Company: KARO
Filing Date: 2025-06-09
Form Type: 20-F
Source: 0001213900-25-052372
Chunk: 15

Company: Karooooo Ltd.
Filing Date: 2025-06-09
Form: 20-F
Item: Item 3
Chunk 15
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 customer, and an increase
in the default rates of our customers could have a material adverse effect on our business, results of operations and financial condition.

In addition, bank failures in
the United States and Europe have caused uncertainty across the global banking sector and financial markets. If other banks and financial
institutions wind down and liquidate, enter receivership or become insolvent in the future in response to financial conditions affecting
the banking system and financial markets, our customers and business partners may face difficulties accessing cash, cash equivalents or
financing, which would lead to an increase in default rates and could have an adverse effect on our business, results of operations and
financial condition.

We provide minimum service
level commitments to certain of our customers, and our failure to meet them could cause us to issue credits for future subscriptions,
which could harm our results of operations.

Certain of our subscription agreements
currently, and may in the future, provide minimum service level commitments regarding items such as unit and platform uptime, functionality,
platform performance or operational turnaround times. If we are unable to meet the stated service level commitments for these subscribers
or suffer extended periods of service unavailability, we are or may be contractually obligated to provide these subscribers with credits
for future subscriptions, or provide services at no cost, which could adversely impact our revenue.

Risks Relating to Our Reliance on Third Parties

The conduct of third-party
security officers engaged in stolen vehicle recovery (“ SVR”) operations in support of our services from time to time involves
the use of force, which could expose the Company to reputational harm or, potentially, civil and/or criminal liability.

We work with local law enforcement
authorities and licensed third party security officers to recover our customers’ stolen vehicles. These recovery teams are armed
and undergo training on recovery procedures including conflict management and the controlled use of force in response to threats, including
being the target of gunfire by vehicle theft suspects.

SVR operations in South Africa, which are provided in connection
with our services, are conducted under an arm’s length agreement by a third-party service provider, for which the agreement requires
the service provider to comply with local law and our policies and procedures related to SVR operations.

From March 1, 2020 through February
28, 2025, 0.029% of SVR operations conducted by our service provider have resulted in injury or death as a result of weapons discharge.
While in each of these incidents local law enforcement authorities determined that the security officers engaged in