Company: KARO
Filing Date: 2025-06-09
Form Type: 20-F
Source: 0001213900-25-052372
Chunk: 62

Company: Karooooo Ltd.
Filing Date: 2025-06-09
Form: 20-F
Item: Item 3
Chunk 62
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 we have opted
to rely on the exemptions provided in the JOBS Act, and consequently will not be required to comply with U. S. Securities and Exchange
Commission (“ SEC”) rules that implement Section 404(b) until such time as we are no longer an EGC.

If it is determined that we are
not in compliance with Section 404(a), we will be required to implement new internal control procedures and re-evaluate our financial
reporting. We may experience higher than anticipated operating expenses as well as outside auditor fees during the implementation of these
changes and thereafter. We may need to hire additional qualified employees in order for us to maintain compliance with Section 404. During
the course of documenting and testing our internal control procedures, in order to satisfy the requirements of Section 404(a), we may
identify weaknesses and deficiencies in our internal control over financial reporting. For example, as part of these procedures, we noted
that material weaknesses were identified in relation to privileged user access and change management controls relating to certain of our
systems as well as journal processing control in one of our subsidiaries as at February 28, 2025. See Item 15. “ Controls and Procedures.”
If we fail, for any reason, to implement these changes effectively or efficiently, such failure could harm our operations, financial reporting
or financial results and the trading price of our ordinary shares, expose us to increased risk of fraud or misuse of corporate assets,
subject us to regulatory investigations and civil or criminal sanctions and could result in our conclusion that our internal control over
financial reporting is not effective.

Insiders have substantial control
over us and may have interests that are different from the interests of our other shareholders.

Certain of our major shareholders
may have interests that are different from, or are in addition to, the interests of our other shareholders. In particular, our Chief Executive
Officer and certain of his affiliates may be deemed to beneficially own approximately 73.48 % of outstanding shares as at May 9, 2025.
For so long as such shareholders continue to own a significant percentage of our ordinary shares, they will be able to significantly influence
the composition of our board of directors and the approval of actions requiring shareholder approval through their voting power. Additionally,
as a consequence of our “staggered” board of directors, as further described in Item 6. C. “ Board Practices - Board
Composition,” only a minority of the board of directors will be considered for election at any annual meeting and such shareholders,