MemGPT/example-sec-filings · Datasets at Hugging Face

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For certain payment methods, including credit and debit cards, we pay
interchange and other fees, and such fees result in significant costs.
Payment card network costs have increased, and may continue to increase
in the future, the interchange fees and assessments that they charge for
each transaction that accesses their networks, and may impose special
fees or assessments on any such transaction. Our payment card processors
have the right to pass any increases in interchange fees and assessments
on to us. Credit card transactions result in higher fees to us than
transactions made through debit cards. Any material increase in
interchange fees in the United States or other geographies, including as
a result of changes in interchange fee limitations imposed by law in
some geographies, or other network fees or assessments, or a shift from
payment with debit cards to credit cards could increase our operating
costs and materially adversely affect our business, results of
operations, and financial condition.

*Our failure to properly manage funds held on behalf of customers could
materially adversely affect our business, results of operations, and
financial condition.*

We offer integrated payments in over 40 currencies to allow access to
guest demand from more than 220 countries and regions and the ability
for many Hosts to be paid in their local currency or payment method of
choice. When a guest books and pays for a stay or experience on our
platform, we hold the total amount the guest has paid until check-in, at
which time we recognize our service fee as revenue and initiate the
process to remit the payment to the Host, which generally occurs 24
hours after the scheduled check-in, barring any alterations or
cancellations, which may result in funds being returned to the guest.
Accordingly, at any given time, we hold on behalf of our Hosts and

39

guests a substantial amount of funds, which are generally held in bank
deposit accounts and in U.S. treasury bills and recorded on our
consolidated balance sheets as funds receivable and amounts held on
behalf of customers. In certain jurisdictions, we are required to either
safeguard customer funds in bankruptcy-remote bank accounts, or hold
such funds in eligible liquid assets, as defined by the relevant
regulators in such jurisdictions, equal to at least 100% of the
aggregate amount held on behalf of customers. Our ability to manage and
account accurately for the cash underlying our customer funds requires a
high level of internal controls. As our business continues to grow and
we expand our offerings and tiers, we must continue to strengthen our
associated internal controls. Our success requires significant public
confidence in our ability to handle large and growing transaction
volumes and amounts of customer funds. Any failure to maintain the
necessary controls or to manage the assets underlying our customer funds
accurately could result in reputational harm, lead customers to
discontinue or reduce their use of our platform and services, and result
in significant penalties and fines from regulators, each of which could
materially adversely affect our business, results of operations, and
financial condition.

*If one or more of our counterparty financial institutions default on
their financial or performance obligations to us or fail, we may incur
significant losses or be unable to process payment transactions.*

We have significant amounts of cash, cash equivalents, and other
investments, including money market funds, certificates of deposit, U.S.
government debt securities, commercial paper, corporate debt securities,
government agency debt securities, mortgaged-backed and asset-backed
securities, with banks or other financial institutions in the United
States and abroad for both our corporate balances and for funds held on
behalf of our Hosts and guests. We also rely on such banks and financial
institutions to help process payments transactions. We have both
significant funds flows from and to various financial institutions as a
result of our processing of payments from guests to Hosts. As part of
our currency hedging activities on these balances, we enter into
transactions involving derivative financial instruments with various
financial institutions. We regularly monitor our exposure to
counterparty credit risk and manage this exposure in an attempt to
mitigate the associated risk. Despite these efforts, we may be exposed
to the risk of default by, or deteriorating operating results or
financial condition, or service interruptions at, or failure of, these
counterparty financial institutions. If one of our counterparties were
to become insolvent or file for bankruptcy, our ability to recover
losses or to access or recover our assets may be limited by the
counterparty' liquidity or the applicable laws governing the insolvency
or bankruptcy proceedings. Furthermore, our ability to process payment
transactions via such counterparties would be severely limited or cease.
In the event of default or failure of one or more of our counterparties,
we could incur significant losses and be required to make payments to
Hosts and/or refunds to guests out of our own funds, which could
materially adversely affect our results of operations and financial
condition.

*The failure to successfully execute and integrate acquisitions could
materially adversely affect our business, results of operations, and
financial condition.*

We have acquired multiple businesses, including our acquisitions of
HotelTonight, Inc. and UrbanDoor Inc. in 2019, and we regularly evaluate
potential acquisitions. We may expend significant cash or incur
substantial debt to finance such acquisitions, which indebtedness could
result in restrictions on our business and significant use of available
cash to make payments of interest and principal. In addition, we may
finance acquisitions by issuing equity or convertible debt securities,
which could result in further dilution to our existing stockholders. We
may enter into negotiations for acquisitions that are not ultimately

For certain payment methods, including credit and debit cards, we pay

interchange and other fees, and such fees result in significant costs.

Payment card network costs have increased, and may continue to increase

in the future, the interchange fees and assessments that they charge for

each transaction that accesses their networks, and may impose special

fees or assessments on any such transaction. Our payment card processors

have the right to pass any increases in interchange fees and assessments

on to us. Credit card transactions result in higher fees to us than

transactions made through debit cards. Any material increase in

interchange fees in the United States or other geographies, including as

a result of changes in interchange fee limitations imposed by law in

some geographies, or other network fees or assessments, or a shift from

payment with debit cards to credit cards could increase our operating

costs and materially adversely affect our business, results of

operations, and financial condition.

*Our failure to properly manage funds held on behalf of customers could

materially adversely affect our business, results of operations, and

financial condition.*

We offer integrated payments in over 40 currencies to allow access to

guest demand from more than 220 countries and regions and the ability

for many Hosts to be paid in their local currency or payment method of

choice. When a guest books and pays for a stay or experience on our

platform, we hold the total amount the guest has paid until check-in, at

which time we recognize our service fee as revenue and initiate the

process to remit the payment to the Host, which generally occurs 24

hours after the scheduled check-in, barring any alterations or

cancellations, which may result in funds being returned to the guest.

Accordingly, at any given time, we hold on behalf of our Hosts and

39

guests a substantial amount of funds, which are generally held in bank

deposit accounts and in U.S. treasury bills and recorded on our

consolidated balance sheets as funds receivable and amounts held on

behalf of customers. In certain jurisdictions, we are required to either

safeguard customer funds in bankruptcy-remote bank accounts, or hold

such funds in eligible liquid assets, as defined by the relevant

regulators in such jurisdictions, equal to at least 100% of the

aggregate amount held on behalf of customers. Our ability to manage and

account accurately for the cash underlying our customer funds requires a

high level of internal controls. As our business continues to grow and

we expand our offerings and tiers, we must continue to strengthen our

associated internal controls. Our success requires significant public

confidence in our ability to handle large and growing transaction

volumes and amounts of customer funds. Any failure to maintain the

necessary controls or to manage the assets underlying our customer funds

accurately could result in reputational harm, lead customers to

discontinue or reduce their use of our platform and services, and result

in significant penalties and fines from regulators, each of which could

materially adversely affect our business, results of operations, and

financial condition.

*If one or more of our counterparty financial institutions default on

their financial or performance obligations to us or fail, we may incur

significant losses or be unable to process payment transactions.*

We have significant amounts of cash, cash equivalents, and other

investments, including money market funds, certificates of deposit, U.S.

government debt securities, commercial paper, corporate debt securities,

government agency debt securities, mortgaged-backed and asset-backed

securities, with banks or other financial institutions in the United

States and abroad for both our corporate balances and for funds held on

behalf of our Hosts and guests. We also rely on such banks and financial

institutions to help process payments transactions. We have both

significant funds flows from and to various financial institutions as a

result of our processing of payments from guests to Hosts. As part of

our currency hedging activities on these balances, we enter into

transactions involving derivative financial instruments with various

financial institutions. We regularly monitor our exposure to

counterparty credit risk and manage this exposure in an attempt to

mitigate the associated risk. Despite these efforts, we may be exposed

to the risk of default by, or deteriorating operating results or

financial condition, or service interruptions at, or failure of, these

counterparty financial institutions. If one of our counterparties were

to become insolvent or file for bankruptcy, our ability to recover

losses or to access or recover our assets may be limited by the

counterparty' liquidity or the applicable laws governing the insolvency

or bankruptcy proceedings. Furthermore, our ability to process payment

transactions via such counterparties would be severely limited or cease.

In the event of default or failure of one or more of our counterparties,

we could incur significant losses and be required to make payments to

Hosts and/or refunds to guests out of our own funds, which could

materially adversely affect our results of operations and financial

condition.

*The failure to successfully execute and integrate acquisitions could

materially adversely affect our business, results of operations, and

financial condition.*

We have acquired multiple businesses, including our acquisitions of

HotelTonight, Inc. and UrbanDoor Inc. in 2019, and we regularly evaluate

potential acquisitions. We may expend significant cash or incur

substantial debt to finance such acquisitions, which indebtedness could

result in restrictions on our business and significant use of available

cash to make payments of interest and principal. In addition, we may

finance acquisitions by issuing equity or convertible debt securities,

which could result in further dilution to our existing stockholders. We

may enter into negotiations for acquisitions that are not ultimately