−Removed: In addition to the other information set forth in this report, before deciding to invest in J2 Global or to maintain or increase your investment, you should carefully consider the factors discussed in Part I, Item 1A “Risk Factors” in our Annual Report on Form 10-K for the year ended December 31, 2020 (the “10-K Risk Factors”) as well as in other documents we file from time to time with the SEC, including the Quarterly Reports on Form 10-Q and any Current Reports on Form 8-K filed or to be filed by us in 2021.
+Added: In addition to the other information set forth in this report, before deciding to invest in J2 Global or to maintain or increase your investment, you should carefully consider the factors discussed in Part I, Item 1A “Risk Factors” in our Annual Report on Form 10-K for the year ended December 31, 2020 and in Part II, Item 1A “Risk Factors” in our Quarterly Report on Form 10-Q for the quarter ended March 31, 2021 (the “10-K/10-Q Risk Factors”) as well as in other documents we file from time to time with the SEC, including the Quarterly Reports on Form 10-Q and any Current Reports on Form 8-K filed or to be filed by us in 2021.
If any of these risks occur, our business, prospects, financial condition, operating results and cash flows could be materially adversely affected.
−Removed: The 10-K Risk Factors are not the only ones we face.
+Added: The 10-K/10-Q Risk Factors are not the only ones we face.
Additional risks and uncertainties not presently known to us or that we currently deem immaterial also may impair our business operations.
−Removed: There have been no material changes from the 10-K Risk Factors, except as provided below.
−Removed: We may not be able to complete the proposed spin-off of our Cloud Fax business within the expected time frame or at all.
−Removed: The proposed transaction will require significant time and attention from our management, will result in increased operating expenses and, if completed, may not produce the anticipated benefits.
−Removed: On April 19, 2021, we announced plans to separate into two publicly traded companies:
−Removed: one addressing healthcare interoperability and primarily comprising the Cloud Fax business, which will do business as Consensus, and one that will focus on building an internet platform focused on key verticals, including technology and gaming, shopping, health, cybersecurity and SMB, which will continue to do business as J2 Global.
−Removed: Completion of the separation will be subject to certain conditions, such as approval by our Board of Directors, receipt of a private letter ruling from the Internal Revenue Service (“IRS”), receipt of one or more tax opinions and effectiveness of a registration statement filed with the U.S.
−Removed: Securities and Exchange Commission.
−Removed: Our ability to complete the separation could be affected by unanticipated developments or changes in market conditions.
−Removed: For these and other reasons, we may not be able to complete the separation within the expected time frame, or at all.
−Removed: Even if the separation is completed, we may not realize the anticipated benefits.
−Removed: As independent publicly-traded companies, Consensus and the remaining businesses of J2 Global will be smaller, less diversified companies relative to J2 Global today, with a narrower business focus and may be more vulnerable to changing market conditions, which could materially and adversely affect their respective business, financial condition and results of operations.
−Removed: Further, there can be no assurance that the combined value of the common stock of the two publicly-traded companies will be equal to or greater than what the value of our common stock would have been had the proposed separation not occurred.
−Removed: In the near-term, the separation will result in additional operating expenses, including one-time transaction expenses associated with the spin-off, and will require significant time and attention of our management, which could distract management from the operation of our business.
−Removed: In addition, we could face difficulties retaining key customers or employees as a result of the separation.
−Removed: If any of these risks materialize, they could adversely affect our operating results.
−Removed: The proposed spin-off of our Cloud Fax business may result in disruptions to, and negatively impact our relationships with, our customers and other business partners.
−Removed: Uncertainty related to the proposed spin-off of our Cloud Fax business may lead customers and other parties with which we currently do business or may do business with in the future to terminate or attempt to negotiate changes in existing business relationships, or consider entering into business relationships other than us.
−Removed: These disruptions could have a material and adverse effect on our businesses, financial condition, results of operations and prospects.
−Removed: The effect of such disruptions could be exacerbated by any delays in the completion of the separation.
−Removed: If the distribution, together with certain related transactions, does not qualify as a transaction that is generally tax-free for U.S.
−Removed: federal income tax purposes, J2 Global, Consensus and J2 Global stockholders could be subject to significant tax liabilities.
−Removed: The separation will be effected by a pro rata distribution to our shareholders of at least 80.1% of the stock of a newly-formed corporation that will comprise our Cloud Fax business.
−Removed: We intend to obtain (i) a private letter ruling from the IRS, satisfactory to our Board of Directors, regarding certain U.S.
−Removed: federal income tax matters relating to the separation and related transactions and (ii) one or more opinions of outside counsel, satisfactory to our Board of Directors, regarding the qualification of the distribution, together with certain related transactions, as generally tax-free, for U.S.
−Removed: federal income tax purposes, under Sections 355 and 368(a)(1)(D) of the Internal Revenue Code (the “Code”).
−Removed: Any opinions of outside counsel or other external tax advisors and any IRS private letter ruling will be based, among other things, on various facts and assumptions, as well as certain representations, statements and undertakings of J2 Global and Consensus (including those relating to the past and future conduct of J2 Global and Consensus).
−Removed: If any of these facts, assumptions, representations, statements or undertakings is, or becomes, inaccurate or incomplete, or if J2 Global or Consensus breach any of their respective covenants contained in any of the separation-related agreements or in the documents relating to the IRS private letter ruling and/or any tax opinion, the IRS private letter ruling and/or any tax opinion may be invalid.
−Removed: Accordingly, notwithstanding receipt of the IRS private letter ruling and/or opinions of counsel or other external tax advisors, the IRS could determine that the distribution and certain related transactions should be treated as taxable transactions for U.S.
−Removed: federal income tax purposes if it determines that any of the facts, assumptions, representations, statements or undertakings that were included in the request for the IRS private letter ruling or on which any opinion was based are false or have been violated.
−Removed: In addition, the IRS private letter ruling will not address all of the issues that are relevant to determining whether the distribution, together with certain related transactions, qualifies as a transaction that is generally tax-free for U.S.
−Removed: federal income tax purposes, and an opinion of outside counsel or other external tax advisor represents the judgment of such counsel or advisor which is not binding on the IRS or any court.
−Removed: Accordingly, notwithstanding receipt by J2 Global of the IRS private letter ruling and the tax opinions referred to above, there can be no assurance that the IRS will not assert that the distribution and/or certain related transactions do not qualify for tax-free treatment for U.S.
−Removed: federal income tax purposes or that a court would not sustain such a challenge.
−Removed: In the event the IRS were to prevail with such challenge, J2 Global, Consensus and J2 Global’s stockholders could be subject to significant U.S.
−Removed: federal income tax liability.
−Removed: If the distribution, together with certain related transactions, fails to qualify as a transaction that is generally tax-free under Sections 355 and 368(a)(1)(D) of the Code, in general, for U.S.
−Removed: federal income tax purposes, J2 Global would recognize taxable gain as if it has sold the Consensus common stock in a taxable sale for its fair market value and J2 Global stockholders who receive shares of Consensus common stock in the distribution would be subject to tax as if they had received a taxable distribution equal to the fair market value of such shares.
−Removed: In addition, we may incur certain tax costs in connection with the separation, including non-U.S.
−Removed: tax costs resulting from separations in multiple non-U.S.
−Removed: jurisdictions that do not legally provide for tax-free separations, which may be material.
−Removed: As a result of requirements of Section 355 of the Code or other applicable tax laws, in order to avoid the risk of incurring material tax-related liabilities, for a period of time after the separation we may determine to forego certain strategic transactions, equity issuances or repurchases or other transactions that we would otherwise believe to be in the best interests of our stockholders or that might increase the value of our business.
+Added: There have been no material changes from the 10-K/10-Q Risk Factors.
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.