Company: KARO
Filing Date: 2025-06-09
Form Type: 20-F
Source: 0001213900-25-052372
Chunk: 64

Company: Karooooo Ltd.
Filing Date: 2025-06-09
Form: 20-F
Item: Item 3
Chunk 64
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” and we cannot be certain if the reduced disclosure requirements applicable to emerging growth companies will make
our ordinary shares less attractive to investors.

We are an “emerging growth
company,” as defined in the JOBS Act, and we intend to take advantage of certain exemptions from various reporting requirements
that are applicable to other public companies that are not “emerging growth companies” including, but not limited to, not
being required to comply with the auditor attestation requirements of Section 404(b) of SOX. We cannot predict if investors will find
our ordinary shares less attractive because we will rely on these exemptions. If some investors find our ordinary shares less attractive
as a result, there may be a less active trading market for our ordinary shares and our share price may be more volatile.

There can be no assurance
that we will not be a passive foreign investment company, or PFIC, for any taxable year, which could result in adverse U. S. federal income
tax consequences to U. S. investors in our ordinary shares.

In general, a non-U. S. corporation
is a PFIC for U. S. federal income tax purposes for any taxable year in which (i) 50% or more of the value of its assets (generally determined
based on the average of the quarterly values of its gross assets) consists of assets that produce, or are held for the production of,
passive income, or (ii) 75% or more of its gross income consists of passive income. For purposes of the above calculations, a non-U. S.
corporation that owns, directly or indirectly, at least 25% by value of the shares of another corporation is treated as if it held its
proportionate share of the assets of the other corporation and received directly its proportionate share of the income of the other corporation.
Passive income generally includes dividends, interest, certain rents and royalties and gains from the sale or exchange of investment property.
Cash is generally a passive asset for these purposes. Goodwill and other intangible assets are generally characterized as active assets
to the extent they are associated with business activities that produce active income.

Based on the composition of our
income and assets and the value of our assets, including the estimated value of our goodwill and other intangible assets, we believe that
we were not a PFIC for our taxable year ended February 28, 2025. However, our PFIC status for any taxable year is an annual factual determination
that can