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Our operations and financial results are subject to various risks and uncertainties, including those described below, which could adversely affect our business, financial condition, results of operations, cash flows, and the trading price of our common and capital stock.
−Removed: You should carefully consider the risks and uncertainties described below in addition to the other information set forth in this Quarterly Report on Form 10-Q, including the section titled “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and our consolidated financial statements and related notes, before making any investment in our common stock.
+Added: You should carefully consider the risks and uncertainties described below in addition to the other information set forth in this Quarterly Report, including in “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and our consolidated financial statements and related notes, before making any investment in our common stock.
The risks and uncertainties described below are not the only ones we face.
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If we are unable to obtain additional capital or are unable to obtain additional capital on satisfactory terms, our ability to continue to support our business growth or to respond to business opportunities, challenges, or other circumstances could be adversely affected, and our business may be harmed.
−Removed: If we experience security breaches, we could be exposed to liability and our reputation and business could suffer.
+Added: If we experience security breaches or incidents, we could be exposed to liability and our reputation and business could suffer.
We expect to retain certain confidential and proprietary customer information in our secure data centers and secure domain name registry, as well as personal data and other confidential and proprietary information relating to our business.
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As a provider of Internet security software and technology, we may be the target of dedicated efforts by hackers and other third parties to overcome or defeat our security measures.
−Removed: Any physical or electronic break-in or other security breach or compromise of the information stored at our secure data centers and domain name registration systems, including any compromise due to human error or employee or contractor malfeasance, may jeopardize the security of information stored on our premises or in the computer systems and networks of our customers.
+Added: Any physical or electronic break-in or other security breach or incident or compromise of the information stored at our secure data centers and domain name registration systems, including any compromise due to human error or employee or contractor malfeasance, may jeopardize the security of information stored on our premises or in the computer systems and networks of our customers.
In such an event, we could face significant liability and current or potential customers could be reluctant to use our services.
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We are evaluating obligations imposed on us by the GDPR and we may be required to incur substantial expense in order to make significant changes to our product and business operations in connection with obtaining and maintaining compliance with the GDPR and similar legislation, such as the UK GDPR and UK Data Protection Act, all of which may adversely affect our revenue and product sales.
−Removed: Additionally, California recently enacted legislation, the California Consumer Privacy Act (the “CCPA”) that, among other things, requires covered companies to provide new disclosures to California consumers, and afford such consumers new abilities to opt-out of certain sales of personal information.
+Added: Additionally, California has enacted legislation, the California Consumer Privacy Act (the “CCPA”) that, among other things, requires covered companies to provide disclosures to California consumers, and afford such consumers abilities to opt-out of certain sales of personal information.
Additionally, a new privacy law, the California Privacy Rights Act (the “CPRA”), was approved by California voters in the November 2020 election.
The CPRA significantly modifies the CCPA, creating obligations relating to consumer data beginning on January 1, 2022, with implementing regulations expected on or before July 1, 2022, and enforcement beginning July 1, 2023.
+Added: Additionally, other U.S.
+Added: states continue to propose, and in certain cases adopt, privacy-focused legislation.
+Added: For example, in March 2021, Virginia enacted the Virginia Consumer Data Protection Act, which becomes effective on January 1, 2023, and in June 2021, Colorado enacted the Colorado Privacy Act, which takes effect July 1, 2023.
We cannot yet fully determine the impact these or future laws, regulations and standards may have on our business, but they may require us to modify our data processing practices and policies and to incur substantial costs and expenses in an effort to comply.
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or foreign taxation of such activities may increase our worldwide effective tax rate and harm our business, results of operations, and financial condition.
−Removed: For example, in December 2017, the legislation commonly referred to as the Tax Cuts and Jobs Act (the “Tax Act”) was enacted, which contained significant changes to U.S.
−Removed: tax law, including, but not limited to, a reduction in the corporate tax rate and a transition to a new territorial system of taxation.
+Added: For example, recently, the Biden administration proposed to increase the U.S.
+Added: corporate income tax rate from 21% to 28%, increase U.S.
+Added: taxation of international business operations and impose a global minimum tax.
+Added: In addition, many countries, including the United States, and organizations, such as the Organization for Economic Cooperation and Development, have recently proposed or recommended changes to existing tax laws or have enacted new laws that could impact our tax obligations in countries where we do business or cause us to change the way we operate our business.
The impact of future changes to U.S.
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In addition, the COVID-19 pandemic may disrupt the operations of our customers, partners, suppliers, and other third-party providers for an indefinite period of time, including as a result of travel restrictions, adverse effects on budget planning processes, and/or business shutdowns, all of which could negatively impact our business, financial condition, and results of operations.
−Removed: More generally, the COVID-19 pandemic could continue to adversely affect economies and financial markets globally, potentially leading to an economic downturn, which could decrease technology spending and adversely affect our business.
+Added: More generally, despite continued actions taken by governments and businesses to attempt to contain and treat the disease, including the distribution and administration of effective vaccines, the COVID-19 pandemic could continue to adversely affect economies and financial markets globally, potentially leading to an economic downturn, which could decrease technology spending and adversely affect our business.
Risks Related to Our Common Stock
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Over the past years, the market price of our common stock has experienced significant fluctuations.
−Removed: Between April 1, 2020, and March 31, 2021, the reported last adjusted closing price on the NYSE American LLC, and now NYSE, for our common stock ranged between $4.29 and $8.17 per share.
+Added: Between July 1, 2020, and June 30, 2021, the reported last adjusted closing price on the NYSE American LLC, and now NYSE, for our common stock ranged between $3.96 and $8.17 per share.
The price of our common stock may continue to be volatile as a result of several factors, some of which are beyond our control.
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In addition, the stock prices of many technology companies have experienced wide fluctuations that have often been unrelated to the operating performance of those companies.
−Removed: These broad market and industry fluctuations, as well as general economic, political and market conditions such as recessions, government shutdowns, global pandemics (such as the COVID-19 pandemic), interest rate changes the stability of the EU and the exit of the United Kingdom or international currency fluctuations, may cause the market price of our common stock to decline.
+Added: These broad market and industry fluctuations, as well as general economic, political and market conditions such as recessions, government shutdowns, global pandemics (such as the COVID-19 pandemic), interest rate changes the stability of the EU(including, but not limited to, effects from the exit of the United Kingdom or international currency fluctuations, may cause the market price of our common stock to decline.
In the past, following periods of volatility in the overall market and the market price of a particular company’s securities, securities class action litigation has often been instituted against these companies.
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The exercise of our outstanding vested stock options, warrants and RSUs would dilute the ownership interests of our existing stockholders.
−Removed: As of March 31, 2021, we had outstanding options, warrants and RSUs to purchase an aggregate of 6,341,844 shares of common stock representing approximately 9% of our total shares outstanding of which 4,674,542 were vested and therefore exercisable.
+Added: As of June 30, 2021, we had outstanding options, warrants and RSUs to purchase an aggregate of 6,752,839 shares of common stock representing approximately 9% of our total shares outstanding of which 4,512,261 were vested and therefore exercisable.
To the extent outstanding stock options are exercised, additional shares of common stock will be issued, existing stockholders’ percentage voting interests will decline and the number of shares eligible for resale in the public market will increase.
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We expect that our future operating results may also fluctuate due to the same or similar factors.
−Removed: While we had net income of $280.4 million for the year ended December 31, 2020, we had net losses of $19.2 million for the year ended December 31, 2019, and $26.4 million for the quarter ended March 31, 2021.
−Removed: As of March 31, 2021, we had accumulated deficits of $34.5 million.
+Added: While we had net income of $280.4 million for the year ended December 31, 2020, we had net losses of $19.2 million for the year ended December 31, 2019, and $30.0 million for the six months ended June 30, 2021.
+Added: As of June 30, 2021, we had accumulated deficits of $38.0 million.
The following include some of the factors that may cause our operating results to fluctuate:
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Because ownership of our common stock is concentrated, investors may have limited influence on stockholder decisions.
−Removed: As of March 31, 2021, our executive officers and directors beneficially owned approximately 14% of our outstanding common stock.
+Added: As of June 30, 2021, our executive officers and directors beneficially owned approximately 14% of our outstanding common stock.
In addition, a group of stockholders that, as of December 31, 2007, held 4,766,666 shares, or approximately 7% of our outstanding common stock, have entered into a voting agreement with us that requires them to vote all of their shares of our voting stock in favor of the director nominees approved by our Board of Directors at each director election going forward, and in a manner that is proportional to the votes cast by all other voting shares as to any other matters submitted to the stockholders for a vote.
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Certification of the President and Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
−Removed: Certification of the Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
+Added: Certification of the Vice President of Finance pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
Certification of the President and Chief Executive Officer pursuant to 18 U.S.C.
Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
−Removed: Certification of the Chief Financial Officer pursuant to 18 U.S.C.
+Added: Certification of the Vice President of Finance pursuant to 18 U.S.C.
Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
7 unchanged sentences
Chief Executive Officer (Principal Executive Officer)
−Removed: /s/ Richard H.
−Removed: Chief Financial Officer (Principal Financial Officer and Principal Accounting Officer)
+Added: /s/ Jon Weaklend
+Added: Vice President of Finance
+Added: (Principal Financial Officer and Principal Accounting Officer)
+Added: August 6, 2021
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.