Attovia Therapeutics, Inc. (ATTO) Risk Analysis

Future equity issuances may dilute the holdings of ordinary shareholders and could materially affect the market price of

judgments against us or our executive officers and directors in the United States. We are organized under the laws of the Grand Duchy of Luxembourg. Most of our assets are located outside the United States. Furthermore, some of our directors and officers named in this Annual Report reside outside the United States and most of their assets are located outside the United States. As a result, investors may find it difficult to effect service of process within the United States upon us or these persons or to enforce outside the United States judgments obtained against us or these persons in U.S. courts, including judgments in actions predicated upon the civil liability provisions of the U.S. federal securities laws. Likewise, it may also be difficult for an investor to enforce in U.S. courts judgments obtained against us or these persons in courts located in jurisdictions outside the United States, including actions predicated upon the civil liability provisions of the U.S. federal securities laws. It may also be difficult for an investor to bring an original action in a Luxembourg court predicated upon the civil liability provisions of the U.S. federal securities laws against us or these persons. Luxembourg law, furthermore, does not recognize a shareholder's right to bring a derivative action on behalf of the Company except where such shareholder or a group of shareholders holds shares representing at least ten percent (10%) of the Company's share capital at the annual gene ral meeting of shareholders of the Company resolving upon the discharge to be granted to the directors. As there is no treaty in force on the reciprocal recognition and enforcement of judgments in civil and commercial matters between the United States and the Grand Duchy of Luxembourg, courts in Luxembourg will not automatically recognize and enforce a final judgment rendered by a U.S. court. The enforceability in Luxembourg courts of judgments entered by U.S. courts will depend upon the conditions set forth in the Luxembourg procedural code, which may include the following: the judgment of the U.S. court is enforceable (exécutoire ) in the United States;the U.S. court had jurisdiction over the subject matter leading to the judgment (that is, its jurisdiction was in compliance both with Luxembourg private international law rules and with the applicable domestic U.S. federal or state jurisdictional rules);the U.S. court has applied to the dispute the substantive law designated by the Luxembourg conflict of law rules (although one first instance decision rendered in Luxembourg-which had not been appealed-no longer applies this condition);the judgment was granted following proceedings where the counterparty had the opportunity to appear, and if appeared,there was no violation of the rights of the defendant;the U.S. court has acted in accordance with its own procedural rules; and the judgment of the U.S. court does not contravene Luxembourg international public policy. Our directors and officers, past and present, are entitled to indemnification from us to the fullest extent permitted by Luxembourg law against liability and all expenses reasonably incurred or paid by him/her in connection with any losses or liabilities,claim, action, suit or proceeding in which he/she is involved by virtue of his/her being or having been a director or officer and against amounts paid or incurred by him in the settlement thereof, subject to limited exceptions. To the extent allowed by law, the rights and obligations among us and any of our current or former directors and officers will be governed exclusively by the laws of Luxembourg and subject to the jurisdiction of the Luxembourg courts, unless such rights or obligations do not relate to or arise out of their capacities as directors or officers. Although there is doubt as to whether U.S. courts would enforce such a provision in an action brought in the United States under U.S. securities laws, such provision could make enforcing judgments obtained outside Luxembourg more difficult to enforce against our assets in Luxembourg or in jurisdictions that would apply Luxembourg law.

applicable to U.S. issuers, including the requirement that a majority of an issuer's directors consist of independent directors.

This may afford less protection to holders of our ordinary shares. The New York Stock Exchange listing rules require listed companies to have, among other things, a majority of their board members be independent, and to have independent director oversight of executive compensation, nomination of directors and corporate governance matters. As a foreign private issuer, however, while we intend to comply with these requirements within the permitted phase -in periods, we are permitted to follow home country practice in lieu of the above requirements. Luxembourg law, the law of our home country, does not require that a majority of our board consist of independent directors or the implementation of a nominating and corporate governance committee, and our board may thus in the future not include, or include fewer, independent directors than would be required if we were subject to the New York Stock Exchange listing rules, or they may decide that it is in our interest not to have a Compensation Committee or Nominating and Corporate Governance Committee, or have such committees governed by practices that would not comply with New York Stock Exchange listing rules. Since a majority of our board of directors may not consist of independent directors if we decide to rely on the foreign private issuer exemption to the New York Stock Exchange listing rules, our board's approach may, therefore, be different from that of a board with a majority of independent directors, and as a result, the management oversight of our Company could, in the future, be more limited than if we were subject to the New York Stock Exchange listing rules. Moreover, we are not required to file periodic reports and financial statements with the SEC as frequently or as promptly as companies that are not foreign private issuers whose securities are registered under the U.S. Exchange Act. In addition, we are not required to comply with Regulation FD, which restricts the selective disclosure of material information. As a result, our shareholders may not have access to information they deem important, which may result in our shares being less attractive to investors.

impact our share price. The market price of our ordinary shares could decline as a result of sales of a large number of our ordinary shares in the market,and the perception that these sales could occur may also depress the market price of our ordinary shares. We have 15.0 million ordinary shares outstanding as of December 31, 2021. Pursuant to an agreement, the major shareholders of Atento agreed that during the 24-month period following its acquisition will not sell, assign, transfer, pledge hypothecate, encumber or otherwise dispose of the shares without the written permission of the Issuer After this limitation of transfer until May 2022 all of our outstanding ordinary shares may be sold in the public market by existing stockholders subject to applicable volume and other limitations imposed under federal securities laws. Sales of our ordinary shares or pursuant to registration rights may make it more difficult for us to sell equity securities in the future at a time and at a price that we deem appropriate. These sales, or the perception that such sales could occur, also could cause the market price for our ordinary shares to fall and make it more difficult for you to sell our ordinary shares.

Our results of operations could be adversely affected if we are unable to maintain effective internal controls and procedures . Any internal and disclosure controls and procedures, no matter how well conceived and operated, can provide only reasonable,not absolute, assurance that the objectives of the control system are met. The design of a control system must consider the benefits of controls relative to their costs. Inherent limitations within a control system include the realities that judgments in decision -making can be faulty, and that breakdowns can occur because of simple errors or mistakes. Additionally, controls can be circumvented by individuals acting alone or in collusion with others to override controls. Accordingly, because of the inherent limitations in the design of a cost-effective control system, misstatements due to error or fraud may occur and may not always be prevented or detected in a timely way. If we are unable to assert that our internal controls over financial reporting is effective now or in the future, or if our auditors are unable to express an opinion on the effectiveness of our internal controls, we could lose investor confidence in the accuracy and completeness of our financial reports, which could have an adverse effect on our stock price.

Telefónica S.A., certain of its affiliates and a few other major clients account for a significant portion of our revenue and

inability to utilize tax credits available to us, financial condition, results of operations and

operations, effective tax rate,

Our business could be adversely affected by the effects of a widespread outbreak of contagious disease, including the recent outbreak of respiratory illness caused by a novel strain of coronavirus (COVID-19 virus). Any outbreak of contagious diseases, and other adverse public health developments, could have a material adverse effect on our business operations. These could include temporary closures of our facilities or the facilities of our customers (which may be mandated by local health or government authorities),a disruption of supply chain for our customers, the temporary suspension of operations by us or our customers, travel restrictions on our employees and other disruptions to our business. Additionally, because our revenues are, in part, tied to the revenues of our customers,any impact on the business or revenues of our customers may result in an impact on our own business or revenues. A significant outbreak of contagious diseases in the human population could result in a widespread health crisis that could adversely affect the economies and financial markets of many countries, resulting in an economic downturn that could affect demand for our services and likely impact our operating results and cash flows.

results of operations and prospects. The CRM BPO industry in which we operate is subject to the periodic introduction of new technologies which often can enable us to service our clients more efficiently and cost effectively. Our business success is partly linked to our ability to recognize these new technological innovations from industry -leading providers of such technologies and to apply these technological innovations to our business. If we do not recognize the importance of new technologies to our business in a timely manner or are not committed to investing in and developing such new technologies and applying these to our business, our current products and services may be less attractive to existing and new clients, and we may lose market share to competitors who have recognized these trends and invested in such technologies. There can be no assurance that we will have sufficient capacity or capital to meet these challenges. Any such failure to recognize the importance of such technologies or a decision not to invest and develop such technologies that keeps pace with evolving industry standards and changing client demands could have a material adverse effect on our business, financial condition, results of In addition, any increases in the cost of telecommunications services and products provided by third parties, including telecommunications equipment, software, IT products and related IT services and call center workstations have a direct effect on our operating costs. The cost of telecommunications services is subject to several factors, including changes in regulations and the telecommunications market as well as competitive factors, for example, the concentration and bargaining power of technology and telecommunications suppliers, most of which are beyond our control or which we cannot predict. The increase in the costs of these essential services and products could have a material adverse effect on our business, financial condition, results of operations and prospects.

have a material adverse effect on our business, financial condition, results of operations and prospects. As of December 31, 2021, the majority of our revenue was generated in countries that use currencies other than the U.S. dollar,mostly the local currencies of the Latin American countries in which we operate (particularly, currencies such as the Brazilian Reais,the Mexican Peso, the Chilean Peso and the Argentinean Peso). Both Brazil and Mexico have experienced inflation and currency volatility in the past and Argentina is classified as a hyperinflationary economy. We report our financial results in U.S. dollars and our results of operations would be adversely affected if these local currencies depreciate significantly against the U.S. dollar, which may also affect the comparability of our financial results from period to period, as we convert our subsidiaries' statements of financial position into U.S. dollars from local currencies at the period-end exchange rate, and statements of operations and cash flows at average exchange rates for the year, except for Argentina. Conversely, where we provide offshore services to U.S. clients and our revenue is earned in U.S. dollars, an appreciation in the currency of the country in which the services are provided could result in an increase in our costs in proportion to the revenue we earn for those services. The exchange rates between these local currencies and the U.S. dollar have changed substantially in recent years and may fluctuate substantially in the future. For the years ended December 31, 2019, 2020 and 2021, these fluctuations had a significant effect on our results of operations . In addition, future government action, including changes in interest rates and monetary policy or intervention in the currency exchange markets and other government actions to adjust the value of the local currency may trigger inflation and other adverse economic conditions. For example, governmental measures to control inflation may include maintaining a tight monetary policy with high interest rates, thereby restricting the availability of credit and reducing economic growth. As a result, interest rates may fluctuate significantly. Furthermore, losses incurred based on the exchange rate used for reporting purposes may be exacerbated if regulatory restrictions are imposed when these currencies are converted into U.S. dollars. The occurrence of such fluctuations, devaluations or other currency risks could have a material adverse effect on our business,

External Risks

Summary Risk Factors

consequences to U.S. Holders of our ordinary shares. Based on the composition of our income, assets and operations, we do not expect to be treated as a passive foreign investment company ("PFIC") for U.S. federal income tax purposes for the current taxable year or in the foreseeable future. However, the application of the PFIC rules is subject to uncertainty in several respects, and we cannot assure you the U.S. Internal Revenue Service will not take a contrary position. Furthermore, this is a factual determination that must be made annually after the close of each taxable year. If we are a PFIC for any taxable year during which a "U.S. Holder" a beneficial owner of ordinary shares that is for U.S. federal income tax purposes: (a) an individual who is a citizen or resident of the U.S.; (b) a corporation (or other entity taxable as a corporation for U.S. federal income tax purposes) created or organized in or under the laws of the U.S., any state thereof or the District of Columbia; (c) an estate the income of which is subject to U.S. federal income taxation regardless of its source; or (d) a trust (i) if a court within the U.S. can exercise primary supervision over its administration, and one or more U.S. persons have the authority to control all of the substantial decisions of that trust, or (ii) that was in existence on August 20, 1996 and validly elected under applicable Treasury Regulations to continue to be treated as a domestic trust that holds our ordinary shares, certain adverse U.S. federal income tax consequences could apply to such U.S. Holder.

our ordinary shares. We may in the future decide to offer additional equity to raise capital or for other purposes. Any such offering could reduce the proportionate ownership and voting interests of holders of our ordinary shares, as well as our earnings per ordinary share and net asset value per ordinary share. Future sales of substantial amounts of our ordinary shares in the public market, whether by us or by our existing shareholders, or the perception that sales could occur, may adversely affect the market price of our shares, which could decline significantly.

could require us to make additional expenditures, restrict our business operations or expose us to significant fines or

interest we pay on floating rate indebtedness and other instruments. LIBOR is being discontinued as a floating rate benchmark. The date of discontinuation will vary depending on the LIBOR currency and tenor. LIBOR has been the principal floating rate benchmark in the financial markets, and its discontinuation has affected and will continue to affect the financial markets generally and may also affect the Company's operations specifically. As of December 31, 2021, 3.5% of our outstanding indebtedness was tied to LIBOR and we have other financial instruments tied to LIBOR. To the extent interest payments are linked to LIBOR at the time of its discontinuation, the applicable floating interest rate will be determined using the alternative methods then set forth under the applicable agreements. Rates based on the Secured Overnight Financing Rate ("SOFR") are expected to be the principal replacement rates for USD LIBOR. Because SOFR is a financing rate based on overnight funding transactions secured by U.S. Treasury securities, it differs fundamentally from USD LIBOR. SOFR has a limited history, having been first published in April 2018. Future levels of SOFR and SOFR-based rates may bear little or no relation to historical levels of SOFR, SOFR-based rates, USD LIBOR or other rates. Moreover, SOFR has been more volatile than other benchmark or market rates,such as three-month USD LIBOR, during certain periods. For these reasons, among others, there is no assurance that SOFR or any SOFR-based rate will perform in the same or similar way as USD LIBOR would have performed at any time, and there is no assurance that SOFR and SOFR-based rates will be a suitable substitute for USD LIBOR. Resulting differences may significantly affect our operations and indebtedness, because SOFR-based rates are not only expected to become the interest rate basis for our existing LIBOR indebtedness but may also be the interest rate basis for floating rate indebtedness that we incur in the future.

The discontinuation of LIBOR, and the establishment and utilization of alternative reference rates, may adversely affect the

Our existing debt may affect our flexibility in operating and developing our business and our ability to satisfy our

As of December 31, 2021, we had total indebtedness of $718.3 million. Our level of indebtedness may have significant negative effects on our future operations, including: impairing our ability to obtain additional financing in the future (or to obtain such financing on acceptable terms) for working capital, capital expenditure, acquisitions, or other important needs;requiring us to dedicate a substantial portion of our cash flow to the payment of principal and interest on our indebtedness,which could impair our financial liquidity and reduce the availability of our cash flow to fund working capital, capital expenditure, acquisitions and other important needs;increasing the possibility of an event of default under the financial and operating covenants contained in our debt instruments; and limiting our ability to adjust to rapidly changing conditions in the industry, reducing our ability to withstand competitive pressures and making us more vulnerable to a downturn in general economic conditions or business than our competitors with less debt. If we are unable to generate sufficient cash flow from operations to service our debt, we may be required to refinance all or a portion of our existing debt or obtain additional financing. We cannot assure that any such refinancing would be possible or that any additional financing could be obtained. Our inability to obtain such refinancing or financing may have a material adverse effect on our business, financial condition, results of operations and prospects. In addition, our financing arrangements contain a number of covenants and restrictions, including limits on our ability and our subsidiaries' ability to incur additional debt, pay dividends and make certain investments. Complying with these covenants may cause us to take actions that make it more difficult to successfully execute our business strategy and we may face competition from companies not subject to such restrictions. Moreover, our failure to comply with these covenants could result in an event of default or refusal by our creditors to renew certain of our loans.

The Company's results of operations, cash flows and

If we are unable to fund our working capital requirements and new investments, our business, financial condition, results

condition, results of operations and prospects. We derive a significant portion of our revenue from companies within Telefónica S.A. group and other major client groups. For the years ended December 31, 2019, 2020 and 2021, we generated 35.6%, 31.8% and 32%, respectively, of our revenue from the services provided to the Telefónica S.A. group. Our contracts with Telefónica S.A. companies in Brazil and Spain comprised 59.5%,56.5% and 56.1%, respectively, of our revenue from Telefónica S.A. group for the years ended December 31, 2019, 2020 and 2021. Our 15 largest client groups (including Telefónica S.A. group) on a consolidated basis accounted for a total of 66.2% of our revenue for the year ended December 31, 2021. We are party to a master services agreement (the "MSA") with Telefónica S.A. for the provision of certain CRM BPO services to Telefónica S.A. companies which governs the services agreements entered with Telefónica S.A. companies. Although the MSA is an umbrella agreement which governs our services agreements with Telefónica S.A. companies, the expiration of the MSA on December 31, 2021 (except in Brazil and Spain, where the MSA terminates on December 31, 2023) does not automatically result in a termination of any of the local services agreements in force after those dates. While our service contracts with the Telefónica S.A. companies have traditionally been renewed, there can be no assurance that such contracts will be renewed upon their expiration. As of the date of this report company completed the renegotiation with Telefónica S.A for a renewal of MSA agreements including an extension for more one year until December 31, 2022 (except in Brazil and Spain, where the MSA terminates on December 31, 2023). In addition, there can be no assurance that the volume of work to be performed by us for the various Telefónica S.A. companies will not vary significantly from year to year in the aggregate, particularly since we are not the exclusive outsourcing provider for the Telefónica S.A. Consequently, our revenue or margins from the Telefónica S.A. may decrease in the future. A number of factors other than the price and quality of our work and the services we provide could result in the loss or reduction of business from Telefónica S.A. companies, including the impacts of adverse macro-economic conditions on Telefónica S.A.'s business, and we cannot predict the timing or occurrence of any such event. For example, a Telefónica S.A. company may demand price reductions, increased quality standards,change its CRM BPO strategy, or under certain circumstances transfer some or all the work and services we currently provide to Telefónica S.A. own structure. The loss of a significant part of our revenue derived from these clients, particularly Telefónica S.A., as a result of the occurrence of one or more of the above events would have a material adverse effect on our business, financial condition, results of operations and prospects. For the period ending December 31, 2021, cybersecurity incident impacted the results of operations derived from serving Telefónica in Brazil, as the Company was not able to comply with all the contracted service volume for the months of October and November. See discussion of this cybersecurity incident in our Management's Discussion and Analysis of Financial Condition and Results of Operations.

any loss of a large portion of business from these clients could have a material adverse effect on our business, financial

services, which we rely on from third parties, could have a material adverse effect on our business, financial condition,

For the years ended December 31, 2019, 2020 and 2021, revenue from our operations in Brazil accounted for 48.5%, 43.2%and 39,2% of our total revenue, respectively, and EBITDA from our operations in Brazil accounted for 63.1%, 48.5% and 32% of our total EBITDA, respectively (in each case, before holding company level revenue, expense and consolidation adjustments). Historically, the Brazilian government has frequently intervened in the Brazilian economy and occasionally made drastic changes in policy and regulations. The Brazilian government's actions to control inflation and implement macroeconomic policies have in the past often involved wage and price controls, currency devaluations, capital controls and limits on imports, among other things. Our business, financial condition, results of operations and prospects may be adversely affected by changes in policies or regulations,and economic conditions such as: devaluations and other currency fluctuations;inflation and interest rates;liquidity of domestic capital and lending markets;energy shortages;exchange controls and restrictions on remittances abroad (such as those that were briefly imposed in 1989 and early 1990);monetary and tax policy;minimum wage policy and other political, diplomatic, social and economic developments in or affecting Brazil. The Brazilian currency has been devalued over the last 5 years. Throughout this period, the Brazilian government has implemented various economic plans and used various exchange rate policies, including sudden devaluations, periodic mini devaluations (such as daily adjustments), exchange controls, dual exchange rate markets and a floating exchange rate system. From time to time,there have been significant fluctuations in the exchange rate between the Brazilian currency and the U.S. dollar and other currencies. In recent years, there have been considerable changes in tax policy in Brazil, including tax increases that have impacted our business, and further changes have been proposed. Uncertainty over whether possible changes in policies or rules affecting these or other factors may contribute to economic uncertainties in Brazil, which could adversely affect our business, financial condition, results of operations and prospects.

inherent in operating and investing in the region. For the year ended December 31, 2021, we derived 43,7% of our revenue from the Americas and 39,2% from Brazil. Our operations and investments in the Americas and Brazil are subject to various risks related to the economic, political and social conditions of the countries in which we operate, including risks related to the following: inconsistent regulations, licensing and legal requirements may increase our cost of operations as we endeavor to comply with myriad of laws that differ from one country to another in an unpredictable and adverse manner;currencies may be devalued or may depreciate or currency restrictions or other restraints on transfer of funds may be imposed;the effects of inflation and currency depreciation and fluctuation may require certain of our subsidiaries to undertake a mandatory recapitalization;certain governments may expropriate or nationalize assets or increase their participation in companies;certain governments may impose burdensome regulations, taxes or tariffs;political changes may lead to changes in the business environments in which we operate; and economic downturns, political instability, civil disturbances, pandemics or disease outbreaks, such as the novel coronavirus (COVID-19 virus), may negatively affect our operations.

Risks related to Our operations Increases in employee benefit expenses as well as changes to labor laws could reduce our profit margin. Fluctuations in, or devaluation of, the local currencies in the countries in which we operate against the U.S. dollar could have a material adverse effect on our business, financial condition, results of operations and prospects. Damage or disruptions to our key technology systems and facilities either through events beyond or within our control that adversely affect our clients' businesses, could have a material adverse effect on our business, financial condition,results of operations and prospects. Telefónica S.A., certain of its affiliates and a few other major clients account for a significant portion of our revenue and any loss of a large portion of business from these clients could have a material adverse effect on our business, Our existing debt may affect our flexibility in operating and developing our business and our ability to satisfy our obligations. You should carefully consider the following risks in conjunction with "Item 5. Operating and Financial Review and Prospects", the Consolidated Financial Statements, including the notes thereto, included in this annual report, and the other risks described in the "Cautionary Statement with Respect to Forward-Looking Statements" section and other documents filed by the Company from time to time with the SEC. These risks may affect the Company's operating results and, individually or in the aggregate,could cause its actual results to differ materially from past and anticipated future results. The following discussion of risks may contain forward-looking statements which are intended to be covered by the Cautionary Statement with Respect to Forward- Looking Statements. Except as may be required by law, the Company undertakes no obligation to publicly update forward-looking statements, whether as a result of new information, future events, or otherwise. All forward-looking statements contained in this annual report on Form 20-F are qualified in their entirety by this cautionary statement. The Company invites you to consult any further related disclosures made in materials filed with or furnished to the SEC.

our business, financial condition, results of operations and prospects. Global market and economic conditions, including in Latin America, in the past several years have presented volatility and increasing risk perception, with tighter credit conditions and recession or slower growth in most major economies continuing into 2022. Our results of operations are affected directly by the level of business activity of our clients, which in turn is affected by the level of economic activity in the industries and markets that they serve. Many of our clients' industries are especially vulnerable to any crisis in the financial and credit markets or to economic downturns. For the year ended December 31, 2021, 29,5% of our revenue was derived from clients in the telecommunications industry, with 32% of our revenue derived from Telefónica, and 19.5% of our revenue was derived from clients in the financial services industry, including insurance businesses. Our business and future growth largely depend on continued demand for our services from clients in these industries. As our business has grown, we have become increasingly exposed to adverse changes in general global economic conditions,which may result in reductions in spending by our clients and their customers. Global economic concerns such as the varying pace of global economic recovery continue to create uncertainty and unpredictability and may have an adverse effect on the cost and availability of credit, leading to decreased spending by businesses. Any deterioration of general economic conditions, or weak economic performance in the economies of the countries in which we operate, particularly in Brazil and the Americas may have a material adverse effect on our business, financial condition, results of operations and prospects. Brazil and the Americas, for example, comprised 87.1%,84.4% and 83% of our revenue respectively, for the years ended December 31, 2019, 2020 and 2021. In addition, key markets such as the telecommunications and financial services industries comprised 48.5% of our revenue for the year ended December 31, 2021.

Specific Risks

of operations and prospects. Consolidation of existing and potential users of CRM BPO services may decrease the number of clients who contract our services. Any significant reduction in or elimination of the use of the services we provide because of consolidation would result in reduced net revenue to us and could harm our business. Such consolidation may encourage clients to apply increasing pressure on us to lower the prices we charge for our services, which could have a material adverse effect on our business, financial condition, results of

us, which could have a materia l adverse effect on our business, financial condition, results of operations and prospects. Most of our contracts with clients contain service level and performance requirements, including requirements relating to the quality of our services and the timing and quality of responses to the client's customer inquiries. In some cases, the quality of services that we provide is measured by quality assurance indicators and surveys which are based in part on the results of direct monitoring by our clients of interactions between our employees and their customers. Failure to consistently meet service requirements of a customer or errors made by our employees while delivering services to customers could disrupt our client's business and result in a reduction in revenue or a claim for substantial damages against us. For example, some of our agreements stipulate standards of service that, if not met by us, would result in lower payments to us. We also enter variable pricing arrangements with certain clients and the quality of services provided may be a component of the calculation of the total amounts received from such clients under these arrangements. In addition, in connection with our service contracts, certain representations may be made, including representations relating to the quality of our services, the ability of our employees and our project management techniques. A failure or inability to meet these requirements or a breach of such representations could seriously damage our reputation and affect our ability to attract new business or result in a claim for damages against us, which could have a material adverse effect on our business, financial condition, results of

Any determination to pay dividends is at the discretion of our board of directors, and we may not pay any dividends.

providing CRM BPO services and/or outsourcing activities slow or are reversed, it may materially adversely affect our

business, results of operations, financial condition and prospects. None of our current agreements with our clients prevent them from competing with us in our CRM BPO business and none of our clients have entered any non-compete agreements with us. Our current clients may seek to provide CRM BPO services similar to those we provide. Some clients conduct CRM BPO services for other parts of their own businesses and for third parties. Any decision by our key clients to enter into or further expand their CRM BPO business activities in the future could cause us to lose valuable clients and suppliers and may materially adversely affect our business, financial condition, results of operations and prospects. Moreover, we have based our strategy of future growth on certain assumptions regarding our industry, legal framework, services and future demand in the market for such services. However, the trend to outsource business processes may not continue and could be reversed by factors beyond our control, including negative perceptions of outsourcing activities or government regulations against outsourcing activities. In addition, our business may be adversely affected by potential new laws and regulations prohibiting or limiting outsourcing of certain core business activities of our clients in key jurisdictions in which we conduct our business, such as in Brazil. The introduction of such laws and regulations or a change in interpretation of existing laws and regulations could adversely affect our business, financial condition, results of operations and prospects.

We may be classified as a passive foreign investment company, which could result in adverse U.S. federal income tax