Company: KARO
Filing Date: 2025-06-09
Form Type: 20-F
Source: 0001213900-25-052372
Chunk: 8

Company: Karooooo Ltd.
Filing Date: 2025-06-09
Form: 20-F
Item: Item 3
Chunk 8
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failure or increase in costs could impede our profitability and harm our financial results.

Two critical links in our current
solutions are between telematics devices and GPS or equivalent Global Navigation Satellite Systems (“ GNSS”) such as Glonass,
Galileo and Quasi-Zenith Satellite System (“ QZSS”) and between telematics devices and cellular networks, which allow us to
obtain location data and transmit it to our system. Increases in the fees charged by cellular carriers for data transmission or changes
in the cellular networks, such as a cellular carrier discontinuing support of the network currently used by our telematics devices, requiring
retrofitting of our telematics devices, could increase our costs and impact our profitability. We have initiated a process to migrate
new installations to the next generation of cellular network compatibility in order to maximize expected useful life of our telematics
devices, however, cellular carriers could in the future migrate allotted bandwidth from one network to another. Also, while we have included
the ability to store GPS data in our telematics devices in case of temporary cellular network connectivity failure, widespread disruptions
or extended failures of the cellular networks would materially and adversely affect our solutions’ functionality and utility and
harm our financial results.

GPS-equivalent services like
Glonass, Galileo and QZSS are satellite-based positioning systems consisting of a constellation of orbiting satellites. These satellites
and their ground support systems are complex electronic systems subject to electronic and mechanical failures and possible sabotage and
it is not certain that the various government agencies will remain committed to the operation and maintenance of such satellites over
a long period. In addition, technologies that rely on GPS or Glonass, Galileo and QZSS depend on the use of radio frequency bands and
any modification of the permitted uses of these bands may adversely affect the functionality of such satellites and, in turn, our solutions.

Many GPS satellites currently
in orbit have outlived their expected lifespans and are subject to damage by the hostile space environment in which they operate. If a
significant number of satellites were to become inoperable, there could be a substantial delay before they are replaced with new satellites.
A reduction in the number of operating satellites below the 24-satellite standard established for GPS may impair the utility of the GPS
system and the growth of current and additional market opportunities. In addition, natural phenomena such as solar storms, software updates
to GPS satellites and ground control segments, and infrequent