices, which may subject us to increased security risks, including cybersecurity-related events, and expose us to risks of data or financial loss and associated disruptions to our business operations.
−Removed: Techniques used in cybersecurity attacks to obtain unauthorized access, disable or sabotage information technology systems change frequently, as data breaches and other cybersecurity events have become increasingly commonplace, including as a result of the intensification of state-sponsored cybersecurity attacks during periods of geopolitical conflict, such as the ongoing conflicts in Ukraine and recent escalation of hostilities in the Middle East.
+Added: Techniques used in cybersecurity attacks to obtain unauthorized access, disable or sabotage information technology systems change frequently, as data breaches and other cybersecurity events have become increasingly commonplace, including as a result of the intensification of state-sponsored cybersecurity attacks during periods of geopolitical conflict, such as the ongoing conflicts in Ukraine and escalation of hostilities in the Middle East.
We have seen, and will continue to see, industry-wide vulnerabilities, which could affect our or other parties’ systems.
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technologies may create additional cybersecurity risks or increase cybersecurity risks, including risks of security breaches and incidents.
−Removed: Further, A.I.
−Removed: technologies may be used in connection with certain cybersecurity attacks, resulting in heightened risks of security breaches and incidents.
+Added: Further, certain A.I.
+Added: technologies may be used to identify and exploit security vulnerabilities, and otherwise may be used in connection with certain cybersecurity attacks, resulting in heightened risks of security breaches and incidents and of more impactful security breaches and incidents.
While we regularly monitor data flow inside and outside the company, attackers have become very sophisticated in the way they conceal access to systems, and we may not be aware that we have been attacked or otherwise have suffered a security breach or incident.
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However, we cannot be certain that our coverage will continue to be available on economically reasonable terms or will be available in sufficient amounts to cover one or more large claims, or that the insurer will not deny coverage as to any future claim.
−Removed: The successful assertion of one or more large claims against us that exceed available insurance coverage, or the
−Removed: occurrence of changes in our insurance policies, including premium increases or the imposition of large deductible or co-insurance requirements, could have an adverse effect on our business and financial condition.
+Added: 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, including premium increases or the imposition of large deductible or co-insurance requirements, could have an adverse effect on our business and financial condition.
Our retail locations also process physical member loan documentation that contain confidential information about our members, including financial and personal information.
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Further, the concentration of our outstanding receivables in one or more states would have a disproportionate effect on us if governmental authorities in any of those states take action against us or take action affecting how we conduct our business.
−Removed: As of March 31, 2026, 36.2%, 27.0%, 12.4%, 6.6% and 4.8% of our Owned Principal Balance at End of Period related to members from California, Texas, Florida, Illinois and New Jersey, respectively.
+Added: As of June 30, 2026, 35.7%, 26.6%, 12.4%, 6.7% and 4.9% of our Owned Principal Balance at End of Period related to members from California, Texas, Florida, Illinois and New Jersey, respectively.
If any of the events noted in these risk factors were to occur in or have a disproportionate impact in regions where we operate or plan to commence operations, it may negatively affect our business in many ways, including increased delinquencies and loan losses or a decrease in future originations.
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In 2024, following the bankruptcy of a fintech platform, regulators have expanded expectations for third-party oversight by banks engaged in bank partnership programs.
−Removed: If regulators conclude that our bank partners have not met the heightened
−Removed: standards for oversight of their third-party service providers, any resulting regulatory action could have an adverse effect on their ability to fulfill their contractual obligations to us which could adversely affect our business, financial condition and results of operations.
+Added: If regulators conclude that our bank partners have not met the heightened standards for oversight of their third-party service providers, any resulting regulatory action could have an adverse effect on their ability to fulfill their contractual obligations to us which could adversely affect our business, financial condition and results of operations.
In some cases, third-party vendors are the sole source, or one of a limited number of sources, of the services they provide to us.
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Our international operations involve inherent risks which could result in harm to our business.
−Removed: As of March 31, 2026, we had 1,578 employees in Mexico, including employees related to our two contact centers.
+Added: As of June 30, 2026, we had 1,528 employees in Mexico, including employees related to our two contact centers.
These employees provide certain English/Spanish bilingual support related to member-facing contact center activities, administrative and technology support of the contact centers and back-office support services.
−Removed: In addition, we have a technology development center in India, where we had 205 employees as of March 31, 2026.
+Added: In addition, we have a technology development center in India, where we had 200 employees as of June 30, 2026.
We have also previously engaged vendors that utilized employees or contractors based outside of the U.S.
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A significant natural disaster, such as an earthquake, fire, hurricanes, flood or other catastrophic event (many of which are becoming more acute and frequent as a result of climate change), or interruptions by strikes, crime, terrorism, social unrest, cyber-attacks, computer viruses, internal or external system failures, telecommunications failures, a failure of banking or other financial institutions, pandemics or other public health crises, power outages or disruptions, political instability, geopolitical unrest, war, or other large-scale conflicts or unpredictable occurrences, could have an adverse effect on our business, results of operations and financial condition.
−Removed: For example, a significant natural disaster in Northern California or any
−Removed: other location in which we have offices or facilities or employees working remotely, could adversely affect our business operations, financial condition and prospects, and our insurance coverage may be insufficient to compensate us for losses that may occur.
+Added: For example, a significant natural disaster in Northern California or any other location in which we have offices or facilities or employees working remotely, could adversely affect our business operations, financial condition and prospects, and our insurance coverage may be insufficient to compensate us for losses that may occur.
Our IT systems are backed up regularly to highly available, alternate data centers in a different region, and we have conducted disaster recovery testing of our mission critical systems.
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To support our collateral requirements under our financing agreements, we use a random selection process to take loans off our warehouse line to pledge to our securitizations.
−Removed: An inability to originate enough loans to meet the
−Removed: collateral requirements in our financing arrangements could result in the early amortization, default and/or acceleration of our existing facilities.
+Added: An inability to originate enough loans to meet the collateral requirements in our financing arrangements could result in the early amortization, default and/or acceleration of our existing facilities.
Moreover, we currently act as servicer with respect to the unsecured consumer loans held by our subsidiaries.
−Removed: If we default in our servicing obligations or fail to meet certain financial covenants, an early amortization event or event of default could occur, and/or we could be replaced by our back-up servicer or another successor servicer.
+Added: If we default in our servicing obligations or fail to meet certain financial covenants, an early amortization event or event of default could occur, and/or we could be replaced by our
+Added: back-up servicer or another successor servicer.
If the back-up servicer or successor servicer is not adequate, the collection and processing of repayments may be impaired.
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Demand for our loans at the current premiums may be impacted by factors outside our control, including availability of loan pools, demand by investors for loan assets and attractiveness of returns offered by competing investment alternatives offered by other loan originators with more attractive characteristics than our loan pools and loan purchaser interest.
−Removed: If we are unable to sell additional loans or obtain other financing, our
−Removed: revenue and liquidity may be negatively impacted and we may not be able to grow our business as planned and we may have to further curtail our originations.
+Added: If we are unable to sell additional loans or obtain other financing, our revenue and liquidity may be negatively impacted and we may not be able to grow our business as planned and we may have to further curtail our originations.
Our results of operations are affected by our ability to sell our loans for a premium over their net book value.
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We may also be obligated to indemnify parties or pay substantial settlement costs, including royalty payments, and to modify applications or refund fees.
−Removed: Even if we were to prevail in such a dispute, any
−Removed: litigation regarding our intellectual property could be costly and time consuming, and may divert the attention of our management and key personnel from our business operations.
+Added: Even if we were to prevail in such a dispute, any litigation regarding our intellectual property could be costly and time consuming, and may divert the attention of our management and key personnel from our business operations.
Moreover, it has become common in recent years for individuals and groups to purchase intellectual property assets for the sole purpose of making claims of infringement and attempting to extract settlements from companies such as ours.
−Removed: Even in instances where we believe that claims and allegations of intellectual property infringement against us are without merit, defending against such claims is time consuming and expensive and could result in the diversion of time and attention of our management and employees.
+Added: Even in instances where we believe that claims
+Added: and allegations of intellectual property infringement against us are without merit, defending against such claims is time consuming and expensive and could result in the diversion of time and attention of our management and employees.
In addition, although in some cases a third party may have agreed to indemnify us for such costs, such indemnifying party may refuse or be unable to uphold its contractual obligations.
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State attorneys general also have a variety of legal mechanisms at their disposal to enforce state and federal consumer financial laws and have enforcement authority under state law with respect to unfair or deceptive practices.
−Removed: Generally, under these statutes, state attorneys general may conduct investigations, bring actions, and recover civil penalties or obtain injunctive relief against
−Removed: entities engaging in unfair, deceptive, or fraudulent acts.
+Added: Generally, under these statutes, state attorneys general may conduct investigations, bring actions, and recover civil penalties or obtain injunctive relief against entities engaging in unfair, deceptive, or fraudulent acts.
Attorneys general may also coordinate among themselves or with other regulators to enter into coordinated actions or settlements.
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The CID was disclosed and discussed during the acquisition process.
−Removed: The stated purpose of the CID is to determine whether Digit, in connection with offering its products or services, misrepresented the terms, conditions, or costs of the products or services in a manner that is unfair, deceptive, or abusive.
+Added: The stated purpose of the CID was to determine whether Digit, in connection with offering its products or services, misrepresented the terms, conditions, or costs of the products or services in a manner that is unfair, deceptive, or abusive.
While the Company believes that the business practices of the Company, including Digit, have been in full compliance with applicable laws, in the interest of resolving this matter, on August 11, 2022, Digit agreed to a consent order with the CFPB resolving such CID.
−Removed: In connection with such consent order, Digit agreed to implement a redress and compliance plan to pay at least $68,145 in consumer redress to consumers who may have been harmed and paid a $2.7 million civil penalty to the CFPB in the third quarter of 2022.
In addition, actions by regulatory bodies, including the CFPB, could result in requirements to alter or cease offering affected financial products and services, making them less attractive and restricting our ability to offer them.
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The final rule has been challenged in the Eastern District Court of Kentucky.
−Removed: On July 29, 2025, the Eastern District of Kentucky issued an Order granting the stay of litigation requested by the CFPB while it works to promulgate a new rule-making process to revise the rule’s scope, definitions and timing.
+Added: On July 29, 2025, the Eastern District of Kentucky issued an Order granting the stay of litigation requested by the
+Added: CFPB while it works to promulgate a new rule-making process to revise the rule’s scope, definitions and timing.
Compliance deadlines are uncertain since the CFPB has been enjoined from enforcing the rule and the April 1, 2026 deadline for the largest institutions has passed without action from the CFPB, and the rule’s ultimate substantive obligations could change materially.
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Our bank partnership products may lead to regulatory risk and may increase our regulatory burden.
−Removed: We currently have bank partnership programs with Pathward to offer unsecured personal loans, secured personal loans, and provide deposit accounts, and other transaction services to our members.
+Added: We currently have bank partnership programs with Pathward and Column banks to offer unsecured personal loans, secured personal loans, and provide deposit accounts, and other transaction services to our members.
State and federal agencies have broad discretion in their interpretation of laws and their interpretation of requirements related to bank partnership programs and may elect to alter standards or the interpretation of the standards applicable to these programs.
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To the extent that the SEC staff publishes new or different guidance with respect to these matters, we may be required to adjust our business operations accordingly.
−Removed: If we are deemed to be an investment company, we may attempt to
−Removed: seek exemptive relief from the SEC, which could impose significant costs and delays on our business.
+Added: If we are deemed to be an investment company, we may attempt to seek exemptive relief from the SEC, which could impose significant costs and delays on our business.
We may not receive such relief on a timely basis, if at all, and such relief may require us to modify or curtail our operations.
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The issuance of shares of our common stock upon exercise of our outstanding warrants issued in connection with our Corporate Financing, would increase the number of shares eligible for future resale in the public market and result in dilution to our stockholders.
−Removed: As of March 31, 2026, warrants to purchase 2,682,788 shares of our common stock issued in connection with our Corporate Financing, remain outstanding and exercisable.
+Added: As of June 30, 2026, warrants to purchase 2,588,375 shares of our common stock issued in connection with our Corporate financing, remain outstanding and exercisable.
The exercise price of these warrants is $0.01 per share.
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Our ability to use our net operating loss carryforwards and certain other tax attributes may be limited.
−Removed: As of December 31, 2025, the Company had federal net operating loss carryforwards of $150.9 million, all of which carry forward indefinitely.
−Removed: Additionally, the Company had state net operating loss carryforwards of $136.8 million which are set to begin expiring in 2031.
−Removed: As of December 31, 2025, the Company had federal and California research and development tax credit carryforwards of $19.6 million and $8.4 million, respectively.
+Added: As of December 31, 2025, we had federal net operating loss carryforwards of $150.9 million, all of which carry forward indefinitely.
+Added: Additionally, we had state net operating loss carryforwards of $136.8 million which are set to begin expiring in 2031.
+Added: As of December 31, 2025, we had federal and California research and development tax credit carryforwards of $19.6 million and $8.4 million, respectively.
The federal research and development tax credit carryforwards expire beginning in 2041, and the California research and development tax credits are not subject to expiration.
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They may also have interests that differ from yours, and they may vote in a way with which you disagree or which may be adverse to your interests.
−Removed: concentration of ownership may have the effect of delaying, preventing or deterring a change of control of our company, could deprive our stockholders of an opportunity to receive a premium for their common stock as part of a sale of our company and might ultimately affect the market price of our common stock.
+Added: This concentration of ownership may have the effect of delaying, preventing or deterring a change of control of our company, could deprive our stockholders of an opportunity to receive a premium for their common stock as part of a sale of our company and might ultimately affect the market price of our common stock.
The requirements of being a public company may strain our resources, divert management’s attention and affect our ability to attract and retain qualified Board members.
28 unchanged sentences
Certain of our executive officers may be entitled, pursuant to the terms of their employment arrangements, to accelerated vesting of their stock options following a change of control of our company under certain conditions.
−Removed: In addition to the arrangements currently in place with some of our
−Removed: executive officers, we may enter into similar arrangements in the future with other officers.
+Added: In addition to the arrangements currently in place with some of our executive officers, we may enter into similar arrangements in the future with other officers.
Such arrangements could delay or discourage a potential acquisition.
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Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.