Company: KARO
Filing Date: 2025-06-09
Form Type: 20-F
Source: 0001213900-25-052372
Chunk: 51

Company: Karooooo Ltd.
Filing Date: 2025-06-09
Form: 20-F
Item: Item 3
Chunk 51
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 substantial amounts that could have a material adverse effect on our financial condition and results of operations.

Even if we, or our businesses,
are successful in responding to challenges by taxing authorities, responding to such challenges may be expensive, consume time and other
resources, or divert management’s time and focus from our operations or businesses or from the operations of our businesses. Therefore,
a challenge as to our, or our businesses’, tax position or status or transactions, even if unsuccessful, may have a material adverse
effect on our business, financial condition, results of operations or liquidity of our businesses.

A breach of any of the
covenants or other provisions contained in funding facilities could result in an event of default, which could result in amounts outstanding
under these facilities becoming immediately due and payable as well as foreclosure by our lenders upon our critical assets.

Our wholly-owned subsidiary, Cartrack
(Pty) Ltd, entered into a short-term facility with Capitec Bank Limited and Purple Rain Properties No 444 Proprietary Limited, also a
wholly-owned subsidiary, entered into a mortgage bond in favor of First Rand Bank Limited and a short-term facility with The Standard
Bank of South Africa Limited. These facilities are more fully described under Item 5. B. “ Operating and Financial Review and Prospects
- Liquidity and Capital Resources - Loan and Funding Facilities.”

Similarly, Cartrack Portugal,
S. A., secured a EUR 2.0 million loan from Banco Comercial Português, S. A.

In the event that we enter into
a funding facility with any of our bankers, it is customary for obligations under such credit facility agreement to be guaranteed by one
or more of our significant subsidiaries and to be secured by a lien on bank accounts, cash and cash equivalent investments, intellectual
property, insurance policies, insurance proceeds and a pledge of the shares of certain of our subsidiaries incorporated in South Africa.
A breach of any of these covenants or other provisions of credit facilities could result in an event of default, which if not cured or
waived, could result in amounts outstanding under such credit facilities becoming immediately due and payable. In the event that some
or all of the amounts outstanding under such credit facilities are accelerated and become immediately due and payable, we may not have
the funds to repay, or the ability to refinance, such outstanding amounts under the credit facilities, or our lenders could foreclose
upon critical assets, which could have a material adverse effect on our business, results of operations and financial condition