What changed in this filing

/stocks — the workspaceLOADING

Item 1A. Risk Factors

2021-03-16 compared with 2020-03-20 · 338 added, 241 removed, 479 unchanged (55% of the section changed)

4 unchanged sentences

In that event, the price of our common stock could decline, and you could lose part or all of your investment.

Risk Factor Summary

This risk factor summary contains a high-level summary of risks associated with our business, but does not address all of the risks that we face.

Additional discussion of the risks summarized below, and other risks that we face, may be found immediately following this summary.

Risks Related to Our Business and Industry

• We have a history of losses and may not achieve profitability in the future.

• The effects of the COVID-19 pandemic have had and are expected to continue to have an adverse effect on our business, operations and financial results as well as the business and operations of our customers and potential customers.

• Because we recognize revenue from subscriptions for our platform over the term of the subscription, downturns or upturns in new business may not be immediately reflected in our operating results.

• Our revenue growth rate in recent periods may not be indicative of our future performance.

• We have a limited operating history and our business has evolved, which makes it difficult to predict our future operating results.

• We have experienced rapid growth and significant changes to our organization and structure and may not be able to effectively manage such growth.

• Failure to adequately maintain and scale our sales force will impede our growth.

• We have expanded and intend to continue to expand our international operations, which exposes us to significant risks.

• Our growth depends in part on the success of our strategic relationships with existing and prospective Knowledge Network application providers.

• We do not have a long history with our pricing models and changes could adversely affect our operating results.

• Our success depends on a fragmented internet environment for finding information, particularly information about businesses.

• Our platform faces competition in the marketplace.

If we are unable to compete effectively, our operating results could be adversely affected.

• Business and professional service providers may not widely adopt our platform to manage their information or as an important part of their marketing strategy, which would limit our ability to grow our business.

• If customers do not renew their subscriptions for our platform or if they reduce their subscriptions at the time of renewal, our revenue will decline and our business will suffer.

• If we are unable to attract new customers, our revenue growth could be slower than we expect and our business may be harmed.

• If we fail to integrate our platform with a variety of third-party technologies, our platform may become less marketable and less competitive or obsolete and our operating results would be harmed.

• If we are unable to successfully develop and market new features, make enhancements to our existing features, or expand our offerings into new markets, our business, results of operations and competitive position may suffer.

• If we fail to adapt and respond effectively to rapidly changing technology, evolving industry standards and changing customer needs or requirements, our platform may become less competitive.

• If customers do not expand their use of our platform beyond their current subscriptions and licenses, our ability to grow our business and operating results may be adversely affected.

• Because our platform is sold to enterprises that often have complex operating environments, we may encounter long and unpredictable sales cycles, which could adversely affect our operating results in any given period.

• A portion of our revenue is dependent on a few customers.

• A significant portion of our revenue is dependent on third-party reseller customers, the efforts of which we do not control.

• Adverse economic conditions or reduced technology spending may adversely impact our business.

• We may require additional capital to support our business, and this capital might not be available on acceptable terms, if at all.

Risks Related to Information Technology, Intellectual Property, and Data Security

• A security breach, network attack or information security incident could delay or interrupt service to our customers, result in the unauthorized access to, or use, modification or publishing of customer content or other information, harm our reputation or subject us to significant liability.

• Assertions by third parties of infringement or other violations by us of their intellectual property rights could result in significant costs and harm our business and operating results.

• We could incur substantial costs in protecting or defending our intellectual property rights, and any failure to protect our intellectual property could adversely affect our business, results of operations and financial condition.

• Our platform utilizes open source software, and any failure to comply with the terms of one or more of these open source licenses could negatively affect our business.

• We employ third-party licensed software for use in or with our platform, and the inability to maintain these licenses or errors in the software we license could result in increased costs, or reduced service levels, which could adversely affect our business.

• The reliability of our network and support infrastructure will be critical to our success.

Sustained failures or outages could lead to significant costs and service disruptions, which could negatively affect our business, financial results and reputation.

• Real or perceived errors, failures or bugs in our software, or in the software or systems of our third-party application providers and partners, could materially and adversely affect our operating results and growth prospects.

Risks Related to Laws, Regulation and Taxation

• We are subject to governmental regulation and other legal obligations, including those related to privacy, data protection and information security, and our actual or perceived failure to comply with such obligations could harm our business.

Compliance with such laws could also impair our efforts to maintain and expand our customer base, and thereby decrease our revenue.

Risks Related to Ownership of Our Common Stock and Our Status as a Public Company

• Our quarterly results may fluctuate significantly and may not fully reflect the underlying performance of our business.

• The market price of our common stock has been and may continue to be volatile and may decline.

Market volatility may affect the value of an investment in our common stock and could subject us to litigation.

Risks Related to Our Business and Industry

We have a history of losses and may not achieve profitability in the future.

We generated a net loss of $94.7 million, $121.5 million and $74.8 million for the fiscal years ended January 31, 2021, 2020 and 2019, respectively.

2 unchanged sentences

As a result, we may continue to experience operating losses for the indefinite future.

Further, we expect our operating expenses to increase over the next several years as we hire additional personnel, incur greater lease expense for new and expanded facilities, expand our distribution channels, develop our technology and new features and face increased compliance costs associated with our growth and entry into new markets and geographies and operations as a public company.

Further, we expect our operating expenses to increase over the next several years as we hire additional personnel, incur additional expenses associated with our new and expanded facilities, expand our distribution channels, develop our technology and new features and face increased compliance costs associated with our growth and entry into new markets and geographies and operations as a public company.

If our revenue does not increase to offset these and other potential increases in operating expenses, we may not be profitable in future periods.

If we are unable to achieve and sustain profitability, the market price of our common stock may significantly decrease.

The effects of the COVID-19 pandemic have had and are expected to continue to have an adverse effect on our business, operations and financial results as well as the business and operations of our customers and potential customers.

The COVID-19 pandemic has disrupted business operations for us and our customers, suppliers, vendors and other parties with whom we do business and such disruptions are expected to continue for an indefinite period of time.

In an effort to control the spread of COVID-19, governments and municipalities around the world have instituted restrictive measures, including orders to shelter-in-place, travel restrictions, and mandated business closures.

The pandemic and resulting governmental restrictions and regulations have adversely affected businesses, economies, and financial markets globally, leading to an economic downturn, a sharp increase in unemployment and increased market volatility.

As a result of the COVID-19 pandemic, the operation of our business has been disrupted.

We have temporarily closed our offices requiring all employees globally to work remotely.

We have restricted non-essential business travel and canceled in-person marketing events, including our annual industry and customer event ONWARD20.

While we continue to monitor regional developments relating to the COVID-19 pandemic to inform decisions on office re-openings and lifting of travel restrictions, these efforts may not be successful and may require additional costs.

The uncertain duration of these measures have had and may continue to have increasingly negative effects on our sales efforts and revenue growth rates.

In addition, our management team has, and will likely continue, to spend time, attention and resources monitoring the COVID-19 pandemic and seeking to manage its effects on our business and workforce.

The COVID-19 pandemic has had and we believe will continue to have a negative impact on our sales activities including our ability to attract, retain and sell additional products and features to our customers.

In response to the COVID-19 pandemic some existing and potential customers, in particular among those in industries highly impacted by the pandemic, such as retail and food services as well as certain geographies such as Europe, have and we expect other customers may reduce, suspend or delay technology spending, request to renegotiate contracts to obtain concessions such as extended billing and payment terms, shorten the duration of

contracts or elect not to renew their subscriptions.

If additional customers or potential customers take similar actions, our operating results and financial condition may be materially adversely impacted.

Because our platform is offered as a subscription-based service and we generally recognize revenue from our customer contracts ratably over the term of the contract, changes in our contracting activity in the near term may not be fully reflected in our results of operations and overall financial performance until future periods.

The COVID-19 pandemic and measures taken to control its spread may adversely affect other aspects of our business as described in this “Risk Factors” section.

As a result of the scale of the pandemic and measures taken to control its spread, our financial and operating results have been adversely affected and may differ materially from our historical results, and such adverse results may continue or worsen.

Because we recognize revenue from subscriptions for our platform over the term of the subscription, downturns or upturns in new business may not be immediately reflected in our operating results.

We generally recognize revenue from customers ratably over the terms of their agreements, which are typically one year in length but may be up to three years or longer in length.

As a result, most of the revenue we report in each quarter is the result of subscription agreements entered into during previous quarters.

Consequently, a decline in new or renewed subscriptions in any one quarter may not be reflected in our revenue results for that quarter.

Any such decline, however, will negatively affect our revenue in future quarters.

Accordingly, the effect of significant downturns in sales and market acceptance of our products or a decline in our retention rate, including as a result of the ongoing COVID-19 pandemic, may not be fully apparent or reflected in our results of operations until future periods.

Our subscription model also makes it difficult for us to rapidly increase our revenue through additional sales in any period, as revenue from new customers must be recognized over the applicable subscription term.

Our revenue growth rate in recent periods may not be indicative of our future performance.

We experienced revenue growth rates of 34% from the fiscal year ended January 31, 2018 to the fiscal year ended January 31, 2019, 31% from the fiscal year ended January 31, 2019 to the fiscal year ended January 31, 2020, and 19% from the fiscal year ended January 31, 2020 to the fiscal year ended January 31, 2021.

Our historical revenue growth rates are not indicative of future growth, and we may not achieve similar revenue growth rates in future periods.

You should not rely on our revenue for any prior quarterly or annual periods as an indication of our future revenue or revenue growth.

Our operating results may vary as a result of a number of factors, including our ability to execute on our business strategy, our ability to compete effectively for customers and business partners, the impact of the COVID-19 pandemic on our business, and other factors that are outside of our control.

If we are unable to maintain consistent revenue or revenue growth, our stock price could be volatile, and it could be difficult to achieve or maintain profitability.

We have a limited operating history and our business has evolved, which makes it difficult to predict our future operating results.

1 unchanged sentence

Our business has evolved several times since then.

For example, we sold our advertising business to IAC/InterActiveCorp in 2012 to focus on becoming a platform that puts businesses in control of their facts online with brand-verified answers in search.

For example, we sold our advertising business to IAC/InterActiveCorp in 2012 and over the following years have become a platform that puts businesses in control of their facts online with their official answers in search.

Many of the most popular features of our platform have only been launched in the past few years.

2 unchanged sentences

We have encountered and will encounter risks and uncertainties frequently experienced by growing companies in rapidly changing industries, such as the risks and uncertainties described herein.

In addition, the duration and extent of the impact of the COVID-19 pandemic on our business and industry are uncertain and introduce additional uncertainty to our forecasts of future operating results.

If our assumptions regarding these risks and uncertainties are incorrect or change due to changes in our industry, or if we do not address these risks successfully, our operating and financial results could differ materially from our expectations and our business could suffer.

6 unchanged sentences

Any failure to manage our anticipated growth and organizational changes in a manner that preserves the key aspects of our culture could hurt our chance for future success, including our ability to recruit and retain personnel and effectively focus on and pursue our corporate objectives.

In addition, to manage the expected growth of our headcount, customer-base and operations, we will need to continue to improve our information technology infrastructure and our operational, financial and management systems and procedures.

Furthermore, as a result of the COVID-19 pandemic, our corporate culture may be difficult to maintain as all our global offices are temporarily closed and all employees globally work from home.

In addition, to manage the growth of our headcount, customer-base and operations, we will need to continue to improve our information technology infrastructure and our operational, financial and management systems and procedures.

We have implemented many of these systems and procedures only recently, and they may not work as we expect or at all.

5 unchanged sentences

If we fail to successfully manage our growth, we likely will be unable to successfully execute our business strategy, which could have a negative impact on our business, operating results and financial condition.

Failure to adequately expand our sales force will impede our growth.

Failure to adequately maintain and scale our sales force will impede our growth.

Our revenue growth is substantially reliant on our sales force.

Much of our sales process is relationship-driven, which requires a significant sales force.

While we plan to continue to expand our direct sales force, both domestically and internationally, we have historically had difficulty recruiting and retaining a sufficient number of sales personnel.

While we plan to maintain and scale our direct sales force, both domestically and internationally, we have historically had difficulty recruiting and retaining a sufficient number of sales personnel.

If we are unable to adequately scale our sales force, we will not be able to reach our market potential and execute our business plan.

Identifying and recruiting qualified sales personnel and training them on our products requires significant time, expense and attention.

Our financial results will suffer if our efforts to expand and train our direct sales force do not generate a corresponding increase in revenue.

In particular, if we are unable to hire, develop and retain talented sales personnel or if new direct sales personnel are unable to achieve desired productivity levels in a reasonable period of time, we may not be able to realize the expected benefits of this investment or increase our revenue.

Our financial results will suffer if our efforts to scale and train our direct sales force do not generate a corresponding increase in revenue.

We have hired a significant number of direct sales personnel in recent years.

If new direct sales personnel are unable to achieve desired productivity levels in a reasonable period of time, including as a result of the COVID-19 pandemic or if we are unable to retain and develop talented sales personnel, we may not be able to realize the expected benefits of this investment or increase our revenue.

We have expanded and intend to continue to expand our international operations, which exposes us to significant risks.

In 2014, we opened our first office outside the United States, and we intend to continue to expand our operations abroad.

We also sell our products and services throughout the world and intend to continue to expand our international sales efforts.

Our international expansion has created and will create significant challenges for our management, administrative, operational and financial infrastructure.

25 unchanged sentences

• deterioration of political relations between the United States and other countries;

• natural disasters, pandemics including the ongoing COVID-19 pandemic, acts of terrorism and other events beyond our control;

• political or social unrest or economic instability in a specific country or region in which we operate, which could have an adverse impact on our operations in that location.

18 unchanged sentences

If we are unsuccessful in establishing or maintaining our relationships with third-party application providers, our ability to compete in the marketplace or to grow our revenue could be impaired and our operating results could suffer.

We do not have a long history with our subscription or pricing models and changes could adversely affect our operating results.

We do not have a long history with our pricing models and changes could adversely affect our operating results.

We have limited experience with respect to determining the optimal prices and contract length for our platform.

As the markets for our features grow, as new competitors introduce new products or services that compete with ours or reduce their prices, or as we enter into new international markets, we may be unable to attract new customers or retain existing customers at the same price.

For example, we recently began offering capacity-based pricing for our Pages and Answers products.

There is no assurance that this new pricing and distribution model will be successful thus adversely affecting our financial results.

Furthermore, as the markets for our features grow, as new competitors introduce new products or services that compete with ours or reduce their prices, or as we enter into new international markets, we may be unable to attract new customers or retain existing customers at the same price.

Moreover, large customers, which have historically been the focus of our direct sales efforts, may demand greater price discounts.

6 unchanged sentences

Additionally, we may enter new geographies with less fragmented internet environments.

If most end consumers relied on a few websites or applications for this information, or if reliably

accurate information across the most used websites and applications were generated from a single source, the need to synchronize information about a business and for our platform could decline significantly.

If most end consumers relied on a few websites or applications for this information, or if reliably accurate information across the most used websites and applications were generated from a single source, the need to synchronize information about a business and for our platform could decline significantly.

In particular, if larger providers of internet services were able to consolidate or control key websites and apps from which end consumers seek information about businesses, including regarding physical locations, other entities and attributes, our platform may become less necessary or attractive to our customers, and our revenue would suffer accordingly.

21 unchanged sentences

Concerns about cost, security, reliability and other issues may cause businesses and professional service providers not to adopt our platform.

Moreover, businesses and professional service providers who have already invested substantial resources in other marketing strategies and data management systems or methods may be reluctant to adopt a new approach like ours to supplement or replace existing systems or methods.

Moreover, businesses and professional service providers who have already invested substantial resources in other marketing strategies and data

management systems or methods may be reluctant to adopt a new approach like ours to supplement or replace existing systems or methods.

If businesses and professional service providers do not widely adopt software such as ours, our ability to grow our business will be limited.

Because we recognize revenue from subscriptions for our platform over the term of the subscription, downturns or upturns in new business may not be immediately reflected in our operating results.

We generally recognize revenue from customers ratably over the terms of their agreements, which are typically one year in length but may be up to three years or longer in length.

As a result, most of the revenue we report in each quarter is the result of subscription agreements entered into during previous quarters.

Consequently, a decline in new or renewed subscriptions in any one quarter may not be reflected in our revenue results for that quarter.

Any such decline, however, will negatively affect our revenue in future quarters.

Accordingly, the effect of significant downturns in sales and market acceptance of our products, and potential changes in our attrition rate, may not be fully reflected in our results of operations until future periods.

If customers do not renew their subscriptions for our platform or if they reduce their subscriptions at the time of renewal, our revenue will decline and our business will suffer.

1 unchanged sentence

In the normal course of business, some customers have elected not to renew their subscriptions with us.

Our customers may seek to renew their subscriptions for fewer features, at renegotiated rates, or for shorter contract lengths, all of which could reduce the amount

of the subscription.

Our customers may seek to renew their subscriptions for fewer features, at renegotiated rates, or for shorter contract lengths, all of which could reduce the amount of the subscription.

Our renewal rates may decline or fluctuate as a result of a number of factors, including limited customer resources, changes in our pricing and subscription models, customer satisfaction with our platform, the acquisition of our customers by other companies and deteriorating general economic conditions.

For example, as a result of the COVID-19 pandemic certain customers have reduced their subscriptions, elected not to renew their subscriptions, reduced length of contracts, requested extended billing and payment terms or sought more favorable rates.

If our customers do not renew their subscriptions for our platform or decrease the amounts they spend with us, our revenue will decline and our business will suffer.

4 unchanged sentences

As a result, we may be unable to attract new customers at rates or on terms that would be favorable or comparable to prior periods, which could negatively affect the growth of our revenue.

Furthermore, we have canceled in-person customer and industry events including ONWARD, our annual industry and customer event, as a result of the COVID-19 pandemic.

We have also allocated marketing resources to focus on virtual events, virtual lead generation, and tools to help our sales personnel connect virtually with customers and potential customers.

These new marketing efforts may not be successful and may not attract as many new customers as our historical customer and industry events, which could harm our future revenue and revenue growth.

If we fail to integrate our platform with a variety of third-party technologies, our platform may become less marketable and less competitive or obsolete and our operating results would be harmed.

6 unchanged sentences

The software industry is subject to rapid technological change and evolving standards and practices, as well as changing customer needs, requirements and preferences.

Our ability to attract new customers and increase revenue from existing customers depends, in part, on our ability to enhance and improve our existing features, increase adoption and usage of our platform and introduce new features.

We expend significant resources on research and development to enhance our platform and to incorporate additional features, improve functionality or add other enhancements in order to meet our customers' rapidly evolving demands.

38 unchanged sentences

A delay in or failure to complete sales could harm our business and financial results, and could cause our financial results to vary from period to period.

Our sales cycle varies widely, reflecting differences in potential customers' decision-making processes, procurement requirements and budget cycles, and is subject to significant risks over which we have little or no control, including:

Our sales cycle varies widely, reflecting differences in potential customers' decision-making

processes, procurement requirements and budget cycles, and is subject to significant risks over which we have little or no control, including:

• customers' budgetary constraints and priorities;

4 unchanged sentences

In the large enterprise market, the customer’s decision to use our platform may be an enterprise-wide decision or may require the approval of senior management, which may not only lengthen the sales cycle but also reduce the likelihood of completing a sale.

Longer sales cycles could cause our operating results and financial condition to suffer in a given period.

The COVID-19 pandemic has disrupted the operations of our customers making sales cycles more complex.

Delayed and more complex sales cycles could cause our operating results and financial condition to suffer in a given period.

If we cannot adequately scale our direct sales force, we will experience further delays in signing new customers, which could slow our revenue growth.

2 unchanged sentences

We anticipate that sales of our platform to a relatively small number of customers will continue to account for a significant portion of our revenue in future periods.

If we were to lose any of our significant customers,

our revenue could decline and our business and results of operations could be materially and adversely affected.

If we were to lose any of our significant customers, our revenue could decline and our business and results of operations could be materially and adversely affected.

These negative effects could be exacerbated by customer consolidation, changes in technologies or solutions used by customers, changes in demand for our features, selection of suppliers other than us, customer bankruptcies or customer departures from their respective industries, pricing competition or deviation from marketing and sales methods away from physical location retailing, any one of which may result in even fewer customers accounting for a high percentage of our revenue and reduced demand from any single significant customer.

3 unchanged sentences

In transactions with third-party reseller customers, we are only party to the transaction with the reseller and are not a party to the reseller's transaction with its customer, and we do not control the efforts of these resellers.

They may elect not to renew their subscriptions with us or may elect to purchase significantly fewer licenses, which would materially adversely affect our operating results and financial condition.

In addition, if such third-party reseller customers merge or consolidate with other businesses, declare bankruptcy or depart from their respective industries, our business could be harmed.

Such resellers may elect not to renew their subscriptions with us or may elect to purchase significantly fewer licenses, which would materially adversely affect our operating results and financial condition.

In addition, our third-party reseller customers, which often sell to small and midsized organizations that can have liquidity and expense limitations, are also susceptible to global economic weakness and uncertainty, including as a result of the COVID-19 pandemic.

See also "—If customers do not renew their subscriptions for our platform or if they reduce their subscriptions at the time of renewal, our revenue will decline and our business will suffer." Lower demand from certain of our reseller customers has and may continue to result in them not renewing their subscriptions with us, purchasing fewer licenses, attempting to renegotiate contracts to obtain concessions and requesting extended billing and payment terms.

Such an adverse effect on our financial condition and operating results would not be fully reflected in our results of operations until future periods.

In addition, if third-party reseller customers merge or consolidate with other businesses, declare bankruptcy or depart from their respective industries, our business could be harmed.

For example, consolidation among our third-party reseller customers may require us to renegotiate agreements on less favorable terms, including longer payment periods, or may lead to a termination of our agreements with these resellers.

3 unchanged sentences

If we are unable to maintain or replace our contractual relationships with our existing reseller customers, efficiently manage our relationships with them or establish new contractual relationships with other third parties, we may fail to retain customers or acquire potential new customers and may experience delays and increased costs in adding or replacing customers that were lost, any of which could materially adversely affect our business, operating results and financial condition.

Our revenue growth rate in recent periods may not be indicative of our future performance.

We experienced revenue growth rates of 37% from the fiscal year ended January 31, 2017 to the fiscal year ended January 31, 2018, 34% from the fiscal year ended January 31, 2018 to the fiscal year ended January 31, 2019, and 31% from the fiscal year ended January 31, 2019 to the fiscal year ended January 31, 2020.

Our historical revenue growth rates are not indicative of future growth, and we may not achieve similar revenue growth rates in future periods.

You should not rely on our revenue for any prior quarterly or annual periods as an indication of our future revenue or revenue growth.

Our operating results may vary as a result of a number of factors, including our ability to execute on our business strategy and compete effectively for customers and business partners and other factors that are outside of our control.

If we are unable to maintain consistent revenue or revenue growth, our stock price could be volatile, and it could be difficult to achieve or maintain profitability.

A security breach, network attack or information security incident could delay or interrupt service to our customers, result in the unauthorized access to, or use, modification or publishing of customer content or other information, harm our reputation or subject us to significant liability.

We are vulnerable to computer viruses, break-ins, phishing attacks, attempts to overload our servers with denial-of-service or other attacks and similar disruptions from unauthorized use of our computer systems.

Any such attack, or any information security incident from any other source affecting us or our services providers, including through employee error or misconduct, could lead to interruptions, delays, website or application shutdowns, loss of data or unauthorized access to, or use or acquisition of, personal information, confidential information or other data that we or our services providers process or maintain.

For example, in December 2015, we suffered a denial-of-service attack, which resulted in the inability for some of our customers to access our platform for several hours.

If we experience additional compromises to our security that result in performance or availability problems, the complete shutdown of our platform or the loss of, or unauthorized access to, personal information or other types of confidential information, our customers or application providers may assert claims against us for credits, refunds or other damages, and may lose trust and confidence in our platform.

Additionally, security breaches or other unauthorized access to, or use or acquisition of, personal information or other types of confidential information that we or our services providers maintain, could result in claims against us for identity theft or other similar fraud claims, breach of contract or indemnity, governmental enforcement actions, litigation, fines and penalties or adverse publicity, and could cause our customers and partners to lose trust in us, any of which could have an adverse effect on our business, reputation, operating results and financial condition.

Our existing insurance coverage may not continue to be available on acceptable terms or may not be available in sufficient amounts to cover one or more large claims related to a security breach.

An insurer may also deny coverage as to a 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 could have a material adverse effect on our business.

We could also be required to incur significant costs for remediation or expend significant capital and other resources to address a security breach.

While the audit committee of the Board of Directors oversees our policies and practices regarding information technology risk management and the internal controls related to cybersecurity, because the techniques used to obtain unauthorized access, disable or degrade service or sabotage systems change frequently, often are not recognized until launched

against a target and may originate from less regulated countries, we may be unable to proactively address these techniques or to implement adequate preventative measures.

In addition, customers' and application providers' accounts and listing pages hosted on our platform could be accessed by unauthorized persons for the purpose of placing illegal, abusive or otherwise unauthorized content on their respective websites and applications.

If an unauthorized person obtained access to a customer's account or our platform, such person could update the customer's business information with abusive content or create and disseminate false responses to reviews.

This type of unauthorized activity could negatively affect our ability to attract new customers and application providers, deter current customers and application providers from using our platform, subject us to third-party lawsuits, regulatory fines, indemnification requests or additional liability under customer contracts, or other action or liability, any of which could materially harm our business, operating results and financial condition.

We previously identified and continue to identify material weaknesses in our internal control over financial reporting.

2 unchanged sentences

Section 404 of the Sarbanes-Oxley Act of 2002, or Section 404, requires that we evaluate and determine the effectiveness of our internal control over financial reporting and provide a management report on internal control over financial reporting.

Under standards established by the United States Public Company Accounting Oversight Board, a material weakness is a deficiency, or combination of deficiencies, in internal control over financial reporting such that there is a reasonable possibility that a material misstatement of annual or interim financial statements will not be prevented or detected and corrected on a timely basis.

Under standards established by the

United States Public Company Accounting Oversight Board, a material weakness is a deficiency, or combination of deficiencies, in internal control over financial reporting such that there is a reasonable possibility that a material misstatement of annual or interim financial statements will not be prevented or detected and corrected on a timely basis.

In connection with the audit of the fiscal year 2019 consolidated financial statements, we and our independent registered public accounting firm identified a material weakness in information technology general controls ("IT General Controls").

The deficiencies in IT General Controls also resulted in a conclusion that manual controls that rely on data produced by and maintained within these affected information technology systems and automated controls within these affected information technology systems across several of our significant classes of transactions were ineffective.

Based on the nature of these deficiencies in IT general controls, management concluded that the two material weaknesses from fiscal years prior to 2019 related to the revenue recognition process and financial close continued to exist as of January 31, 2019.

As of January 31, 2020, management has determined that these previously identified material weaknesses had been remediated.

Notwithstanding, as of January 31, 2020, management has identified a material weakness in our internal control over financial reporting associated with processes to calculate, record and account for sales commissions.

The identified deficiencies include controls related to reliance on certain outsourced IT service providers used in the processes to calculate, record and account for sales commissions and the related business process controls that rely upon information that was subject to the outsourced IT service providers’ control environment.

Management has determined that the aggregate impact of these ineffective controls resulted in a material weakness.

Based on the nature of these deficiencies in IT General Controls, we concluded that the two material weaknesses from fiscal years prior to 2019 related to the revenue recognition process and financial close continued to exist as of January 31, 2019.

As of January 31, 2020, we determined that these previously identified material weaknesses had been remediated.

Notwithstanding, as of January 31, 2020, we identified a material weakness in our internal control over financial reporting associated with processes to calculate, record and account for sales commissions.

While we took steps toward remediating this material weakness in fiscal year 2021, the material weakness related to the sales commission process continued to exist as of January 31, 2021.

We are taking steps to remediate this material weakness.

10 unchanged sentences

We have in the past acquired and may in the future seek to acquire or invest in businesses, features or technologies that we believe could complement or expand our platform, enhance our technical capabilities or otherwise offer growth opportunities.

The pursuit of

potential acquisitions may divert the attention of management and cause us to incur various expenses in identifying, investigating and pursuing suitable acquisitions, whether or not they are consummated.

The pursuit of potential acquisitions may divert the attention of management and cause us to incur various expenses in identifying, investigating and pursuing suitable acquisitions, whether or not they are consummated.

Although we have previously acquired businesses, we have limited acquisition experience.

16 unchanged sentences

If an acquired business fails to meet our expectations, our business, operating results and financial condition may suffer.

Natural disasters and other events beyond our control could adversely affect us.

Natural disasters or other catastrophic events may cause damage or disruption to our operations and the global economy, and thus could have a strong negative effect on us.

Our business operations are subject to interruption by natural disasters, fire, power shortages, civil unrest, pandemics, acts of terrorism and other events beyond our control.

While we maintain crisis management and disaster response plans, natural disasters and other events could also make it difficult or impossible for us to continue operations, and could decrease demand for our platform.

For example, as a result of the COVID-19 pandemic the operation of our business has been disrupted.

We have temporarily closed our offices requiring all of our employees globally to work remotely.

Our corporate headquarters is located in New York City, an area that was and continues to be significantly affected by the COVID-19 pandemic.

We have restricted non-essential business travel and canceled in-person marketing events, including our annual industry and customer event ONWARD.

The duration of the business disruption and related financial impact cannot be reasonably estimated at this time.

However, a prolonged disruption to our operations may have a material adverse effect on our business reducing operational efficiency and increasing operational costs.

In addition, our data centers are located in New Jersey and Texas and our cloud computing providers operate from facilities in northern Virginia, Frankfurt, Germany and Tokyo, Japan, making our business particularly susceptible to natural disasters and other catastrophic events in those areas.

Any natural disaster or other event affecting our data centers could have an adverse effect on our financial condition and operating results.

We depend on our senior management team and the loss of our chief executive officer, president or one or more key employees could adversely affect our business.

Our success depends largely upon the continued services of our key executive officers.

In particular, two of our co-founders, Howard Lerman and Brian Distelburger, who serve as our Chief Executive Officer and President, respectively, are critical to our vision, strategic direction, feature innovation, culture and overall business success.

We also rely on our leadership team in the areas of research and development, marketing, sales, services and general and administrative functions.

From time to time, there may be changes in our executive management team resulting from the hiring or departure of executives, which could disrupt our business.

For example during the fiscal year ended January 31, 2021, we announced changes to the leadership team for our sales and research and development functions, and the departure of these key executives may disrupt strategic initiatives of these functions.

We do not have employment agreements with our executive officers or other key personnel that require them to continue to work for us for any specified period and, therefore, they could terminate their employment with us at any time.

The loss of one or more of our executive officers or key employees could have a serious adverse effect on our business.

The failure to attract and retain additional qualified personnel could prevent us from executing our business strategy.

To execute our business strategy, we must attract and retain highly qualified personnel.

In particular, we compete with many other companies for software developers with high levels of experience in designing, developing and managing cloud-based software, as well as for skilled information technology, sales, marketing, legal and accounting professionals, and we may not be successful in attracting and retaining the professionals we need.

In the future, we may experience difficulty in hiring and difficulty in retaining highly skilled employees with appropriate qualifications.

We face intense competition for qualified individuals from numerous software and other technology companies.

Competition for qualified personnel is particularly intense in the New York area.

We may incur significant costs to attract and retain qualified personnel, and we may lose new employees to our competitors or other technology companies before we capitalize the benefit of our investment in recruiting and training them.

We also employ a number of foreign nationals on work visas, primarily under the H-1B visa.

Current and future restrictions on the availability of visas or delays in the issuance of visas could impair our ability to employ skilled professionals, which could have an adverse effect on our business.

In addition, in making employment decisions, particularly in the software industry, job candidates often consider the value of the stock options or other equity incentives they are to receive in connection with their employment.

If the price of our stock declines, or experiences significant volatility, our ability to attract or retain key employees will be adversely affected.

Also, as employee options vest, we may have difficulty retaining key employees or may be required to grant larger equity awards from our equity plans, which would cause dilution.

If we fail to attract new personnel or fail to retain and motivate our current personnel, our growth prospects could be severely harmed.

If we fail to provide high-quality customer support and professional services, our business and reputation may suffer.

High-quality customer support and professional services are important for the successful retention of existing customers.

Providing support and services, including education, training, data cleansing and processing, ongoing support as well as custom development services, requires that our personnel have specific knowledge and expertise of our platform, making it more difficult for us to hire qualified personnel and to scale up these operations.

The importance of high-quality customer support and professional services and the difficulty of hiring qualified personnel will increase as we expand our business and pursue new customers and as our platform becomes more complex with the development more features and capabilities.

If we do not provide effective and timely ongoing customer support and professional services, our ability to sell additional features to, or to retain, existing customers may suffer, and our reputation with existing or potential customers may be harmed.

In addition, certain aspects of our customer support, for example data cleansing, are conducted manually and are subject to error.

While there are processes designed to verify the accuracy of data, if information is not updated or matched correctly, our reputation may be harmed and we may be subject to liability.

If we fail to continue to develop our brand, our business may suffer.

We believe that continuing to develop and maintain awareness of our brand is critical to achieving widespread acceptance of our platform and is an important element in attracting and retaining customers.

Efforts to build our brand may involve significant expense and may not generate customer awareness or increase revenue at all, or in an amount sufficient to offset expenses we incur in building our brand.

In addition, we sell our features to companies in a number of industries, including healthcare, retail and financial services.

If we are not successful in building our brand, we may become identified with a single industry, which could make it more difficult for us to penetrate other industries.

Promotion and enhancement of our brand will depend largely on our success in being able to provide high quality, reliable and cost-effective features.

If customers do not perceive our platform as meeting their needs, or if we fail to market our platform effectively, we will likely be unsuccessful in creating the brand awareness that is critical for broad customer adoption of our platform.

Adverse economic conditions or reduced technology spending may adversely impact our business.

Our business depends on the overall demand for technology and on the economic performance of our current and prospective customers.

In general, worldwide economic conditions may remain unstable, and these conditions would make it difficult for our customers, prospective customers and us to forecast and plan future business activities accurately, and they could cause our customers or prospective customers to reevaluate their decision to purchase our features.

Weak global economic conditions, or a reduction in technology spending even if economic conditions stabilize, could adversely impact our business and results of operations in a number of ways, including longer sales cycles, lower prices for our platform, fewer subscriptions and lower or no growth.

For example, the COVID-19 pandemic and resulting governmental restrictions and regulations have created additional uncertainty in the global economy and a sharp increase in unemployment.

The prolonged uncertainty and weak economic conditions relating to the COVID-19 pandemic has led certain of our customers and potential customers to decrease the rate of their information technology spending, has adversely affected their ability or willingness to purchase our platform and has caused them to delay purchasing decisions or reduce the value or duration of their subscriptions, all of which adversely affected our operating results.

In addition, the economies of countries in Europe have been experiencing weakness associated with high sovereign debt levels, weakness in the banking sector and uncertainty over the future of the European Union, including uncertainty regarding Brexit.

We have operations, as well as current and potential new customers, throughout Europe.

The European Union's economy also suffered a sharp downturn due to the COVID-19 pandemic, and economic conditions in Europe and other key markets for our platform remain weak.

As a result, we have experienced negative impacts on our sales activities in Europe.

If such conditions deteriorate further, customers may delay or reduce their information technology spending.

In addition, the legal, regulatory and economic impacts of the United Kingdom’s exit from the European Union in January 2020 are not fully known at this time.

While the United Kingdom and the European Union have signed a EU-UK Trade and Cooperation Agreement, there are still many uncertainties and regulations applicable during the transition period will likely be amended and may diverge from European Union regulations.

The outcome of these events may, among other things, increase the costs and complexity of our operations in Europe including our ability to hire and retain employees.

Our reported financial results may be adversely affected by changes in accounting principles generally accepted in the United States.

Generally accepted accounting principles in the United States, or U.S.

GAAP, are subject to interpretation by the Financial Accounting Standards Board, or FASB, the SEC, and various bodies formed to promulgate and interpret appropriate accounting principles.

A change in these principles or interpretations could have a significant effect on our reported financial results and could affect the reporting of transactions completed before the announcement of a change.

Our estimates of market opportunity, market size and forecasts of market growth may prove to be inaccurate, and even if the market in which we compete achieves our forecasted growth, our business could fail to grow at similar rates, if at all.

Market opportunity and size estimates and growth forecasts are subject to significant uncertainty and are based on assumptions and estimates that may not prove to be accurate.

We had historically analyzed the size of our estimated total addressable market, solely with respect to locations, using data published by third parties as well as internally generated data and assumptions regarding our ability to generate revenue from those locations.

We have not independently verified the estimate of locations published by third parties and cannot assure you of its accuracy or completeness.

In addition, our estimated market size for location-related data was based on an assumed annual revenue per location.

As we continue to develop new features, the methodology and assumptions used to estimate new market opportunities may differ materially from methodologies and assumptions previously used to estimate total addressable market with respect to locations.

With the addition of new products and features including our search product, we are targeting and positioning our platform towards new markets.

To estimate the size of these new markets and their growth rates, we have relied on historical estimates and forecasts provided by industry publications and other third-party sources, including Gartner.

We have not independently verified these estimates published by third parties and cannot assure you of their accuracy or completeness.

The target markets in which we operate are also subject to a high degree of uncertainty and risk.

Our customers as well as analysts, market participants, and others may disagree with our assessment of our target markets and we may never successfully compete in these markets.

In addition, third parties may have different assessments of the size of the markets in which in our products compete.

These estimates of total addressable market and growth forecasts are subject to significant uncertainty, are based on assumptions and estimates that may not prove to be accurate.

In addition, as a result of the COVID-19 pandemic, our total addressable market may be more difficult to estimate and subject to greater uncertainty as the assumptions and forecasts on which we and third-parties have based estimates may not reflect future trends.

Even if the market in which we compete meets the size estimates and growth we forecast, our business could fail to grow at similar rates, if at all.

Our management team has limited experience managing a public company.

Our chief executive officer has limited experience managing a public company, interacting with public company investors and complying with the increasingly complex laws pertaining to public companies.

While our chief financial officer and certain other executives have such experience, our management team, as a whole, may not successfully or efficiently manage the ongoing transition to being a public company subject to significant regulatory oversight and reporting obligations under the federal securities laws and the continuous scrutiny of securities analysts and investors.

These new obligations and constituents will require significant attention from our senior management, particularly from our chief executive officer, and could divert their attention away from the day-to-day management of our business, which could adversely affect our business, operating results and financial condition.

We are exposed to fluctuations in currency exchange rates.

We face exposure to movements in currency exchange rates, which may cause our revenue and operating results to differ materially from expectations.

Our operating results could be negatively affected depending on the amount of expense and intercompany transactions including loans denominated in foreign currencies.

As exchange rates vary, revenue, cost of revenue, operating expenses and other operating results, when re-measured, may differ materially from expectations.

For example, a significant portion of our international revenue is derived from Europe including the United Kingdom.

Our revenues and cash flows from these regions may be adversely affected as a result of weakness in the Euro or British Pound.

In addition, our operating results are subject to fluctuation if our mix of U.S.

and foreign currency denominated transactions and expenses changes in the future.

Although in the future we may apply certain strategies to mitigate foreign currency risk, these strategies might not eliminate our exposure to foreign exchange rate fluctuations and would involve costs and risks of their own, such as ongoing management time and expertise, external costs to implement the strategies and potential accounting implications.

Additionally, as we anticipate growing our business further outside of the United States, the effects of movements in currency exchange rates will increase as our transaction volume outside of the United States increases.

Our new credit facility contains restrictive covenants that may limit our operating flexibility.

On March 11, 2020, we replaced our existing revolving credit facility by entering into a new credit facility.

Our new credit facility contains restrictive covenants that limit our ability to transfer or dispose of assets, merge with other companies or consummate certain changes of control, acquire other companies, pay dividends, incur additional indebtedness and liens and enter into new businesses.

We therefore may not be able to engage in any of the foregoing transactions unless we obtain the consent of the lender or terminate the new credit facility, which may limit our operating flexibility.

In addition, our new credit facility is secured by all of our assets and requires us to satisfy certain financial covenants.

There is no guarantee that we will be able to generate sufficient cash flow or sales to meet these financial covenants or pay the principal and interest on any such debt.

Furthermore, there is no guarantee that future working capital, borrowings or equity financing will be available to repay or refinance any such debt.

Any inability to make scheduled payments or meet the financial covenants on our new credit facility would adversely affect our business.

Loans under our new credit facility bear interest, at our option, at an annual rate based on LIBOR (or any such successor benchmark rate) or a base rate.

It is unclear whether LIBOR will continue to exist after 2021 and it is not possible to predict the effect

of any changes to LIBOR, any phase out of LIBOR or any establishment of any successor benchmark rates on our new credit facility or our business generally.

As a result, our interest costs could increase and our access to capital could change, which could adversely affect our results of operations and cash flows.

We may require additional capital to support our business, and this capital might not be available on acceptable terms, if at all.

We intend to continue to make investments to support our business and may require additional funds.

In particular, we may seek additional funds to develop new features and enhance our existing features, expand our operations, including our sales and marketing organizations and our presence outside of the United States, expand office space including into new facilities, improve our infrastructure or acquire complementary businesses, technologies, services, features and other assets.

Accordingly, we may need to engage in equity or debt financings to secure additional funds.

If we raise additional funds through future issuances of equity or convertible debt securities, our stockholders could suffer significant dilution, and any new equity securities we issue could have rights, preferences and privileges superior to those of holders of our common stock.

Any debt financing that we may secure in the future could involve restrictive covenants relating to our capital raising activities and other financial and operational matters, which may make it more difficult for us to obtain additional capital and to pursue business opportunities.

We may not be able to obtain additional financing on terms favorable to us, if at all.

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 feature enhancements and respond to business challenges could be significantly impaired, and our business, operating results and financial condition may be adversely affected.

Risks Related to Information Technology, Intellectual Property, and Data Security

Any such attack, or any information security incident from any other source affecting us or our services providers, including through employee error or misconduct or additional vulnerabilities introduced by remote work arrangements, could lead to interruptions, delays, website or application shutdowns, loss of data or unauthorized access to, or use or acquisition of, personal information, confidential information or other data that we or our services providers process or maintain.

For example, in December 2015, we suffered a denial-of-service attack, which resulted in the inability for some of our customers to access our platform for several hours.

Our existing insurance coverage may not continue to be available on acceptable terms or may not be available in sufficient amounts to cover one or more large claims related to a security breach.

An insurer may also deny coverage as to a future claim.

We could also be required to incur significant costs for remediation or expend significant capital and other resources to address a security breach.

The techniques used to obtain unauthorized access, disable or degrade service or sabotage systems change frequently, often are not recognized until launched against a target and may originate from less regulated countries, we may be unable to proactively address these techniques or to implement adequate preventative measures.

Assertions by third parties of infringement or other violations by us of their intellectual property rights could result in significant costs and harm our business and operating results.

12 unchanged sentences

We intend to continue to file and prosecute patent applications when appropriate to attempt to protect our rights in our proprietary technologies.

competitive advantages, or that such patents will not be challenged by third parties or found by a judicial authority to be invalid or unenforceable.

However, there can be no assurance that our patent applications will be approved, that any patents issued will adequately protect our intellectual property, that the scope of the claims in our issued patents will be sufficient or have the coverage originally sought, that our issued patents will provide us with any competitive advantages, or that such patents will not be challenged by third parties or found by a judicial authority to be invalid or unenforceable.

We could be required to spend significant resources to monitor and protect our intellectual property rights.

18 unchanged sentences

Proceedings to enforce our patent rights in foreign jurisdictions could result in substantial costs and divert our efforts and attention from other aspects of our business.

Accordingly, our efforts to protect our intellectual property rights in such countries may be inadequate.

Accordingly, our efforts to protect our intellectual property rights in such countries may be

In addition, changes in the law and legal decisions by courts in the United States and foreign countries may affect our ability to obtain adequate protection for our technology and the enforcement of intellectual property.

9 unchanged sentences

We employ third-party licensed software for use in or with our platform, and the inability to maintain these licenses or errors in the software we license could result in increased costs, or reduced service levels, which could adversely affect our business.

Our platform incorporates certain third-party software obtained under licenses from other companies.

Our platform incorporates certain third-party software obtained under licenses from other companies, including companies that sell products that compete with our platform.

We anticipate that we will continue to rely on such third-party software and development tools in the future.

There is no assurance that we will be able to renew licenses for third-party software that we use.

Although we believe that there are commercially reasonable alternatives to the third-party software we currently license, this may not always be the case, or the software we currently license may be difficult or costly to replace.

In addition, integration of the software used in our platform with new third-party software

may require significant work and require substantial investment of our time and resources.

In addition, integration of the software used in our platform with new third-party software may require significant work and require substantial investment of our time and resources.

Also, to the extent that our platform depends upon the successful operation of third-party software in conjunction with our software, any undetected errors or defects in this third-party software could prevent the deployment or impair the functionality of our platform, delay new feature introductions, result in a failure of our platform and injure our reputation.

Our use of additional or alternative third-party software would require us to enter into license agreements with third parties.

The reliability of our network and support infrastructure will be critical to our success.

Sustained failures or outages could lead to significant costs and service disruptions, which could negatively affect our business, financial results and reputation.

Our reputation and ability to attract, retain, and serve our customers and application providers are dependent upon the reliable performance of our platform and our underlying technical and network infrastructure.

Our customers access our platform through our website and related technologies.

We rely on internal systems and third-party service providers, including data center, cloud computing, bandwidth and telecommunications equipment providers, to maintain the availability of our platform.

If any service provider fails to provide sufficient capacity to support our platform, experiences service outages, reduces or suspends service due to a natural disaster or pandemic such as the COVID-19 pandemic, or otherwise ceases to do business, such failure could interrupt our customers' access to our services.

For example, we currently serve our customers from third-party data center hosting facilities and cloud computing providers located in the United States, Germany and Japan.

Our primary data center is in New Jersey, and our backup data center is in Texas.

If these data centers or cloud computing services become unavailable to us without sufficient advance notice, if we are unable to renew our agreements with these providers or if a provider is acquired or ceases business, we would likely experience delays in delivering our platform until we could migrate to an alternate provider.

Our disaster recovery program contemplates transitioning our platform to our backup center in the event of a catastrophe and our platform may be unavailable, in whole or in part, during any transition procedure.

We have experienced, and will in the future experience, interruptions, outages and other performance problems.

Such disruptions may be due to a variety of factors, including infrastructure changes, human or software errors, capacity constraints due to an overwhelming number of customers and partners accessing our platform simultaneously and inadequate design.

In some instances, we may not be able to identify the cause or causes of these performance problems within an acceptable period of time.

If we do not accurately predict our infrastructure requirements, our existing customers may experience performance degradation or service outages, which may subject us to financial penalties, financial liabilities and customer losses.

For example, to support the international growth of our business, we have expanded and may need to continue to expand capacity outside the United States, but we may not be able to address future capacity constraints, either through existing or alternative providers, in a cost-effective and timely manner, if at all.

When we add capacity, we may move or transfer our data and our customers’ data.

Despite precautions taken during this process, any unsuccessful data transfers may impair the delivery of our services, which may damage our business.

Real or perceived errors, failures or bugs in our software, or in the software or systems of our third-party application providers and partners, could materially and adversely affect our operating results and growth prospects.

Our features are highly technical and complex.

Our software has previously contained, and may now or in the future contain, undetected errors, bugs, or vulnerabilities.

Some errors in our software may only be discovered after the software has been deployed.

Any errors, bugs, or vulnerabilities discovered in our software after it has been deployed could result in damage to our reputation, loss of customers, partners or application providers, loss of revenue or liability for damages.

In addition, the proper functioning of our platform is dependent on the ability of our Knowledge Network application providers and partners to maintain the availability and proper functioning of their software integrations with our systems and also is dependent on the ability of our third-party application providers to maintain the availability and proper functioning of their websites and applications on which business listing information is published for customers.

For example, a number of our Knowledge Network application providers provide us with an Application Program Interface, or API, on which our ability to interface with that provider is based.

Furthermore, in a rapidly changing business environment, for example in connection with the COVID-19 pandemic, our Knowledge Network application providers may experience limitations and delays, which could limit the functionality of our platform.

If the functionality of the software, APIs or websites of our third-party application providers is impaired, our customers may attribute such limitations to us and our platform thus damaging our reputation and customer relationships.

If our Knowledge Network application providers do not maintain the availability and proper functioning of their software, APIs, websites and applications, our business, operating results and financial condition could be materially affected.

Risks Related to Laws, Regulation and Taxation

We are subject to general litigation that may materially adversely affect us.

13 unchanged sentences

federal and various state governments have adopted or proposed limitations on the collection, distribution, use, storage and security of data relating to individuals, including the use of contact information and other data for marketing, advertising and other communications with individuals and businesses.

For example, the California Consumer Privacy Act of 2018, or CCPA, became effective on January 1, 2020.

For example, the California Consumer Privacy Act of 2018, or CCPA, became effective January 1, 2020.

The CCPA requires covered businesses to, among other things, make new disclosures to consumers about their data collection, use, and sharing practices, and allows consumers to opt out of certain data sharing with third parties.

The CCPA also provides a new private cause of action for certain data breaches.

The California Privacy Rights Act, or CPRA, which will become effective on January 1, 2023, will significantly modify the CCPA, and also create a new state agency that will be vested with authority to implement and enforce the CCPA and the CPRA.

The effects of the CCPA and the CPRA are potentially significant and may require us to incur substantial costs and expenses in an effort to comply and increase our potential exposure to regulatory enforcement and/or litigation.

Additionally, the FTC and many state attorneys general are interpreting federal and state consumer protection laws as imposing standards for the online collection, use, dissemination and security of data.

2 unchanged sentences

Within the European Union, legislators have adopted the General Data Protection Regulation, or GDPR, which became effective in May 2018.

The GDPR includes more stringent operational requirements for processors and controllers of personal data than previous EU data protection laws and imposes significant penalties for non-compliance.

The GDPR includes more stringent operational requirements for processors and controllers of personal data than previous EU data protection laws and imposes significant penalties for non-

The United Kingdom has implemented a Data Protection Act that substantially implements the GDPR.

3 unchanged sentences

Privacy Shield frameworks with respect to our transfer of certain personal data from the European Union and Switzerland to the United States.

however, these programs, and any other mechanisms that we use or may use in the future in an effort to legitimize cross-border data transfers may be challenged or invalidated or may evolve such that they do not function as appropriate means for us to transfer certain personal data from the European Union and Switzerland to the United States.

In July 2020, the European Court of Justice invalidated the EU-U.S.

Privacy Shield framework, but concluded that the Standard Contractual Clauses issued by the European Commission for the transfer of personal data are valid.

The invalidation of the EU-U.S.

Privacy Shield and related uncertainty regarding other data transfer mechanisms could have a significant adverse impact on our ability to process and transfer personal data outside of the European Union, while increasing our compliance costs and legal and regulatory risks.

Customers and potential customers may view alternative data transfer mechanisms as being too costly, burdensome or uncertain and therefore impairing our ability to attract and retain customers.

In addition, other mechanisms that we use or may use in the future in an effort to legitimize cross-border data transfers may be challenged or invalidated or may evolve such that they do not function as appropriate means for us to transfer certain personal data from the European Union and Switzerland to the United States.

These domestic and foreign laws and regulations relating to privacy and data security are evolving, can be subject to significant change and may result in ever-increasing regulatory and public scrutiny and escalating levels of enforcement and sanctions.

10 unchanged sentences

If we were found to have violated such rules and regulations, we may face enforcement actions by the FTC or FCC or face civil penalties, either of which could adversely affect our business.

As our products are applied to new uses and in new verticals, we may become subject to additional regulations or legal risks.

For example, we have begun selling our platform to government entities.

Risks associated with sales to government entities include adherence to complex procurement regulations and other government-specific contractual requirements.

We may be subject to audits and investigations relating to our government contracts and any violations could result in various civil and criminal penalties and administrative sanctions, including termination of contracts, payment of fines, and suspension or debarment from future government business, as well as harm to our reputation and financial results.

Sales to government entities can be highly competitive, expensive and time consuming, often requiring significant upfront time and expense without any assurance that we will successfully complete a sale.

Our platform has been and increasingly may be used to store confidential or sensitive information, which exposes us to additional risks.

For example, in order to offer our products to certain customers in the health care industry we have implemented certain security and privacy measures and related procedures to comply with the Health Insurance Portability and Accountability Act of 1996, or HIPAA, and the Health Information Technology for Economic and Clinical Health Act, or HITECH.

This may require us to execute HIPAA business associate agreements, or BAAs, with certain customers that are “covered entities” under HIPAA, which would subject us to additional liabilities, penalties and fines in the event we fail to comply with the terms of such agreements.

The storage of such information may require us to modify and enhance our platform at a significant cost.

Any failure or perceived failure by us to comply with laws, regulations, policies, legal or contractual obligations, industry standards, or regulatory guidance relating to privacy or data security, may result in governmental investigations and enforcement actions, litigation, fines and penalties or adverse publicity, and could cause our customers and partners to lose trust in us, which could have an adverse effect on our reputation and business.

1 unchanged sentence

Future laws, regulations, standards and other obligations or any changed interpretation of existing laws or regulations could impair our ability to develop and market new features and maintain and grow our customer base and increase revenue.

Future restrictions on the collection, use, sharing or disclosure of data or additional requirements placed upon us, our customers, partners or end consumers in connection with the use and disclosure of such information could require us to incur additional costs or modify our platform or other aspects of our products and services, possibly in a material manner, and could increase the complexity and cost of developing and deploying new products or limit our ability to develop new products and features altogether.

could increase the complexity and cost of developing and deploying new products or limit our ability to develop new products and features altogether.

If our policies, procedures, or measures relating to privacy, data protection, marketing, or customer communications fail or are perceived to fail to comply with laws, regulations, policies, legal obligations or industry standards, we may be subject to governmental enforcement actions, litigation, regulatory investigations, fines, penalties and negative publicity and could cause our application providers, customers and partners to lose trust in us, which could materially affect our business, operating results and financial condition.

Furthermore, our third-party reseller customers, over which we have more limited control, may not comply with the laws, regulations and policies described above, which may damage our reputation or subject us to costly legal or regulatory inquiries and liability.

The reliability of our network and support infrastructure will be critical to our success.

Sustained failures or outages could lead to significant costs and service disruptions, which could negatively affect our business, financial results and reputation.

Our customers access our platform through our website and related technologies.

If any service provider fails to provide sufficient capacity to support our platform, experiences service outages or otherwise ceases to do business, such failure could interrupt our customers' access to our services.