Company: KARO
Filing Date: 2025-06-09
Form Type: 20-F
Source: 0001213900-25-052372
Chunk: 18

Company: Karooooo Ltd.
Filing Date: 2025-06-09
Form: 20-F
Item: Item 3
Chunk 18
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 Mobile Communications (“ GSM”), including Long-Term Evolution
(“ LTE”), module components of our hardware, semiconductors and other passive components from certain third-party suppliers,
and we also source other hardware and devices from third-party suppliers that integrate into our device agnostic SaaS platform. In addition,
we currently depend principally on certain third-party suppliers to supply and manufacture components of our hardware for our PC boards
and to manufacture our GSM, LTE and GNSS components. These modules and many of the other components used in the manufacture of our devices
have extended lead times on orders. We do not have contracts or volume commitments in place with our third-party suppliers but instead
place purchase orders on a periodic as-needed basis.

We have in the past experienced,
and may in the future experience, component shortages and the predictability of the availability of these components may be limited. For
example, we utilize semiconductor chips in certain of the hardware products that we manufacture. Over the last several financial years,
there was an ongoing global silicon component shortage, which resulted in increases in the cost of devices and components and delays in
shipments of goods across many industries, including components used in our Internet of Things (“ IoT”) devices. Although the
semiconductor chip supply crisis has been largely resolved, it still carries a degree of uncertainty.

Supply chain disruptions as a
result of port congestion with the challenges facing shipping routes and shippers having to explore alternative routes, jet fuel shortages
and air freight delays can impede supply chains, leading to depleted inventories and resulting in a backlog of merchandise stranded in
transit. Increases in the cost of devices or components, or freight to transport those items, could negatively impact our ability to fulfill
engineering design changes or customer demand, each of which could adversely impact our results of operations.

While our hardware is designed
such that components may be interchanged in case of supply disruptions or unavailability, any interruptions or delays in the supply of
components could require us to identify and integrate our manufacturing logistics with an alternate supplier or use a substitute component.
If the facilities of one of our contract manufacturers were to suffer a major business interruption event, it could take up to three months
or longer to replace production capacity. Interruption in the supply of components from our contract manufacturers could impair our production
capacity, and we may not have recourse against our suppliers through contractual representations, warranties, indemnification provisions
or otherwise, which could have a material adverse effect on our business, results of operations and financial condition.

These suppliers