Upland Software (UPLD) 2023年年度報告「NASDAQ」.pdf

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1、 UNITED STATESSECURITIES AND EXCHANGE COMMISSIONWashington,D.C.20549FORM 10-K ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d)OF THE SECURITIES EXCHANGE ACT OF 1934For the fiscal year ended December 31,2023OR TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d)OF THE SECURITIES EXCHANGE ACT OF 1934Commiss

2、ion File Number 001-36720Upland Software,Inc.(Exact name of registrant as specified in its charter)Delaware27-2992077(State or other jurisdiction ofincorporation or organization)(I.R.S.EmployerIdentification Number)401 Congress Ave.,Suite 1850Austin,Texas 78701(512)960-1010(Address,including zip cod

3、e,and telephone number,including area code,of registrants principal executive offices)Securities registered pursuant to Section 12(b)of the Act:Title of each classTrading SymbolName of each exchange on which registeredCommon Stock,par value$0.0001 per shareUPLDThe Nasdaq Global MarketPreferred Stock

4、 Purchase Rights-The Nasdaq Global MarketSecurities registered pursuant to Section 12(g)of the Act:NoneIndicate by check mark if the registrant is a well-known seasoned issuer,as defined in Rule 405 of the Securities Act.Yes No xIndicate by check mark if the registrant is not required to file report

5、s pursuant to Section 13 or Section 15(d)of the Act.Yes No xIndicate by check mark whether the registrant(1)has filed all reports required to be filed by Section 13 or 15(d)of the Securities Exchange Act of 1934 during the preceding 12 months(or for such shorter periodthat the registrant was require

6、d to file such reports),and(2)has been subject to such filing requirements for the past 90 days.Yes x No Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T(232.405 of this chapter)duri

7、ng thepreceding 12 months(or for such shorter period that the registrant was required to submit and post such files).Yes x No Indicate by check mark whether the registrant is a large accelerated filer,an accelerated filer,a non-accelerated filer,a smaller reporting company,or an emerging growth comp

8、any.See the definitions of“largeaccelerated filer,”“accelerated filer,”“smaller reporting company,”and“emerging growth company”in Rule 12b-2 of the Exchange Act.Large accelerated filerAccelerated filerxNon-accelerated filerSmaller reporting companyEmerging growth companyIf an emerging growth company

9、,indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards providedpursuant to Section 13(a)of the Exchange Act.Indicate by check mark whether the registrant has filed a report on and attestatio

10、n to its managements assessment of the effectiveness of its internal control over financial reporting under Section 404(b)of theSarbanes-Oxley Act(15 U.S.C.7262(b)by the registered public accounting firm that prepared or issued its audit report.If securities are registered pursuant to Section 12(b)o

11、f the Act,indicate by check mark whether the financial statements of the registrant included in the filing reflect the correction of an error to previously issuedfinancial statements.Indicate by check mark whether any of those error corrections are restatements that required a recovery analysis of i

12、ncentive-based compensation received by any of the registrants executive officers during therelevant recovery period pursuant to 240.10D-1(b).Indicate by check mark whether the registrant is a shell company(as defined in Rule 12b-2 of the Act).Yes No xThe aggregate market value of the registrants co

13、mmon stock held by non-affiliates of the registrant was approximately$108.9 million based upon the closing price of$3.60 of such common stock onthe Nasdaq Global Market on June 30,2023(the last business day of the registrants most recently completed second fiscal quarter).Shares of common stock held

14、 as of June 30,2023 by each directorand executive officer of the registrant,as well as shares held by each holder of 10%of the common stock known to the registrant,have been excluded for purposes of the foregoing calculation.Thisdetermination of affiliate status is not a conclusive determination for

15、 other purposes.As of February 20,2024,28,855,055 shares of the registrants Common Stock were outstanding.Documents incorporated by reference:Certain portions,as expressly described in this Annual Report on Form 10-K,of the registrants Proxy Statement for the 2024 Annual Meeting of the Stockholders,

16、to be filed not later than 120 daysafter the end of the year covered by this Annual Report,are incorporated by reference into Part III of this Annual Report where indicated.TABLE OF CONTENTS PART IItem 1.Business4Item 1A.Risk Factors11Item 1B.Unresolved Staff Comments32Item 1C.Cybersecurity32Item 2.

17、Properties33Item 3.Legal Proceedings34Item 4.Mine Safety Disclosures34PART IIItem 5.Market for Registrants Common Equity,Related Stockholder Matters and Issuer Purchasesof Equity Securities35Item 6.Reserved36Item 7.Managements Discussion and Analysis of Financial Condition and Results of Operations3

18、6Item 7A.Quantitative and Qualitative Disclosures about Market Risk53Item 8.Financial Statements and Supplementary Data55Report of Independent Registered Public Accounting Firm56Consolidated Financial Statements58Consolidated Balance Sheets58Consolidated Statements of Operations59Consolidated Statem

19、ents of Comprehensive Loss60Consolidated Statements of Equity61Consolidated Statements of Cash Flows62Notes to the Consolidated Financial Statements63Item 9.Changes in and Disagreements with Accountants on Accounting and Financial Disclosure95Item 9A.Controls and Procedures95Item 9B.Other Informatio

20、n95Item 9C.Disclosure Regarding Foreign Jurisdictions that Prevent Inspections95PART IIIItem 10.Directors,Executive Officers and Corporate Governance97Item 11.Executive Compensation97Item 12.Security Ownership of Certain Beneficial Owners and Management and Related StockholderMatters97Item 13.Certai

21、n Relationships and Related Transactions and Director IndependenceItem 14.Principal Accountant Fees and Services97PART IVItem 15.Exhibits and Financial Statement Schedules97Item 16.Form 10-K Summary97SIGNATURES1001PART ISpecial Note Regarding Forward Looking StatementsThis Annual Report on Form 10-K

22、 contains“forward-looking statements”within the meaning of Section 27A of the Securities Act,and Section 21E of theSecurities Exchange Act of 1934,as amended(the“Exchange Act”).Forward-looking statements generally relate to future events or our future financial oroperating performance.Forward-lookin

23、g statements may be identified by the use of forward-looking words such as“anticipate,”“believe,”“may,”“will,”“continue,”“seek,”“estimate,”“intend,”“hope,”“predict,”“could,”“should,”“would,”“project,”“plan,”“expect”or the negative or plural of these words orsimilar expressions,although not all forwa

24、rd-looking statements contain these words.These forward-looking statements include,but are not limited to,statements concerning the following:our financial performance and our ability to achieve or sustain profitability or predict future results;our plans regarding future acquisitions and our abilit

25、y to consummate and integrate acquisitions;our ability to expand our go to market operations,including our marketing and sales organization,and successfully increase sales of our products;our ability to obtain financing in the future on acceptable terms or at all;our expectations with respect to rev

26、enue,cost of revenue and operating expenses in future periods;our expectations with regard to revenue from perpetual licenses,usage fees and professional services;our ability to adapt to macroeconomic factors impacting the global economy,including foreign currency exchange risk,inflation and supply

27、chainconstraints;our ability to attract and retain customers;our ability to successfully enter new markets and manage our international expansion;our ability to comply with privacy laws and regulations;our ability to incorporate and deliver artificial intelligence(“AI”)functionality into our product

28、s and services;our ability to deliver high-quality customer service;our plans regarding,and our ability to effectively manage,our growth;maintaining our senior management team and key personnel;the performance of our resellers;our ability to adapt to changing market conditions and competition;our ab

29、ility to adapt to technological change and continue to innovate;global economic and financial market conditions and uncertainties;the growth of demand for cloud-based,digital transformation applications;our ability to integrate our applications with other software applications;maintaining and expand

30、ing our relationships with third parties;costs associated with defending intellectual property infringement and other claims;our ability to maintain,protect and enhance our brand and intellectual property;our expectations with regard to trends,such as seasonality,which affect our business;impairment

31、s to goodwill and other intangible assets;our beliefs regarding how our applications benefit customers and what our competitive strengths are;the operation,reliability and security of our third-party data centers;our expectations as to the payment of dividends;our Share Repurchase Plan(as defined in

32、 Note 13.Stockholders Equity),including expectations regarding the timing and manner of repurchases madeunder the Share Repurchase Plan;our current level of indebtedness,including our exposure to variable interest rate risk;2potential elimination or limitation of tax incentives or tax losses and/or

33、reduction of U.S.federal net operating loss carryforwards(“NOLs”);andother risk factors included under“Risk Factors”in this Annual Report on Form 10-K.You should not rely upon forward-looking statements as predictions of future events.We have based the forward-looking statements contained in this An

34、nualReport on Form 10-K primarily on our current expectations and projections about future events and trends that we believe may affect our business,financialcondition,results of operations,and prospects.The outcome of the events described in these forward-looking statements is subject to risks,unce

35、rtainties,andother factors,including those described in the section titled“Risk Factors”and elsewhere in this Annual Report on Form 10-K.Moreover,we operate in a verycompetitive and rapidly changing environment.New risks and uncertainties emerge from time to time,and it is not possible for us to pre

36、dict all risks anduncertainties that could have an impact on the forward-looking statements contained in this Annual Report on Form 10-K.We cannot assure you that theresults,events,and circumstances reflected in the forward-looking statements will be achieved or occur,and actual results,events,or ci

37、rcumstances coulddiffer materially from those described in the forward-looking statements.The forward-looking statements made in this Annual Report on Form 10-K relate only to events as of the date on which the statements are made.We undertakeno obligation to update any forward-looking statements ma

38、de in this Annual Report on Form 10-K to reflect events or circumstances after the date of thisAnnual Report on Form 10-K or to reflect new information or the occurrence of unanticipated events,except as required by law.We may not actually achievethe plans,intentions,or expectations disclosed in our

39、 forward-looking statements and you should not place undue reliance on our forward-looking statements.Our forward-looking statements do not reflect the potential impact of any future acquisitions,mergers,dispositions,joint ventures,or investments we maymake.All references to“Upland,”“we,”“us”or“our”

40、mean Upland Software,Inc.3Item 1.BusinessUpland provides cloud-based software applications that enable our customers to drive digital transformation in the following business functions:Marketing.Digital marketing,e-commerce,and customer service teams use our applications to interact with consumers a

41、cross multiple channels toacquire new customers,drive product and service utilization,resolve issues,and build brand loyalty.Our applications deliver value to organizationsacross a number of use cases including mobile messaging,mobile application marketing,Voice of the Customer(VOC),email marketing,

42、knowledgemanagement and call center productivity.Sales.Sales teams employ our applications to drive growth through deeper customer engagement,reduced sales cycle times,and improvedcollaboration between sales,marketing,and other customer-facing functions.We offer applications that help organizations

43、optimize their salesopportunity and account management processes,coordinate proposal and reference activities,collaborate on the creation and publication of digitalcontent and gain increased control over key sales and marketing workflows,activities and budgets.Contact Center.Customer service and sup

44、port environments use our applications to enable agents to resolve issues and engage customers.We offerapplications that improve customer experience and reduce call volume and cycle times through customer self-service products and VoC technologythat captures customer sentiment in real-time.Upland al

45、so offers products that improve call center agent productivity by providing more direct accessto knowledge and to customer sentiment thereby improving both inbound call outcomes and proactive outbound success.We also provide productsthat deliver knowledge-based,guided workflows for customer service

46、environments supporting complex products in strict regulatory requirements.Additional solutions help call center leadership to manage agent performance and measure real-time performance relative to call resolution andcustomer sentiment,improve performance through gamification,and gather agent feedba

47、ck to keep employee engagement high.Knowledge Management.In addition to contact centers,we provide knowledge management applications to a variety of lines of businesses to improveemployee productivity and value by providing more direct access to information.Upland knowledge solutions provide access

48、to time-criticalinformation from within our applications or other systems that exist within an organization and delivers a unified view of all related content.We alsoprovide products that deliver knowledge-based,guided workflows for customer service environments supporting complex products in strict

49、 regulatoryrequirements.Project Management.Business leaders and project management officers(PMOs)use our applications to optimize project portfolios,balance capacityagainst demand,improve financial-based decision making,align execution of projects to strategy across large organizations,and manage th

50、e projectdelivery lifecycle.Our applications deliver value to project management across a variety of use cases including continuous improvement,enterpriseIT,new product development,and services departments along with industry depth in higher education,public sector,and healthcare IT.Information Tech

51、nology.Information technology(IT)departments use our applications to manage a variety of IT activities and resources across theenterprise.Our applications help information technology departments ensure they are delivering against the objectives of the business by helping themselect and prioritize th

52、e right investments,gain greater control of resource demand and allocation,and track and report benefit realization.Ourapplications enable executives to gain better insight into IT spending to help prevent cost overruns and understand the nature of consumption.Business Operations.Multiple functional

53、 departments use our applications to streamline operations and accelerate business performance across theirvalue chains.Upland solutions in this area range from supply chain collaboration and factory management,back office document and vendormanagement,to applications that improve sales responsivene

54、ss.In addition,our products help operations team compose,automate and exchangedocuments based on content from existing back-office systems to produce interactive business communications,while maintaining compliance andreducing production costs.Human Resources and Legal.Human resources(HR),legal depa

55、rtments,and law firms use our applications to improve collaboration and operationalcontrol and streamline routine processes.We offer applications that automate document management and workflow including,contracts,records,andother documentation that require enhanced security and compliance requiremen

56、ts.Other applications support HR-specific workflows includingonboarding,employee management,termination,HR support,and time and expense management.4Through a series of acquisitions and integrations,we have built a diverse family of software applications under the Upland brand.To support future growt

57、h,weintend to continue to pursue acquisitions within our core cloud offerings of complementary technologies and businesses.We expect that this will expand ourcustomer base and market access,resulting in increased benefits of scale.Consistent with our growth strategy,we have made a total of 31 acquis

58、itions in the 12years ending December 31,2023.The operating platform we use to transform acquired companies in order to maintain a consistently high level of operating performance is called UplandOne.This platform consists of six key areas:High-Touch Customer Success Program.We have institutionalize

59、d a set of unique customer commitments and deliverables we call the UplandCustomer Success Program that includes onboarding and training,a dedicated customer success representative,upgraded success plans,virtual userconferences,periodic executive outreach,Net Promoter Score(NPS),and an ongoing custo

60、mer feedback loop.Quality-Focused R&D.Our approach to research and development(R&D)at Upland is straight-forward:prioritize the customer need,leverage ametrics-driven agile approach with visibility and accountability,and deploy up-to-date development systems and processes to ensure quality andsecuri

61、ty are built into every step of development.In 2022,we announced the creation of our own R&D Center of Excellence in India.In 2023,in aneffort to achieve our strategic development objectives,we increased our hiring in the Center of Excellence while maintaining a similar cost structure,created develo

62、pment pods to partner specifically with our business units,and materially improved our development capacity and productcompetitiveness.Customer-Driven Innovation.Customer feedback is at the heart of the Upland customer experience.New features are added and prioritized in ourproduct roadmaps,and then

63、 fine-tuned,based on direct customer input.Requests from our Premier Success Plan customers are given additionalpriority weighting for new features and minor issue resolution.Product feedback outlets include customer success account management,virtual userconferences,customer advisory boards,and Upl

64、ands online communities.Expert Professional Services.Through our Professional Services organization,Upland is committed to delivering the most value from a customersUpland investment in the shortest possible time.Once we engage on a project,we dedicate a team to the planning,configuration,integratio

65、n,launch,administration,and maintenance of the application.Global Support.Upland Global support includes:prioritized issue escalation and resolution;online and phone support;access to a community to shareand discuss best practices,support tips,training materials,and custom reports;a knowledge-base w

66、ith alerts,service recommendations,andtroubleshooting content;unlimited case submissions and real-time case updates;and technical support access worldwide.For customers that havemore urgent support requirements,Upland Premier Success Plans provide enhanced response times and availability for the mos

67、t severe supportrequests.Enterprise Cloud Platform.Uplands products run on an enterprise-class cloud environment-delivering power,reliability,and flexibility.We utilizethird-party cloud providers for our cloud-based products and move acquired products to third-party cloud providers in connection wit

68、h our acquisitionintegration program.Our applications are scalable and can support large deployments while maintaining high levels of availability,performance andsecurity levels.Our Competitive StrengthsWe believe the following competitive strengths are keys to our success:Large,diversified customer

69、 base.Our customer base is highly diverse and spans a broad array of industries,including financial services,consultingservices,technology,manufacturing,media,telecommunications,government,insurance,non-profit,healthcare,life sciences,retail and hospitality.We service customers of varying size,rangi

70、ng from large global corporations and government agencies to medium-sized businesses.We have morethan 10,000 customers,with no customer representing more than 10%of our revenue.Diversified family of cloud applications.We offer a family of cloud-based software applications that addresses a broad rang

71、e of enterprise needs.Webelieve this benefits our customers as compared to many of our cloud-based competitors who offer only a single point solution for a more limited anddiscrete need.5Recurring revenue model with high visibility.We believe we have an attractive operating model due to the recurrin

72、g nature of our subscriptionrevenue,which results in greater visibility and predictability of future revenue and enhances our ability to effectively manage our business.Inaddition,the cloud-based nature of our model accommodates significant additional business volume with limited incremental costs,p

73、roviding us withopportunities to improve our operating margins.Proven M&A capability.We have a proven ability to successfully identify,acquire,and integrate complementary businesses to grow our company,asevidenced by the 31 acquisitions we have completed in the 12 years ending December 31,2023.We be

74、lieve that our acquisition experience andstrategy give us a competitive advantage in identifying additional opportunities to expand our family of software applications to better serve ourcustomers.Experienced,proven management team.Our management team has significant operating experience and previou

75、sly occupied key leadership roles atboth private and public companies.In addition,our managements extensive knowledge of the industry and experience in building businesses hasenabled us to establish a leading position within the enterprise software market.Cloud-based delivery.We deliver our software

76、 applications and functionality primarily through the cloud,with no hardware or software installationrequired by our customers.This delivery model allows us to provide reliable,cost-effective applications to our customers,add subscribers withminimal incremental effort and deploy new functionality an

77、d upgrades quickly and efficiently.We believe our cloud-based delivery model providesus with a competitive advantage over legacy processes and on-premise systems.Commitment to customer success.We have a dedicated customer success organization whose mission is to drive adoption,value realization,rete

78、ntion,and loyalty across our customer base.Our focus on enabling our customers success is a key reason our annual net dollar retention rate was95%as of December 31,2023.See“Item 7.Managements Discussion and AnalysisKey Metrics and Non-GAAP Financial Measures,”for ourdefinition of annual net dollar r

79、etention rate.Our commitment to customer success has enabled us to expand our footprint within customerorganizations and facilitate the ongoing adoption of our enterprise software applications.We utilize NPS methodology to track our progress and drivecontinuous improvement.Our Strategy for GrowthWe

80、believe the key elements of our strategy for growth are as follows:Acquire complementary software businesses.We intend to continue to pursue acquisitions of complementary technologies,products,and businessesto expand our footprint in target business functions,and to provide access to new markets and

81、 increased benefits of scale.Our experienced corporatedevelopment team continually monitors a pipeline of potential acquisition candidates.We believe that our acquisition experience and strategy give usa competitive advantage in identifying additional opportunities to expand our portfolio cloud-base

82、d applications to better serve our customers.Weintend to prioritize acquisitions within the solution categories we currently offer.Improve and enhance applications.We intend to continue to invest in research and development and work closely with our customers to identify andimprove applications,feat

83、ures and functionalities that address customer requirements across the enterprise spectrum.We also intend to continue toexpand our support for key third-party integrations and presence in key partner marketplaces.Increase sales to existing customers.We believe there is a significant opportunity to e

84、xpand the adoption of our applications within our existingcustomer organizations,particularly within divisions or departments that have not previously used our applications.We also intend to cross-selladditional applications to our existing customers,as very few of our customers currently use more t

85、han one of our applications.In addition,we intendto add new applications that will address additional functions within the enterprise spectrum.We believe these initiatives will significantly increasethe value of our partnership with our customers,further strengthen our competitive position,and drive

86、 increased adoption of multiple applications byour customers.Add new customers.We maintain direct sales and marketing capabilities to further grow our customer base.We also maintain indirect sales channelsthrough alliances with strategic partners that can leverage our applications with their complem

87、entary services and technologies.In addition,wecontinue to expand the range of integrations between our software and third-party applications and platforms,which we believe make ourapplications more attractive to a broader audience of potential customers.6CustomersWe service customers ranging from l

88、arge global corporations and various government agencies as well as small and medium-sized businesses.Our customersoperate in a wide variety of industries,including financial services,consulting services,technology,manufacturing,media,telecommunications,government,insurance,non-profit,healthcare,lif

89、e sciences,retail and hospitality.For the year ended December 31,2023,approximately 91%of our recurring revenue wasgenerated from what we consider to be major accounts.We consider customers with contracted annual recurring revenue of$25,000 or more to be“majoraccounts.”SalesWe sell primarily through

90、 a direct sales organization comprised of inside sales and field sales personnel.In addition to our direct sales organization,we have anindirect sales organization that sells to distributors and value-added resellers.We employ a land-and-expand go-to-market strategy.After we demonstrate thevalue of

91、an initial application to a customer,our sales and account management teams work to expand the adoption of that initial application across thecustomer,and cross-sell additional applications to address other software needs of the customer.Our customer success organization supports our direct saleseff

92、orts by managing the post-sale customer lifecycle.Our subscription agreements are typically sold either on a per-seat basis or on a minimum contracted volume basis with overage fees billed in arrears,depending on the application being sold.Contract terms typically range from one to three years and a

93、re prepaid annually in advance.MarketingOur marketing activities are designed to build awareness of the Upland brand and the solutions we offer,generate thought leadership,and create demand,resulting in leads and opportunities for our sales organizations.We focus a significant portion of our marketi

94、ng activities on new customer acquisition.Ourmarketing programs target business users,influencers,and decision makers who participate in the buying cycles of various business functions inside largeorganizations including marketing,sales,contact centers,knowledge management,project management,informa

95、tion technology,business operations,humanresources and legal.Our lead and demand generation programs include:website improvements to provide information about us and our cloud software products and to serve as a platform to capture interest and leads;third-party data software platform utilization to

96、 identify prospects doing research on relevant software solutions;integrated digital marketing campaigns,including email,search and social media advertising,blogs,and webinars;search engine optimization to improve organic search keyword rankings;field marketing events for customers and prospective c

97、ustomers;participation in,and sponsorship of,executive events,trade shows,and industry events;our online virtual user conferences;public relations,analyst relations,and organic social media initiatives;andsales development representatives(“SDR”)who respond to incoming leads to convert them into new

98、sales opportunities.Customer SuccessOur customer success organization is structured to manage all aspects of our post-sale customer lifecycle.This organization consists of dedicated teams with amission to drive adoption of our products,value realization,retention,and loyalty across our customer base

99、.Our customer success organization has three corefunctional areas with strategic focus on customer relationship management:Customer Success Management.Our CSM team partners with customers throughout their lifecycle with the Upland family of products to ensure thecustomer is getting the most out of t

100、heir technology investment.CSMs are experts in matching use of Upland products to a customers individualbusiness context sometimes bringing in or coordinating across other teams and internal resources where necessary to achieve the customers goals.7Professional Services.Our professional services tea

101、m provides critical expertise in Uplands product areas throughout the customer journey.Duringimplementation,this team is responsible for coordinating all activities relating to the implementation,transition,and on-boarding of new customersand assisting new customers with the addition of new products

102、 to their accounts.Typical implementation professional services engagements vary inlength from a few weeks to several months depending on the size and scope of the engagement and are in addition to services provided under ourstandard customer agreement and are fee-based.Beyond implementation,this te

103、am also provides advisory and consulting services,integrationservices and configuration change services as a customers business needs change over time.Customer Support.Our customer support team is conveniently available through multiple channels to help our customers maximize the return ontheir inve

104、stment in our technology.We also provide 24/7/365 coverage to help ensure our software products maintain global availability.In addition,our customer support team manages and administers the Upland customer community to provide an outstanding knowledge base and self-serviceexperience.Our customer su

105、ccess organization manages programs to reinforce the ongoing business value of our applications.These service offerings include:Health checks and business reviews where we engage core users and business buyer sponsors to deliver a detailed scorecard and recommendationson driving product adoption and

106、 business value.Consumption review and recommendations designed to deliver best practice recommendations for implementation strategy and a roadmap proposalfor aligning the system with customers evolving process maturity to increase application usage.Premier success plans that provide a bundled servi

107、ces,support,and product experience offering with two tiers(gold and platinum)designed toprovide maximum customer value.Executive outreach where we promote open communication between the Upland leadership team and our customers key stakeholders,which is fullycommitted to making sure customers are del

108、ighted with their Upland experience,and customer executives.Technology and OperationsOur cloud-based family of applications utilizes a multi-tenant architecture and our customers access our applications using a secure Internet connection througha standard web browser.Our applications are easy to dep

109、loy,highly configurable,scalable,flexible,and secure,and provide our customers with a modern andintuitive user experience.We have partnered with third-party hosting platforms to provide the hardware and infrastructure necessary to provide our services to our customers.Third-partyhosting platform fac

110、ilities provide 24/7/365 security,biometric access controls,redundant networking,power and environmental systems,and monitoring.Upland Software designs and operates the infrastructure architecture with fully redundant subsystems,highly available configurations,and defense in depthsecurity zones.Our

111、applications are built on highly available and modular architectures that balance customer workloads across multiple servers.This allows us to provide aflexible method for scaling customers without impacting other parts of the architectural environment while maintaining the high levels of uptime our

112、 customersrequire.Our family of applications offers high levels of security through logical data segregation of each customers data from the data of other customers and throughlimiting access to our platform to only those individuals authorized by our customers.In addition,sensitive customer data is

113、 encrypted“at rest”and“in transit”over secure connections to redundant storage in a secondary location.We maintain a formal and comprehensive security program designed to help preserve the security and integrity of customer data,protect against security threatsor data breaches,and prevent unauthoriz

114、ed access to data.See Item 1C.Cybersecurity.8CompetitionThe overall markets we serve are rapidly evolving and subject to changing technology,shifting customer needs,and frequent introductions of new applications.The intensity and nature of our competition varies significantly across our range of ent

115、erprise applications.We compete against larger enterprise softwarecompanies that provide a full suite of Software as a Service,or SaaS,solutions focused on the functional areas we serve or the problems our cloud offeringsaddress.We face competition both from point solution providers,including legacy

116、 on-premise enterprise systems,and other cloud-based software vendors thatmay address one or more of the functional elements of our applications.In addition,we face competition from manual processes and traditional tools,such aspaper-based procedures,spreadsheets,and email.We believe the principal c

117、ompetitive factors in our market include the following:breadth and depth of application functionality;ease of deployment and use of applications;total cost of ownership;levels of customer support satisfaction;brand awareness and reputation;capability for configuration,integration,scalability,and rel

118、iability of applications;ability to innovate and respond to customer needs rapidly;andlevel of integration among applications and with other enterprise systems.Our ability to remain competitive will largely depend on the strength of our applications,the effectiveness of our sales and marketing effor

119、ts,the quality of ourcustomer success organization,and our ability to acquire complementary technologies,products,and businesses to enhance the features and functionality of ourapplications.Intellectual Property and Proprietary RightsWe rely on a combination of trademark,copyright,trade secret,and p

120、atent laws in the United States and other jurisdictions as well as confidentiality proceduresand contractual provisions to protect our intellectual property.SeasonalityWe have historically experienced seasonality in terms of when we enter into customer agreements.We sign a significantly higher perce

121、ntage of agreementswith new customers,and renew agreements with existing customers,in the fourth quarter of each calendar year,resulting in our cash flow from operationshistorically being higher in the first quarter of each calendar year than in other quarters.We expect this seasonality to continue,

122、or possibly increase in thefuture.See“Risk FactorsRisks Related to Our Common StockCertain of our operating results and financial metrics are difficult to predict as a result ofseasonality.”RegulationWe believe that our businesses and operations are in substantial compliance with all applicable gove

123、rnment laws and regulations.Any additional measures tomaintain compliance are not expected to materially affect our capital expenditures,competitive position,financial position or results of operations.Variouslegislative and administrative regulations applicable to us have become effective or are un

124、der consideration in many parts of the world.To date,suchdevelopments have not had a substantial adverse impact on our revenues,earnings or cash flows.However,if new or amended laws or regulations imposesignificant operational restrictions and compliance requirements upon us or our business,our capi

125、tal expenditures,results of operations,financial condition andcompetitive position could be negatively impact.Refer to“Risk Factors”for further information.9Human CapitalWe believe that our ability to attract and retain highly skilled employees is critical to our success.As of December 31,2023,we ha

126、d 1,061 full time employees,with the majority of our employees located in the United States,Australia,Canada,India,Ireland,and the United Kingdom.None of our employees are coveredby a collective bargaining agreement.We have never experienced a strike or similar work stoppage,and we consider our rela

127、tions with our employees to begood.Human capital measures and objectives we focus on in managing its business include the following:Recognition of Collaborative Problem Solvers.We have clearly defined company values that highlight the importance of collaboration,clearcommunication,and solving proble

128、ms.We have annual awards that celebrate these values with both peer and management nominations at thebusiness unit,function,and company-wide levels.Employee Talent Acquisition and Retention.We have always supported a“work anywhere”philosophy that allows us to recruit and retain top talentthroughout

129、the world.Our team members have the flexibility to work remotely,in an office where available,or a hybrid of the two,according to theirpreferences.We believe that this“work anywhere”philosophy ultimately promotes global sustainability,as it has allowed us to reduce our worldwidecorporate office foot

130、print,lower employee travel and commuting and the associated green house gas emissions.In addition to a flexible“workanywhere”philosophy,our total compensation and benefits packages are market competitive.Additionally,we maintain a system for providing ourpersonnel an opportunity to express grievanc

131、es or concerns,which includes an anonymous whistleblower hotline.Employee Engagement.We survey team members twice a year to gather feedback on key factors of employee experience,including work/life blend,social connection and learning and development.As part of our Diversity,Equity,and Inclusion ini

132、tiatives,we also have a formal EmployeeResource Group(“ERG”)program that fosters the formation of and provides support to employee-led groups dedicated to education and buildingcommunity for team members with a shared characteristic or interest.The current ERG programs include:Upland Women in Tech:O

133、ur mission is to foster an inclusive equitable professional community for women at Upland by providingcollaboration,resources,mentorship,and professional opportunities and development.Upland International:Our mission is to build a unified global community for Uplanders and customers by empowering al

134、l to feel respected,visible,and heard.Upland Pride:Our mission is to create and foster a space for LGBTQIA+employees and allies to feel included,empowered,andrecognized.We seek to improve company policies,trainings,and culture through education,resources,and communication across Upland.Development a

135、nd Promotion of Leaders.Our high annual growth provides consistent promotion opportunities for our team members.We providecareer ladders and development resources for all of our key functions.We provide leadership training for our managers.In addition,team membersthat join us through regular acquisi

136、tions have access to career development and promotion opportunities that would not have been available at theirsmaller companies.Creating a Culture of Customer Value and Improvement.Delivering customer value is core to our mission.Our UplandOne operating processes focuson quantifying customer satisf

137、action through NPS surveys,maintaining customer-driven software roadmaps,and empowering our team members toleverage expert resources from across the company to drive business success for our customers.Available InformationWe were incorporated in Delaware in 2010.Our principal executive offices are l

138、ocated at 401 Congress Avenue,Suite 1850,Austin,TX 78701.Our maintelephone number is(512)960-1010.Our website address is .Information on our website is not part of this report and should not berelied upon in determining whether to make an investment decision.The inclusion of our website address in t

139、his report does not include or incorporate byreference into this report any information on our website.Our annual reports on Form 10-K,quarterly reports on Form 10-Q,current reports on Form 8-K and amendments to those reports filed or furnished pursuant toSection 13(a)or 15(d)of the Exchange Act,as

140、amended,are available free of charge through our website as soon as reasonably practicable after they areelectronically filed with or furnished to the United States Securities and Exchange Commission(the“SEC”).Additionally,the SEC maintains an internet sitethat contains reports,proxy,information sta

141、tements,and other information.The address of the SECs website is www.sec.gov.10Item 1A.Risk FactorsRisk Factor SummaryOur business is subject to numerous risks.You should carefully consider the following risks,as well as general economic and business risks,and all of the otherinformation contained i

142、n this Annual Report,together with any other documents we file with the SEC.Any of the following risks could have a material adverseeffect on our business,operating results and financial condition and cause the trading price of our common stock to decline.Among these important risks arethe following

143、:Risks Related to Our BusinessWe have made,and expect to continue to make,acquisitions as a primary component of our growth strategy.We may not be able to identify suitableacquisition candidates or consummate acquisitions on acceptable terms,or we may be unable to successfully integrate acquisitions

144、,which could disruptour operations and adversely impact our business and operating results.We face various risks associated with operating as a multinational corporation and our growth depends on our ability to retain existing customers andsecure additional subscriptions and cross-sell opportunities

145、 from existing customers.Failure to maintain,expand and enhance our sales organization may negatively impact our revenue growth.We depend on our senior management team and the loss of one or more key personnel,or an inability to attract and retain highly skilled personnel mayimpair our ability to gr

146、ow our business.Because we generally recognize revenue from our customers over the terms of their agreements,downturns or upturns in our business may not beimmediately reflected in our operating results.We face various risks associated with operating as a multinational corporation and our growth and

147、 long-term success depends,in part,on our ability toexpand our international sales and operations.Our sales cycles can be lengthy and variable,which may cause changes in our operating results.The failure to timely and accurately implement AI,and other new technologies,successfully in our product off

148、erings could have a material adverseeffect on our business,competitive position,results of operations,financial condition and prospects,and also result in reputational harm or liability.Perpetual license revenue is unpredictable,and a material increase or decrease in perpetual license revenue from p

149、eriod to period can produce substantialvariation in the total revenue and earnings we recognize in a given period.We may be forced to change the prices we charge for our applications or the pricing models upon which they are based.Any disruption of service at the data centers that house our equipmen

150、t and deliver our applications or with our hosting service provider could harm ourbusiness.Actual or perceived security vulnerabilities in our solutions and services or cyberattacks on our networks could have a material adverse impact on ourbusiness,results of operations and financial condition.Our

151、success depends on our ability to adapt to technological change and continue to innovate.If our applications contain serious errors or defects,we may lose revenue and market acceptance,and we may incur costs to defend or settle product-related claims.If we fail to integrate our applications with oth

152、er software applications and competitive or adjacent offerings that are developed by others,or fail to makeour applications available on mobile and other handheld devices,our applications may become less marketable,less competitive or obsolete,and ouroperating results could be harmed.Our use of open

153、 source software could negatively affect the performance of our applications and our ability to sell our applications and subject us topossible litigation.Certain of our operating results and financial metrics are difficult to predict as a result of seasonality.We could incur substantial costs as a

154、result of any claim of infringement of another partys intellectual property rights.We could incur substantial costs in protecting our intellectual property from infringement,and any failure to protect our intellectual property couldimpair our business.11We rely on third-party software that is requir

155、ed for the development and deployment of our applications,which may be difficult to obtain or which couldcause errors or failures of our applications.Market RisksThe markets in which we participate are intensely competitive,and if we do not compete effectively,our operating results could be adversel

156、y affected.Mergers of,or other strategic transactions by,our competitors could weaken our competitive position or reduce our revenue.Our quarterly operating results may fluctuate in the future.As a result,we may fail to meet or exceed the expectations of research analysts or investors,which could ca

157、use our stock price to decline,and you may lose part or all of your investment.Financial RisksWe may need financing in the future,and any additional financing may result in restrictions on our operations or substantial dilution to our stockholders.We may seek to renegotiate or refinance our loan fac

158、ility,and we may be unable to do so on acceptable terms or at all.Our variable rate indebtedness subjects us to interest rate risk,which could cause our debt service obligations to increase significantly.Our loan facility contains operating and financial covenants that may restrict our business and

159、financing activities.Fluctuations in the exchange rate of foreign currencies could result in losses on currency transactions.If we are unable to implement and maintain effective internal controls over financial reporting in the future,investors may lose confidence in theaccuracy and completeness of

160、our financial reports,and the market price of our common stock may be negatively affected.Our ability to use our net operating loss carryforwards and certain other tax attributes may be limited.We may be required to record charges to future earnings if our Goodwill or Intangible Assets become impair

161、ed.We may be adversely affected by the effects of inflation.Legal and Regulatory RisksUnanticipated challenges by tax authorities could harm our future results.Taxing authorities may successfully assert that we should have collected or,in the future,should collect additional sales and use taxes,and

162、we could besubject to liability with respect to past or future sales,which could adversely affect our results of operations.Our operating results could be adversely affected by an increase in our effective tax rate as a result of U.S.and foreign tax law changes,outcomes ofcurrent or future tax exami

163、nations,or by material differences between our forecasted and actual effective tax rates.Tax laws,regulations,and compliance practices are evolving and may have a material adverse effect on our results of operations,cash flows andfinancial position.Taxing authorities could reallocate our taxable inc

164、ome among our subsidiaries,which could increase our consolidated tax liability.New laws and increasing levels of regulation in the areas of privacy and protection of user data could harm our business.Any failure to comply with governmental export and import control laws and regulations could adverse

165、ly affect our business.Risks Related to Ownership of Our Common StockIf securities or industry analysts do not publish,or cease publishing,research or reports about us,our business or our market,if they publish negativeevaluations of our stock,or if we fail to meet the expectations of analysts,the p

166、rice of our stock and trading volume could decline.12Because we do not expect to pay any dividends on our common stock for the foreseeable future,our investors may never receive a return on theirinvestment.Anti-takeover provisions in our amended and restated certificate of incorporation and our amen

167、ded and restated bylaws,as well as provisions ofDelaware law,might discourage,delay or prevent a change in control of our company or changes in our board of directors or management and,therefore,depress the trading price of our common stock.Pursuant to the terms of the Purchase Agreement(as defined

168、herein),we have issued shares of our Series A Preferred Stock that ranks senior to ourcommon stock in priority of distribution rights and rights upon our liquidation,dissolution or winding up and has additional corporate governance rights.The fundamental change redemption feature of our Series A Pre

169、ferred Stock may make it more difficult for a party to take over our company ordiscourage a party from taking over our company.Our Board has adopted a Tax Benefit Preservation Plan,which may not protect the future availability of the Companys tax assets in all circumstancesand which could delay or d

170、iscourage takeover attempts that some shareholders may consider favorable.We cannot guarantee that our stock repurchase program will be fully implemented or that it will enhance long-term stockholder value.General RisksAn epidemic,pandemic or contagious disease and measures intended to prevent the s

171、pread of such an event could adversely affect our business,resultsof operations and financial condition.Adverse economic conditions may reduce our customers ability to spend money on information technology or software,or our customers mayotherwise choose to reduce their spending on information techn

172、ology or software,which may adversely impact our business.The market price of our common stock may be volatile,which could result in substantial losses for investors.Risks Related to Our BusinessWe have made,and expect to continue to make,acquisitions as a primary component of our growth strategy.We

173、 may not be able to identify suitableacquisition candidates or consummate acquisitions on acceptable terms,or we may be unable to successfully integrate acquisitions,which could disruptour operations and adversely impact our business and operating results.A primary component of our growth strategy h

174、as been to acquire complementary businesses to grow our company.We have completed 31 acquisitions in the 12years ending December 31,2023.We intend to continue to pursue acquisitions of complementary technologies,products,and businesses as a primarycomponent of our growth strategy to enhance the feat

175、ures and functionality of our applications,expand our customer base,provide access to new markets,andincrease benefits of scale.Acquisitions involve certain known and unknown risks that could cause our actual growth or operating results to differ from ourexpectations.Generally,our acquisition activi

176、ty presents three areas of risk to our business,risks related to:identifying the correct candidates for acquisition,completing the acquisition of identified targets,and integrating acquired companies following closing of the acquisition.Acquisition Candidate IdentificationAs we seek to find the best

177、 candidates for acquisition:we may not be able to identify suitable acquisition candidates or to consummate acquisitions on acceptable terms;we may pursue international acquisitions,which inherently pose more risks than domestic acquisitions;we compete with others to acquire complementary products,t

178、echnologies,and businesses,which may result in decreased availability of,orincreased price for,suitable acquisition candidates;we may not be able to obtain the necessary financing,on favorable terms,including as a result of rising interest rates,or at all,to finance any orall of our potential acquis

179、itions;we may ultimately fail to consummate an acquisition even if we announce that we plan to acquire a technology,product,or business;and13acquired technologies,products,or businesses may not perform as we expect,and we may fail to realize anticipated revenue and profits.In addition,our acquisitio

180、n strategy may divert managements attention away from our existing business,resulting in the loss of key customers or employees,and expose us to unanticipated problems or legal liabilities,including responsibility as a successor for undisclosed or contingent liabilities of acquiredbusinesses or asse

181、ts.Consummation of Targeted AcquisitionsIf we fail to adequately conduct due diligence on our potential targets effectively,we may not identify problems at target companies or fail to recognizeincompatibilities or other obstacles to successful integration.Additionally,the consummation of acquisition

182、 transactions involves the coordination of multiplepersonnel within Upland and at the third party partners that assist our acquisition strategy.If we are unable to properly coordinate amongst these groups andindividuals,our ability to effectively manage our acquisition activity may be compromised.Fu

183、rther,in the course of acquiring companies,we may:issue common stock that would dilute our current stockholders ownership percentage;use a substantial portion of our cash resources;increase our interest expense,leverage,and debt service requirements if we incur additional debt to pay for an acquisit

184、ion;assume liabilities for which we do not have indemnification from the former owners;further,indemnification obligations may be subject todispute or concerns regarding the creditworthiness of the former owners;record goodwill and non-amortizable intangible assets that are subject to impairment tes

185、ting and potential impairment charges;experience volatility in earnings due to changes in contingent consideration related to acquisition earnout liability estimates;incur amortization expenses related to certain intangible assets;lose existing or potential contracts as a result of conflict of inter

186、est issues;become subject to adverse tax consequences or deferred compensation charges;incur large and immediate write-offs;orbecome subject to litigation.Integration of Acquired CompaniesOur inability to successfully integrate future acquisitions could impede us from realizing all of the benefits o

187、f those acquisitions and could severely weaken ourbusiness operations.The integration process may disrupt our business and,if new technologies,products,or businesses are not implemented effectively,maypreclude the realization of the full benefits expected by us and could harm our results or operatio

188、ns.In addition,the overall integration of new technologies,products,or businesses may result in unanticipated problems,expenses,liabilities,and competitive responses.The difficulties of integrating an acquisitioninclude,among other things:issues in integrating the target companys technologies,produc

189、ts,or businesses with ours;incompatibility of marketing and administration methods;maintaining employee morale and retaining key employees;integrating the cultures of both companies;preserving important strategic customer relationships;consolidating corporate and administrative infrastructures and e

190、liminating duplicative operations;andcoordinating and integrating geographically separate organizations.In addition,even if the operations of an acquisition are integrated successfully,we may not realize the full benefits of the acquisition,including the synergies,cost savings,or growth opportunitie

191、s that we expect.These benefits may not be achieved within the anticipated time frame,or at all.14We face various risks associated with operating as a multinational corporation and our growth depends on our ability to retain existing customers andsecure additional subscriptions and cross-sell opport

192、unities from existing customers.In order to improve our operating results,it is important that our customers renew or upgrade their agreements with us when the applicable contract termexpires,and also purchase additional applications from us.Typically contract terms are one to three years for subscr

193、iption agreements.Upon expiration,customers can renew their existing subscriptions,upgrade their subscriptions to add more seats or additional minimum contracted volume,downgrade theirsubscriptions to fewer seats or lower minimum contracted volume,or not renew.A renewal constitutes renewing an exist

194、ing contract for an application underthe same terms,and an upgrade includes purchasing additional seats or volume under an existing contract.We may also cross-sell additional applications toexisting customers.Our ability to grow revenue and achieve profitability depends,in part,on customer renewals,

195、customer upgrades,and cross-sales to existingcustomers exceeding downgrades and non-renewals.However,we may not be able to increase our penetration within our existing customer base as anticipated,and we may not otherwise retain subscriptions from existing customers.Failure to maintain,expand and en

196、hance our sales organization may negatively impact our revenue growth.We sell our applications primarily through a direct sales organization comprised of inside sales and field sales personnel.In addition,we have an indirect salesorganization,which sells to distributors and value-added resellers.Gro

197、wing sales to both new and existing customers is,in part,dependent on our ability tomaintain,expand and enhance our sales force.Identifying,recruiting and training additional sales personnel requires significant time,expense,and attention.Itcan take several quarters or longer before our sales repres

198、entatives are fully-trained and productive.Our business may be adversely affected if our efforts toexpand and train our sales organization do not generate a corresponding increase in revenue.In particular,if we are unable to hire,develop,and retain salespersonnel,or if our new sales personnel are un

199、able to achieve expected sales productivity levels in a reasonable period of time or at all,our revenue may growmore slowly than expected or decline and our business may be harmed.We depend on our senior management team and the loss of one or more key personnel,or an inability to attract and retain

200、highly skilled personnel mayimpair our ability to grow our business.Our success depends,in part,upon the continued service of our key executive officers,as well as other key personnel.The employment agreements with ourexecutive officers and other key personnel do not require them to continue to work

201、 for us for any specified period;therefore,they may terminate employmentwith us at any time with no advance notice.The replacement of our senior management team or other key personnel likely would involve significant time andcosts,and the loss of these employees may significantly delay or prevent th

202、e achievement of our business objectives.We face intense competition for qualified individuals from numerous technology and software companies.If we fail to attract and retain suitably qualifiedindividuals,including software engineers and sales personnel,our ability to implement our business plan an

203、d develop and maintain our applications could beadversely affected.As a result,our ability to compete would decrease,our operating results would suffer,and our revenue would decrease.Because we generally recognize revenue from our customers over the terms of their agreements,downturns or upturns in

204、our business may not beimmediately reflected in our operating results.We recognize revenue from customer agreements over the terms of these agreements.As a result,a significant portion of the revenue we report in each quarteris generated from customer agreements entered into during previous periods,

205、which is reflected as deferred revenue on our balance sheet.Consequently,adecline in new or renewed agreements,or a downgrade of renewed agreements to fewer seats or less minimum contracted volume,in any one quarter may notbe fully reflected in our revenue in that quarter.Such a decline,however,will

206、 negatively affect our revenue in future quarters.Accordingly,the effect ofsignificant downturns in sales and market acceptance of our applications,and potential changes in our pricing policies or rates of renewals,may not be fullyreflected in our results of operations until future periods.Similarly

207、,it would be difficult for us to rapidly increase our revenue through new sales,renewals,andupgrades of existing customer agreements,or through additional cross-selling opportunities,in a given period due to the timing of revenue recognition inherentin our subscription model.We face various risks as

208、sociated with operating as a multinational corporation and our growth and long-term success depends,in part,on our ability toexpand our international sales and operations.As our operations have expanded,we have established and currently maintain offices in the United States,Australia,Canada,France,G

209、ermany,India,Ireland,Israel,Malaysia,Netherlands,Romania and the United Kingdom.For the year ended December 31,2023,we generated approximately 30%of our totalrevenue from customers outside of the U.S.As a result,we are subject to a number of risks,including:inflation and actions taken by central ban

210、ks to counter inflation;15foreign currency fluctuations and controls;international and regional economic,political and labor conditions,including any instability or security concerns abroad,such as uncertaintycaused by economic sanctions,trade disputes,armed conflicts and wars,including the Russia-U

211、kraine and Israeli-Hamas wars;tax laws(including U.S.taxes on foreign subsidiaries);increased financial accounting and reporting burdens and complexities;changes in,or impositions of,legislative or regulatory requirements;changes in laws governing the free flow of data across international borders;f

212、ailure of laws to protect our intellectual property rights adequately;inadequate local infrastructure and difficulties in managing and staffing international operations;delays resulting from difficulty in obtaining export licenses for certain technology,tariffs,quotas and other trade barriers;the im

213、position of governmental economic sanctions on countries in which we do business or where we plan to expand our business;costs and delays associated with developing products in multiple languages;operating in locations with a higher incidence of corruption and fraudulent business practices;andother

214、factors beyond our control,such as terrorism,war,natural disasters,climate change and pandemics and resulting restrictions on businessactivity,which may vary significantly by region.Some of our third-party business partners have international operations and are also subject to these risks,and our bu

215、siness may be harmed if such partners areunable to appropriately manage these risks.If sales to any of our customers outside of the Americas are reduced,delayed or canceled because of any of theabove factors,our revenue may decline.We have limited experience in operating in certain foreign jurisdict

216、ions and expect to continue to expand our relationship with international customers.Managing a global organization is difficult,time-consuming and expensive.Because of our limited experiences with international operations,any internationalefforts that we may undertake may not be successful in creati

217、ng demand for our applications outside of the U.S.or in effectively selling subscriptions to ourcloud offerings in all of the international markets that we enter.Our sales cycles can be lengthy and variable,which may cause changes in our operating results.Our sales cycle can vary substantially from

218、customer to customer.A number of factors influence the length and variability of our sales cycles,including,forexample:the need to educate potential customers about the uses and benefits of our applications;the duration of the commitment customers make in their agreements with us,which are typically

219、 one to three years;the discretionary nature of potential customers purchasing and budget cycles and decisions;the competitive nature of potential customers evaluation and purchasing processes;the functionality demands of potential customers;fluctuations in the software needs of potential customers;

220、the announcement or planned introduction of new products by us or our competitors;andthe purchasing approval processes of potential customers.Our sales cycles can make it difficult to predict the quarter in which revenue from a new customer may first be recognized.We may incur significant sales andm

221、arketing expenses and invest significant time and effort in anticipation of a sale that may never occur or only occur in a smaller amount or at a later date thananticipated.Delays inherent to our sales cycles could cause significant variability in our revenue and operating results for any particular

222、 period.16The failure to timely and accurately implement Artificial Intelligence(“AI”),and other new technologies,successfully in our product offerings could havea material adverse effect on our business,competitive position,results of operations,financial condition and prospects,and also result in

223、reputationalharm or liability.We currently incorporate AI capabilities into certain of our offerings,and our research into and continued development of,such capabilities remain ongoing.Aswith many innovations,AI presents risks,challenges,and potential unintended consequences that could affect its ad

224、option,and therefore our business.Manygenerative AI solutions and implementations rely on third-parties,where ineffective or inadequate AI development or deployment practices by us or otherscould result in incidents that impair the acceptance of AI solutions or cause harm to our customers,individual

225、s or society.These deficiencies and other failuresof AI systems could subject us to competitive harm,regulatory action,legal liability,and brand or reputational harm.If we enable or offer AI solutions thatresult in(i)potential bias or inaccuracy,or(ii)a negative impact on human rights,privacy,employ

226、ment,or other social,economic,or political issues,we mayexperience competitive,brand,or reputational harm or legal and/or regulatory action.However,failing to successfully adopt new technologies,including generative AI,may result in product offerings that are either unreliable or noncompetitive.If w

227、e are unable to develop and commercialize product offerings that are compatible with new technologies or competitors are successful in developingcompatible technologies more quickly or efficiently than we can,our business,competitive position,results of operations,financial condition and prospectsma

228、y be materially and adversely affected.Additionally,leveraging AI capabilities to potentially improve internal functions and operations presents further risksand challenges.While we aim to use AI ethically and attempt to identify and mitigate ethical or legal issues presented by its use,we may be un

229、successful inidentifying or resolving issues before they arise.The use of AI in our products and to support business operations carries inherent risks related to data privacyand security,such as intended,unintended,or inadvertent transmission of proprietary or sensitive information.Further,dependenc

230、e on AI without adequatesafeguards to make certain business decisions may introduce additional operational vulnerabilities by impacting our relationships with customers,partners,andsuppliers;by producing inaccurate outcomes based on flaws in the underlying data;or other unintended results.Further,in

231、corporating AI may increase IP,cybersecurity,operational,data protection and technological risks and result in new or enhanced governmental orregulatory scrutiny,litigation,ethical concerns,or other complications that could materially and adversely affect our business,as AI is an emerging technology

232、for which the legal and regulatory landscape is not fully developed(including potential liability for breaching intellectual property or privacy rights or laws).As a result of the complexity and rapid development of new technologies,it is not possible to predict all of the legal,operational or techn

233、ological risks relatedto use of such technologies.Furthermore,new technologies,such as AI,are the subject of evolving review by various governmental and regulatory bodies andagencies,and changes in laws,rules,directives and regulations governing the use of such technologies may adversely affect the

234、ability of our business todevelop and use such technologies.Perpetual license revenue is unpredictable,and a material increase or decrease in perpetual license revenue from period to period can produce substantialvariation in the total revenue and earnings we recognize in a given period.Perpetual li

235、cense revenue reflects the revenue recognized from sales of perpetual licenses relating to our workflow automation and enterprise contentmanagement applications to new customers and additional licenses for such applications to existing customers.We generally recognize the license fee portionof the a

236、rrangement at the time of delivery.Perpetual licenses of our workflow automation and enterprise content management applications are sold throughthird-party resellers,and as such,the timing of sales of perpetual licenses is difficult to predict with the timing of recognition of associated revenueunpr

237、edictable.A material increase or decrease in the sale of perpetual licenses from period to period could produce substantial variation in the revenue werecognize.Accordingly,comparing our perpetual license revenue on a period to period basis may not be a meaningful indicator of a trend or future resu

238、lts.We may be forced to change the prices we charge for our applications or the pricing models upon which they are based.As the markets for our applications mature,or as competitors introduce products or services that compete with ours,including bundling competing offeringswith additional products o

239、r services,we may be unable to attract new customers at the same price or based on the same pricing models as we have usedhistorically.As a result,in the future we may be required to reduce our prices,which could adversely affect our financial performance.In addition,we mayoffer volume price discoun

240、ts based on the number of seats purchased by a customer or the number of our applications purchased by a customer,which wouldeffectively reduce the prices we charge for our applications.Also,we may be unable to renew existing customer agreements or enter into new customeragreements at the same price

241、s or upon the same terms that we have historically,which could have a material adverse effect on our financial position.17Any disruption of service at the data centers that house our equipment and deliver our applications or with our hosting service providers could harm ourbusiness.Our reputation an

242、d ability to attract,retain,and serve our customer is dependent upon the reliable performance of our computer systems and those of thirdparties that we utilize in our operations.These systems may be subject to damage or interruption from earthquakes,adverse weather conditions,other naturaldisasters,

243、terrorist attacks,power loss,telecommunications failures,vendor limitations,computer viruses,computer denial of service attacks,or other attemptsto harm these systems.Supply chain disruptions stemming from the Russia-Ukraine or Israeli-Hamas wars may harm our customers and suppliers and furthercompl

244、icate existing supply chain constraints.Interruptions in these systems,or with the Internet in general,could make our service unavailable or degraded orotherwise hinder our ability to deliver application data to our customers.Service interruptions,errors in our software,or the unavailability of comp

245、uter systemsused in our operations could diminish the overall attractiveness of our applications to existing and potential customers.Our servers and those of third parties we use in our operations are vulnerable to computer viruses,physical or electronic break-ins,and similar disruptions.Wehave impl

246、emented security protocols within our applications;however,we have no assurance that our systems are completely secure.Our insurance does notcover expenses related to disruptions to our service or unauthorized access to our applications.Any significant disruption to our service or access to oursyste

247、ms could result in a loss of customers and adversely affect our business and results of operation.We primarily utilize communications and computer hardware systems operated by third-party Web hosting providers.In addition,we utilize third-party hostingservices in connection with our business operati

248、ons and have migrated most of our applications to third-party hosting platforms.Problems faced by us or ourthird-party hosting providers,including technological or business-related disruptions,could adversely impact the experience of our customers.Actual or perceived security vulnerabilities in our

249、solutions and services or cyberattacks on our networks could have a material adverse impact on ourbusiness,results of operations and financial condition.Our applications involve the storage and transmission of our customers proprietary and confidential information,including personal or identifying i

250、nformationregarding their employees and customers and are subject to attempted cyberattacks.Any security breaches,unauthorized access,unauthorized usage,virus,orsimilar breach or disruption could result in loss of confidential information,damage to our reputation,early termination of our contracts,l

251、itigation,regulatoryinvestigations,indemnity obligations,or other liabilities.If our security measures or those of our third-party software providers and data centers are breachedas a result of third-party action,employee error,malfeasance or otherwise,resulting in unauthorized access to customer da

252、ta,our reputation will be damaged,our business may suffer,and we could incur significant liability.Unauthorized parties may attempt to misappropriate or compromise our confidentialinformation or that of third parties,create system disruptions,product or service vulnerabilities or cause shutdowns.The

253、se perpetrators of cyberattacks alsomay be able to develop and deploy viruses,worms,malware and other malicious software programs that directly or indirectly attack our products,services orinfrastructure(including our third party cloud service providers).Because the techniques used to obtain unautho

254、rized access or sabotage systems changefrequently and generally are not identified until they are launched against a target,we may be unable to anticipate these techniques or to implement adequatepreventative measures.Any or all of these issues could negatively affect our ability to attract new cust

255、omers,cause existing customers to elect not to renew orupgrade their subscriptions,result in reputational damage,or subject us to third-party lawsuits,regulatory fines,or other action or liability,which couldadversely affect our operating results.In addition,to the extent we are diverting our resour

256、ces to address and mitigate these vulnerabilities,it may hinder ourability to deliver and support our solutions and customers in a timely manner.Despite our efforts to build secure services,we can make no assurance that wewill be able to detect,prevent,timely and adequately address,or mitigate the n

257、egative effects of cyberattacks or other security breaches.Our success depends on our ability to adapt to technological change and continue to innovate.The overall market for software is rapidly evolving and subject to changing technology,shifting customer needs,and frequent introductions of newappl

258、ications,including without limitation AI in its multiple forms.Our ability to attract new customers and increase revenue from existing customers willdepend,in large part,on our ability to develop or acquire new applications and enhance and improve existing applications.To achieve market acceptance f

259、orour applications,we must effectively anticipate and offer applications that meet changing customer demands in a timely manner.Customers may requirefeatures and capabilities not offered by our current applications.We may experience difficulties that could delay or prevent our development,acquisitio

260、n,orimplementation of new applications and enhancements.If we are unable to successfully develop or acquire new software capabilities and functionality,enhance our existing applications to anticipate and meetcustomer preferences,sell our applications into new markets,or adapt to changing industry st

261、andards in software,our revenue and results of operations wouldbe adversely affected.18If our applications contain serious errors or defects,we may lose revenue and market acceptance,and we may incur costs to defend or settle product-related claims.Complex software applications such as ours often co

262、ntain errors or defects,particularly when first introduced or when new versions or enhancements arereleased.Our current and future applications may contain serious defects.The costs incurred in correcting any material errors or defects might be substantial and could adversely affect our operating re

263、sults.Although our customeragreements typically contain provisions designed to limit our exposure to certain of the claims above,existing or future laws or unfavorable judicial decisionscould negate these limitations.Even if not successful,a breach of warranty or other claim brought against us would

264、 likely be a distraction to management,time-consuming and costly to resolve,and could seriously damage our reputation in the marketplace,making it harder for us to sell our applications.Additionally,our errors and omissions insurance may be inadequate or may not be available in the future on accepta

265、ble terms,or at all,and our policy may notcover all claims made against us.Further,defending a suit,regardless of its merit,could be costly and divert managements attention.If we fail to integrate our applications with other software applications and competitive or adjacent offerings that are develo

266、ped by others,or fail to makeour applications available on mobile and other handheld devices,our applications may become less marketable,less competitive or obsolete,and ouroperating results could be harmed.Our applications integrate with a variety of other software applications,and also with compet

267、ing and adjacent third-party offerings.We need to continuouslymodify and enhance our platform to adapt to changes in cloud-enabled hardware,software,networking,browser and database technologies.Any failure of ourapplications to integrate effectively with other software applications and product offer

268、ings could reduce the demand for our applications or result in customerdissatisfaction and harm to our business.If we are unable to respond to changes in the applications and tools with which our applications integrate in a cost-effective manner,our applications may become less marketable,less compe

269、titive,or obsolete.Competitors may also impede our attempts to create integrationbetween our applications and competitive offerings,which may decrease demand for our applications.In addition,an increasing number of individuals withinorganizations are utilizing devices other than personal computers,s

270、uch as mobile phones,tablets and other handheld devices,to access the Internet andcorporate resources and to conduct business.If we cannot effectively make our applications available on these devices,we may experience difficulty attractingand retaining customers.Our use of open source software could

271、 negatively affect our ability to sell our applications and subject us to possible litigation.A portion of our applications incorporate open source software,and we expect to continue to incorporate open source software in the future.Few of the licensesapplicable to open source software have been int

272、erpreted by courts,and their application to the open source software integrated into our proprietary softwaremay be uncertain.Moreover,we cannot provide any assurance that we have not incorporated additional open source software in our applications in a mannerthat is inconsistent with the terms of t

273、he license or our current policies and procedures.If we fail to comply with these licenses,we may be subject to certainrequirements,including requirements that we offer our applications that incorporate the open source software for no cost,that we make available source codefor modifications or deriv

274、ative works we create based upon,incorporating or using the open source software,and that we license such modifications orderivative works under the terms of applicable open source licenses.If an author or other third party that distributes such open source software were to allegethat we had not com

275、plied with the conditions of one or more of these licenses,we could be required to incur significant legal expenses defending against suchallegations and could be subject to significant damages,enjoined from the sale of our applications that contained the open source software,and required tocomply w

276、ith the foregoing conditions,which could disrupt the distribution and sale of some of our applications.In addition,there have been claims challengingthe ownership of open source software against companies that incorporate open source software into their products.As a result,we could be subject to su

277、its byparties claiming infringement due to the reliance by our applications on certain open source software.Litigation could be costly for us to defend,have anegative effect on our operating results and financial condition,or require us to devote additional research and development resources to chan

278、ge ourapplications.Certain of our operating results and financial metrics are difficult to predict as a result of seasonality.We have historically experienced seasonality in terms of when we enter into customer agreements.We sign a significantly higher percentage of agreementswith new customers,and

279、renew agreements with existing customers,in the fourth quarter of each calendar year as our customers tend to follow budgetingcycles at the end of the calendar year.Our cash flow from operations has historically been higher in the first quarter of each calendar year than in otherquarters.This season

280、ality is reflected to a much lesser extent,and sometimes is not immediately apparent,in our revenue,due to the fact that we defer revenuerecognition.In addition,seasonality may be difficult to observe in our financial results during periods in which we acquire businesses,as such results typicallyare

281、 most significantly impacted by such acquisitions.We expect this seasonality19to continue,or possibly increase in the future,which may cause fluctuations in our operating results and financial metrics.If our quarterly operating results oroutlook fall below the expectations of research analysts or in

282、vestors,the price of our common stock could decline substantially.We could incur substantial costs as a result of any claim of infringement of another partys intellectual property rights.In recent years,there has been significant litigation involving patents and other intellectual property rights in

283、 our industry.Companies providing software areincreasingly bringing and becoming subject to suits alleging infringement of proprietary rights,particularly patent rights,and to the extent we gain greatermarket visibility,we face a higher risk of being the subject of intellectual property infringement

284、 claims.We do not have a significant patent portfolio,whichcould prevent us from deterring patent infringement claims through our own patent portfolio,and our competitors and others may now and in the future havesignificantly larger and more mature patent portfolios than we have.The risk of patent l

285、itigation has been amplified by the increase in the number of a type ofpatent holder,which we refer to as a non-practicing entity,whose sole business is to assert such claims and against whom our own intellectual propertyportfolio may provide little deterrent value.We could incur substantial costs i

286、n prosecuting or defending any intellectual property litigation and may not haveadequate insurance coverage for these types of actions.If we sue to enforce our rights or are sued by a third-party that claims that our applications infringe itsrights,the litigation could be expensive and could divert

287、our management resources.Moreover,our acquisition strategy could expose us to additional risk ofintellectual property litigation as we acquire new businesses with diverse software offerings and intellectual property assets.In addition,in most instances,we have agreed to indemnify our customers again

288、st claims that our applications infringe the intellectual property rights of thirdparties.Our business could be adversely affected by any significant disputes between us and our customers as to the applicability or scope of ourindemnification obligations to them.Any intellectual property litigation

289、to which we might become a party,or for which we are required to provideindemnification,may require us to do one or more of the following:cease selling or using applications that incorporate the intellectual property that we allegedly infringe;make substantial payments for legal fees,settlement paym

290、ents or other costs or damages;obtain a license,which may not be available on reasonable terms or at all,to sell or use the relevant technology;orredesign the allegedly infringing applications to avoid infringement,which could be costly,time-consuming or impossible.If we are required to make substan

291、tial payments or undertake any of the other actions noted above as a result of any intellectual property infringement claimsagainst us or any obligation to indemnify our customers for such claims,such payments or actions could harm our business.We could incur substantial costs in protecting our inte

292、llectual property from infringement,and any failure to protect our intellectual property could impairour business.Our success and ability to compete depend,in part,upon our intellectual property.We seek to protect the source code for our proprietary software and otherproprietary technology and infor

293、mation under a combination of copyright,trade secrets,and patent law,and we seek to protect our brands through trademarklaw.Our policy is to enter into confidentiality agreements,or agreements with confidentiality provisions,with our employees,consultants,vendors,andcustomers,and to control access t

294、o our software,documentation,and other proprietary information.Despite these precautions,it may be possible forunauthorized parties to copy our software or other proprietary technology or information,or to develop similar software independently.Despite our efforts to protect our proprietary rights,u

295、nauthorized parties may attempt to copy aspects of our applications or to obtain and use information thatwe regard as proprietary.Policing unauthorized use of our applications is difficult,and we are unable to determine the extent to which piracy of our softwareexists or will occur in the future.Lit

296、igation may be necessary in the future to enforce our intellectual property rights,protect our trade secrets,determine thevalidity and scope of the proprietary rights of others,or defend against claims of infringement or invalidity.Such litigation could be costly,time-consuming,and distracting to ma

297、nagement,result in a diversion of resources or the narrowing or invalidation of portions of our intellectual property,and have a materialadverse effect on our business,operating results,and financial condition.Furthermore,our efforts to enforce our intellectual property rights may be met withdefense

298、s,counterclaims,and countersuits attacking the validity and enforceability of our intellectual property rights or alleging that we infringe thecounterclaimants own intellectual property.These steps may be inadequate to protect our intellectual property.Third parties may challenge the validity orowne

299、rship of our intellectual property,and these challenges could cause us to lose our rights,in whole or in part,to such intellectual property or narrow itsscope such that it no longer provides meaningful protection.We will not be able to20protect our intellectual property if we are unable to enforce o

300、ur rights or if we do not detect unauthorized use of our intellectual property.Despite ourprecautions,it may be possible for unauthorized third parties to copy our products and use information that we regard as proprietary to create products andservices that compete with ours.Some license provisions

301、 protecting against unauthorized use,copying,transfer,and disclosure of our applications may beunenforceable under the laws of certain jurisdictions and foreign countries.Further,the laws of some countries do not protect proprietary rights to the sameextent as the laws of the United States.To the ex

302、tent we expand our international activities,our exposure to unauthorized copying,transfer,and use of ourapplications and proprietary technology or information may increase.There can be no assurance that our means of protecting our proprietary rights will be adequate or that our competitors will not

303、independently develop similartechnology.If we fail to meaningfully protect our intellectual property,our business,brands,operating results and financial condition could be materiallyharmed.We rely on third-party software that is required for the development and deployment of our applications,which m

304、ay be difficult to obtain or which couldcause errors or failures of our applications.We rely on software licensed from or hosted by third parties to offer our applications.In addition,we may need to obtain licenses from third parties to useintellectual property associated with the development of our

305、 applications,which might not be available to us on acceptable terms,or at all.Any loss of the rightto use any software required for the development,maintenance,and delivery of our applications could result in delays in the provision of our applications untilequivalent technology is either developed

306、 by us or,if available,is identified,obtained and integrated,which could harm our business.Any errors or defects inthird-party software could result in errors or a failure of our applications,which could harm our business.Market RisksThe markets in which we participate are intensely competitive,and

307、if we do not compete effectively,our operating results could be adversely affected.The overall market for software is rapidly evolving and subject to changing technology,shifting customer needs and frequent introductions of new applications.The intensity and nature of our competition varies signific

308、antly across our family of software applications.Many of our competitors and potential competitorsare larger and have greater brand name recognition,longer operating histories,larger marketing budgets,and significantly greater resources than we do.Someof our smaller competitors may offer application

309、s on a stand-alone basis at a lower price than our price due to lower overhead or other factors,while some ofour larger competitors may offer applications at a lower price in an attempt to cross-sell additional products in the future or retain a customer using a differentapplication.We believe there

310、 are a limited number of direct competitors that provide a comprehensive software offering.However,we face competition both from pointsolution providers,including legacy on-premise enterprise systems,and other cloud-based work management software vendors that may address one or more ofthe functional

311、 elements of our applications,but are not designed to address a broad range of software needs.In addition,we face competition from manualprocesses and traditional tools,such as paper-based techniques,spreadsheets,and email.If our competitors products,service,or technologies become more accepted than

312、 our software applications,if they are successful in bringing their products orservices to market earlier than ours,or if their products or services are more technologically capable than ours,our revenues could be adversely affected.Mergers of,or other strategic transactions by,our competitors could

313、 weaken our competitive position or reduce our revenue.If one or more of our competitors were to merge or partner with another of our competitors,the change in the competitive landscape could adversely affect ourability to compete effectively.In order to take advantage of customer demand for cloud-b

314、ased software applications,vendors of legacy systems are expandingtheir cloud-based software applications through acquisitions and internal development.A potential result of such expansion is that certain of our current orpotential competitors may be acquired by third parties with greater available

315、resources and the ability to further invest in product improvements and initiate orwithstand substantial price competition.Our competitors also may establish or strengthen cooperative relationships with our current or future value-addedresellers,third-party consulting firms or other parties with who

316、m we have relationships,thereby limiting our ability to promote our applications.Disruptions inour business caused by these events could reduce our revenue.21Our quarterly operating results may fluctuate in the future.As a result,we may fail to meet or exceed the expectations of research analysts or

317、 investors,which could cause our stock price to decline,and you may lose part or all of your investment.Our quarterly operating results may fluctuate as a result of a variety of factors,many of which are outside of our control.Accordingly,the results of any onequarter may not fully reflect the under

318、lying performance of our business and should not be relied upon as an indication of future performance.If our quarterlyoperating results or outlook fall below the expectations of research analysts or investors,the price of our common stock could decline substantially.Financial RisksWe may need finan

319、cing in the future,and any additional financing may result in restrictions on our operations or substantial dilution to our stockholders.We may seek to renegotiate or refinance our loan facility,and we may be unable to do so on acceptable terms or at all.We have funded our operations since inception

320、 primarily through equity financings,cash from operations,and cash available under our loan facility.We mayneed to raise funds in the future,for example,to expand our business,acquire complementary businesses,develop new technologies,respond to competitivepressures,or react to unanticipated situatio

321、ns.We may try to raise additional funds through public or private financings,strategic relationships,or otherarrangements.Our ability to obtain debt or equity funding will depend on a number of factors,including market conditions,our operating performance,andinvestor interest.In addition,under the t

322、erms of our Series A Preferred Stock,holders of our Series A Preferred Stock have certain approval rights overadditional financings.Additional funding may not be available to us on acceptable terms or at all.If adequate funds are not available,we may be required toreduce expenditures,including curta

323、iling our growth strategies,reducing our product-development efforts,or foregoing acquisitions.If we succeed in raisingadditional funds through the issuance of equity or convertible securities,it could result in substantial dilution to existing stockholders.If we raise additionalfunds through the is

324、suance of debt securities or preferred stock,these new securities would have rights,preferences,and privileges senior to those of theholders of our common stock.In addition,any debt financing obtained by us in the future or issuance of preferred stock could involve restrictive covenantsrelating to o

325、ur capital raising activities and other financial and operational matters,which may make it more difficult for us to obtain additional capital and topursue business opportunities,including potential acquisitions.For example,our Series A Preferred Stock contains a number of restrictive covenants.See

326、Risks Related to Our Common Stock.”Additionally,we may need to renegotiate the terms of our loan facility,and our lender may be unwilling to do so,or mayagree to such changes subject to additional restrictive covenants on our operations and ability to raise capital.Our variable rate indebtedness sub

327、jects us to interest rate risk,which could cause our debt service obligations and interest expense to increase significantly.At December 31,2023,the total outstanding indebtedness under our Credit Facility(as defined herein)was$482.1 million.Interest rates may remain at existing levels or may furthe

328、r increase in the near term which could cause our debt service obligations and interest expense toincrease even though the amount borrowed remains the same,and our net income and cash flows,including cash available for servicing our indebtedness,could correspondingly decrease.We have floating-to-fix

329、ed interest rate swap agreements in order to reduce interest rate volatility in connection with$258.5 million of the outstanding term debton our Credit Facility,but$223.5 million of our outstanding term debt and all our$60.0 million Revolver(as defined herein),which remains undrawn,are notcurrently

330、subject to any interest rate instruments.Our Credit Facility contains operating and financial covenants that may restrict our business and financing activities.Our obligations under our Credit Facility are secured by a security interest in substantially all of our assets and assets of the co-borrowe

331、rs and of anyguarantors,including intellectual property.The terms of the Credit Facility limit,among other things,our ability toIncur additional indebtedness or guarantee indebtedness of others;Create liens on their assets;Make investments,including certain acquisitions;Enter into mergers or consoli

332、dations;Dispose of assets;Pay dividends and make other distributions on the Companys capital stock,and redeem and repurchase the Companys capital stock;22Enter into transactions with affiliates;andPrepay indebtedness or make changes to certain agreements.Furthermore,the Credit Facility requires us a

333、nd our subsidiaries to comply with certain financial covenants if greater than 35%of revolving credit facility isdrawn.The operating and other restrictions and covenants in the Credit Facility,and in any future financing arrangements that we may enter into,may restrictour ability to finance our operations,engage in certain business activities,or expand or fully pursue our business strategies,or ot