What changed in this filing

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Item 9A. Controls and Procedures

2024-03-07 compared with 2023-03-06 · 216 added, 141 removed, 751 unchanged (32% of the section changed)

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Management’s Evaluation of Disclosure Controls and Procedures

The Company’s management, with the participation of the Chief Executive Officer and Chief Financial Officer, evaluated the effectiveness of the Company’s disclosure controls and procedures as of December 31, 2022.

Our management, with the participation of our Chief Executive Officer (our principal executive officer) and Chief Financial Officer (our principal financial officer), evaluated the effectiveness of our disclosure controls and procedures as of December 31, 2023.

The term “disclosure controls and procedures,” as defined in Rules 13a-15(e) and 15d-15(e) promulgated under the Exchange Act, means controls and other procedures of a company that are designed to ensure that information required to be disclosed by a company in the reports that it files or submits under the Exchange Act is recorded, processed, summarized, and reported, within the time periods specified in the SEC's rules and forms.

Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed by a company in the reports that it files or submits under the Exchange Act is accumulated and communicated to the company’s management, including its principal executive and principal financial officers, as appropriate to allow timely decisions regarding required disclosure.

Management recognizes that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving their objectives and management necessarily applies its judgment in evaluating the cost-benefit relationship of possible controls and procedures.

The Company’s disclosure controls and procedures are designed to provide reasonable assurance of achieving their objectives as described above.

Based on this evaluation, the Chief Executive Officer and Chief Financial Officer concluded that, as of the end of the period covered by this report, the Company’s disclosure controls and procedures were effective at the reasonable assurance level.

Our management recognizes that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving their objectives and management necessarily applies its judgment in evaluating the cost-benefit relationship of possible controls and procedures.

Our disclosure controls and procedures are designed to provide reasonable assurance of achieving their objectives as described above.

Based on this evaluation, our Chief Executive Officer and Chief Financial Officer concluded that, as of December 31, 2023, our disclosure controls and procedures were effective at the reasonable assurance level.

Management’s Annual Report on Internal Control over Financial Reporting

The Company’s management is responsible for establishing and maintaining adequate internal control over financial reporting for the Company.

Internal control over financial reporting is defined in Rule 13a-15(f) or 15d-15(f) promulgated under the Exchange Act as a process designed by, or under the supervision of, the Company’s principal executive and principal financial officers and effected by the Company’s Board of Directors, management, and other personnel to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with U.S.

Our management is responsible for establishing and maintaining adequate internal control over our financial reporting.

Internal control over financial reporting is defined in Rule 13a-15(f) or 15d-15(f) promulgated under the Exchange Act as a process designed by, or under the supervision of, our principal executive and principal financial officers and effected by our Board of Directors, management, and other personnel to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with U.S.

generally accepted accounting principles and includes those policies and procedures that:

(1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the Company;

(1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of our assets;

(2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with U.S.

generally accepted accounting principles and that receipts and expenditures of the Company are being made only in accordance with

authorizations of management and directors of the Company;

and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the Company’s assets that could have a material effect on the financial statements.

generally accepted accounting principles and that our receipts and expenditures are being made only in accordance with authorizations of our management and directors of the Company;

and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of our assets that could have a material effect on the financial statements.

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements.

Projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

The Company’s management assessed the effectiveness of the Company’s internal control over financial reporting as of December 31, 2022.

In making this assessment, the Company’s management used the criteria set forth by the Committee of Sponsoring Organizations of the Treadway Commission in Internal Control-Integrated Framework (2013) .

Based on its assessment, management concluded that, as of December 31, 2022, the Company’s internal control over financial reporting was effective based on those criteria.

The Company’s independent registered public accounting firm has issued an audit report on the Company’s internal control over financial reporting as of December 31, 2022.

Under the supervision and with the participation of our management, including our Chief Executive Officer (our principal executive officer) and Chief Financial Officer (our principal financial officer), we conducted an assessment of the effectiveness of our internal control over financial reporting as of December 31, 2023.

In making this assessment, our management used the criteria set forth by the Committee of Sponsoring Organizations of the Treadway Commission in Internal Control-Integrated Framework (2013) .

Based on their assessment, our management concluded that, as of December 31, 2023, our internal control over financial reporting was effective based on those criteria.

Our independent registered public accounting firm has issued an audit report on our internal control over financial reporting as of December 31, 2023.

This report appears below.

Changes in Internal Control over Financial Reporting

There were no changes in our internal control over financial reporting (as defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act) that occurred during the three months ended December 31, 2023 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Stockholders and the Board of Directors of PC Connection, Inc.

To the shareholders and the Board of Directors of PC Connection, Inc.

Opinion on Internal Control over Financial Reporting

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March 7, 2024

Changes in Internal Control over Financial Reporting

There were no changes in our internal control over financial reporting (as defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act) that occurred during the three months ended December 31, 2022 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

Other information

Director and Officer Trading Arrangements

None of our directors or officers (as defined in Rule 16a-1(f)) adopted or terminated a Rule 10b5-1 trading agreement or a non-Rule 10b5-1 trading agreement (as defined in Item 408(c) of Regulation S-K) during the fourth quarter of 2023.

Disclosure Regarding Foreign Jurisdictions that Prevent Inspections

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Directors, Executive Officers, and Corporate Governance

In addition to the information included below, the information required by this item, which is included under the headings “Election of Directors,” “Information Concerning Directors, Nominees, and Executive Officers,” “Delinquent Section 16(a) Reports,” “Code of Business Conduct and Ethics Policy,” “Director Candidates,” and “Board Committees – Audit Committee” in our definitive Proxy Statement for our 2023 Annual Meeting of Stockholders to be filed with the SEC (the “Proxy Statement”) is incorporated herein by reference.

In addition to the information included below, the information required by this item, which is included under the headings “Election of Directors,” “Information Concerning Directors, Nominees, and Executive Officers,” “Delinquent Section 16(a) Reports,” “Code of Business Conduct and Ethics Policy,” “Director Candidates,” and “Board Committees – Audit Committee” in our definitive Proxy Statement for our 2024 Annual Meeting of Stockholders to be filed with the SEC, or Proxy Statement, is incorporated herein by reference.

With the exception of the foregoing information and other information specifically incorporated by reference into this Annual Report on Form 10-K, the Proxy Statement is not being filed as a part hereof.

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Consolidated Statements of Income

Consolidated Statements of Other Comprehensive Income

Consolidated Statement of Changes in Stockholders’ Equity

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Form of Stock Equivalent Unit Agreement for 2007 Amended and Restated Stock Incentive Plan.

Executive Bonus Plan, as amended.

Director Compensation and Executive Bonus Plan, as amended.

Employment Agreement, dated as of January 1, 1998, between the Registrant and Patricia Gallup.

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Second Amendment, dated February 10, 2017, to the Third Amended and Restated Credit and Security Agreement, among Citizens Bank of Massachusetts, as lender and as agent, other financial institutions party thereto from time to time, as lenders, PC Connection, Inc., as borrower, GovConnection, Inc., PC Connection Sales Corporation, MoreDirect, Inc., and Professional Computer Center, Inc., each as guarantors.

Amended and Restated Lease between the Registrant and G&H Post, LLC, dated December 29, 1997, for property located at Route 101A, Merrimack, New Hampshire.

Amendment No.

1 to Amended and Restated Lease between the Registrant and G&H Post, LLC, dated December 29, 1998, for property located at Route 101A, Merrimack, New Hampshire.

Amendment No.

2 to Amended and Restated Lease between the Registrant and G&H Post, LLC, dated December 29, 1998, for property located at Route 101A, Merrimack, New Hampshire.

Amendment No.

3, dated May 9, 2014, to Amended and Restated Lease between the Registrant and G&H Post, LLC, dated December 29, 1998, for property located at Route 101A, Merrimack, New Hampshire.

Lease between the Merrimack Services Corporation and G&H Post LLC, dated August 11, 2008, for property located at Merrimack, New Hampshire.

Lease Agreement between the Registrant and Wilmington Investors, LLC, dated August 27, 2014, for property located at 3188 Progress Way, Building 11, Wilmington, Ohio.

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and Thomas Baker, as amended.

Fourth Amendment, dated June 13, 2023, to the Third Amended and Restated Credit and Security Agreement, among Citizens Bank of Massachusetts, as lender and as agent, other financial institutions

party thereto from time to time, as lenders, PC Connection, Inc., as borrower, GovConnection, Inc., PC Connection Sales Corporation, MoreDirect, Inc., and Professional Computer Center, Inc., each as guarantors.

Subsidiaries of Registrant.

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Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

Clawback Policy.

Inline XBRL Instance Document* - The Instance document does not appear in the interactive data file because its XBRL tags are embedded within the inline XBRL document.

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(1) Incorporated by reference from the exhibits filed with the Company’s registration statement (333-63272) on Form S-4 filed under the Securities Act of 1933.

(2) Incorporated by reference from exhibits filed with the Company’s annual report on Form 10-K, File Number 0-23827, filed on March 31, 1999.

(2) Incorporated by reference from exhibits filed with the Company’s current report on Form 8-K, filed on January 9, 2008.

(3) Incorporated by reference from the exhibits filed with the Company’s registration statement (333-41171) on Form S-1 filed under the Securities Act of 1933.

(4) Incorporated by reference from exhibits filed with the Company's annual report on Form 10-K, filed on February 6, 2020.

(5) Incorporated by reference from exhibits filed with the Company's quarterly report on Form 10-Q, filed on August 2, 2023.

(5) Incorporated by reference from exhibits filed with the Company’s current report on Form 8-K, filed on January 9, 2008.

(6) Incorporated by reference from exhibits filed with the Company's quarterly report on Form 10-Q, filed on May 12, 2008.

(6) Incorporated by reference from Appendix A filed with the Company’s proxy statement pursuant to Section 14(a), File Number 0-23827, filed on April 9, 2019.

(7) Incorporated by reference from exhibits filed with the Company's annual report on Form 10-K, filed on March 6, 2023.

(8) Incorporated by reference from exhibits filed with the Company's quarterly report on Form 10-Q, filed on August 10, 2007.

(8) Incorporated by reference from exhibits filed with the Company’s annual report on Form 10-K, File Number 0-23827, filed on March 16, 2009.

(9) Incorporated by reference from exhibits filed with the Company's quarterly report on Form 10-Q, filed on November 10, 2010.

(10) Incorporated by reference from exhibits filed with the Company’s annual report on Form 10-K, File Number 0-23827, filed on February 28, 2012.

(10) Incorporated by reference from exhibits filed with the Company's quarterly report on Form 10-Q, filed on August 8, 2012.

(11) Incorporated by reference from exhibits filed with the Company's quarterly report on Form 10-Q, filed on May 4, 2023.

(13) Incorporated by reference from Appendix A filed with the Company’s proxy statement pursuant to Section 14(a), File Number 0-23827, filed on April 9, 2019.

(14) Incorporated by reference from exhibits filed with the Company's quarterly report on Form 10-Q, filed on October 31, 2014.

(15) Incorporated by reference from exhibits filed with the Company’s current report on Form 8-K, filed on February 16, 2017.

(12) Incorporated by reference from exhibits filed with the Company's quarterly report on Form 10-Q, filed on May 12, 2008.

(13) Incorporated by reference from exhibits filed with the Company’s annual report on Form 10-K, File Number 0-23827, filed on February 28, 2012.

(14) Incorporated by reference from exhibits filed with the Company's annual report on Form 10-K, File Number 0-23827, filed on March 3, 2017.

(15) Incorporated by reference from exhibits filed with the Company’s current report on Form 8-K, filed on February 16, 2017.

(16) Incorporated by reference from exhibits filed with the Company's quarterly report on Form 10-Q, filed on October 31, 2014.

(17) Incorporated by reference from exhibits filed with the Company's quarterly report on Form 10-Q, filed on May 2, 2019.

(18) Incorporated by reference from exhibits filed with the Company's quarterly report on Form 10-Q, filed on October 30, 2019.

(19) Incorporated by reference from exhibits filed with the Company's quarterly report on Form 10-K, filed on February 6, 2020.

(19) Incorporated by reference from exhibits filed with the Company's annual report on Form 10-K, filed on March 16, 2021.

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Management contract or compensatory plan or arrangement.

** Management contract or compensatory plan or arrangement and submitted electronically herewith.

Submitted electronically herewith.

Attached as Exhibit 101 to this report are the following formatted in XBRL (Extensible Business Reporting Language):

(i) Consolidated Balance Sheets at December 31, 2022 and December 31, 2021, (ii) Consolidated Statements of Income for the years ended December 31, 2022, 2021, and 2020, (iii) Consolidated Statements of Changes in Stockholders’ Equity for the years ended December 31, 2022, 2021, and 2021, (iv) Consolidated Statements of Cash Flows for the years ended December 31, 2022, 2021, and 2020, and (v) Notes to Consolidated Financial Statements.

(i) Consolidated Balance Sheets at December 31, 2023 and December 31, 2022, (ii) Consolidated Statements of Income for the years ended December 31, 2023, 2022, and 2021, (iii) Consolidated Statements of Other Comprehensive Income for the years ended December 31, 2023, 2022, and 2021, (iv) Consolidated Statements of Changes in Stockholders’ Equity for the years ended December 31, 2023, 2022, and 2021, (v) Consolidated Statements of Cash Flows for the years ended December 31, 2023, 2022, and 2021, and (vi) Notes to Consolidated Financial Statements.

Attached as Exhibit 104 to this report is the Cover Page Interactive Data File (embedded within the Inline XBRL document).

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Consolidated Statements of Income for the years ended December 31, 2023, 2022, and 2021

Consolidated Statements of Other Comprehensive Income for the years ended December 31, 2023, 2022, and 2021

Consolidated Statements of Changes in Stockholders’ Equity for the years ended December 31, 2023, 2022, and 2021

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REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Stockholders and the Board of Directors of PC Connection, Inc.

To the shareholders and the Board of Directors of PC Connection, Inc.

Opinion on the Financial Statements

We have audited the accompanying consolidated balance sheets of PC Connection, Inc.

and subsidiaries (the "Company") as of December 31, 2022 and 2021, the related consolidated statements of income, changes in shareholders' equity, and cash flows, for each of the three years in the period ended December 31, 2022, and the related notes and the schedule listed in the Index at Item 15 (collectively referred to as the "financial statements").

and subsidiaries (the "Company") as of December 31, 2023 and 2022, the related consolidated statements of income, comprehensive income, changes in shareholder’s equity, and cash flows, for each of the three years in the period ended December 31, 2023, and the related notes and the schedule listed in the Index at Item 15 (collectively referred to as the "financial statements").

In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2023 and 2022, and the results of its operations and its cash flows for each of the three years in the period ended December 31, 2023, in conformity with accounting principles generally accepted in the United States of America.

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The communication of critical audit matters does not alter in any way our opinion on the financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the accounts or disclosures to which it relates.

Revenue — Refer to Notes 1 and 2 to the financial statements

Revenue — Refer to Note 2 to the financial statements

Critical Audit Matter Description

As described in Note 1 to the consolidated financial statements, the Company recognizes revenue upon transfer of control of promised products or services to customers in an amount that reflects the consideration the Company expects to receive in exchange for those products or services.

Significant judgment is exercised by the Company in determining revenue recognition for customer agreements, and includes the following:

● Determination of whether products and services are considered distinct performance obligations that should be accounted for separately versus together, such as hardware, software and maintenance products as well as services related to the installation or implementation of products.

● As a reseller, the determination if the Company is the principal or the agent for each performance obligation, which impacts whether the related revenue for each performance obligations is recognized on a gross or net basis.

● The timing of transfer of control for each distinct performance obligation and the identification of contract terms that may impact the timing and amount of revenue recognized.

Given these factors and due to the volume of transactions, the related audit effort in evaluating management's judgments in determining revenue recognition for these customer agreements was extensive and required a high degree of auditor judgment.

As described in Note 2 to the consolidated financial statements, the Company recognizes revenue when control is transferred to the customer.

The amount of revenue recognized by the Company is dependent upon whether the Company is the principal in the transaction whereby revenue is recorded on a gross basis or the agent whereby the revenue is reported net.

The Company applies judgement to determine if the Company is the principal or the agent in the transaction.

The Company has determined that in general they are the principal in providing hardware products and on-premise software products, and that they are the agent in providing cloud-based software products and maintenance products.

This determination is based on certain factors such as whether the Company controls the goods or services before they are transferred to the customer, whether the Company is primarily responsible for fulfilling the promise to provide the good or service, the inventory risk associated with the transaction, and the discretion in establishing price for good or service.

Given these factors and due to the volume of transactions, the related audit effort in evaluating management's judgments in determining principal versus agent determination for these customer agreements was extensive and required a high degree of auditor judgment.

How the Critical Audit Matter Was Addressed in the Audit

Our principal audit procedures related to the Company's revenue recognition for these customer agreements included the following:

● We evaluated management's significant accounting policies related to these customer agreements.

● We selected a sample of customer contracts and performed the following procedures:

● Obtained and read contract source documents for each selection, including master agreements, and other documents that were part of the agreement.

● Tested management's identification and treatment of contract terms.

● Assessed the terms in the customer agreement and evaluated the appropriateness of management's application of their accounting policies, along with their use of estimates, in the determination of revenue recognition conclusions.

We selected a sample of products and services sold and performed an evaluation of the Company’s determination of principal versus agent.

● We selected a sample of orders shipped at year end and evaluated whether revenue has been properly recognized by comparing the products shipped to the respective contract or customer purchase order if applicable and evidence of transfer of control.

● We tested the effectiveness of controls over management’s principal versus agent determination for each performance obligation including those over the determination of the fulfillment type and on or off premise delivery.

● We evaluated management's significant accounting policies and judgements related to principal versus agent determinations.

● We selected a sample of transactions and related customer agreement and performed the following procedures:

o Obtained and read contract source documents for each selection, including master agreements, customer purchase orders, and other documents that were part of the agreement and evaluated the nature of the product or services.

o Assessed the terms in the customer agreement and evaluated the appropriateness of management's judgement, application of their accounting policies, along with their use of estimates, in the determination of revenue recognition conclusions including an evaluation of the Company’s determination of product fulfillment type, on or off premise determination and determination of principal versus agent.

/s/ Deloitte & Touche LLP

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Cash and cash equivalents

Short-term investments

Accounts receivable, net

Inventories, net

Income taxes receivable

Prepaid expenses and other current assets

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Retained earnings

Accumulated other comprehensive income

Treasury stock at cost, 2,902 and 2,773 shares at December 31, 2023 and 2022, respectively

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AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF OTHER COMPREHENSIVE INCOME

(amounts in thousands)

Years Ended December 31,

Other comprehensive income:

Unrealized gains on available-for-sale investments, net of tax of $( 22 )

Comprehensive income

See notes to consolidated financial statements

PC CONNECTION, INC.

AND SUBSIDIARIES

CONSOLIDATED STATEMENT OF CHANGES IN STOCKHOLDERS’ EQUIT Y

(amounts in thousands)

Accumulated Other

Treasury Shares

Comprehensive Income

Balance - December 31, 2020

Issuance of common stock under Employee Stock Purchase Plan

Stock-based compensation expense

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Shares withheld for taxes paid on stock awards

Repurchase of common stock for treasury

Dividend declaration

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Shares withheld for taxes paid on stock awards

Repurchase of common stock for treasury

Issuance of common stock under Employee Stock Purchase Plan

Dividend declaration

Other comprehensive income, net of tax

Balance - December 31, 2023

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Deferred income taxes

Gain from life insurance

Amortization of discount on short-term investments

Loss (gain) on disposal of fixed assets

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Cash Flows used in Investing Activities:

Purchases of short-term investments

Purchases of equipment and capitalized software

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Cash and cash equivalents, beginning of year

Cash and cash equivalents, end of period

Cash and cash equivalents, end of year

Non-cash Investing and Financing Activities:

Accrued capital expenditures

Dividend declarations

Life insurance recorded as receivable

Accrued excise tax on treasury purchases

Supplemental Cash Flow Information:

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PC Connection, Inc.

is a Fortune 1000 Global Solutions Provider that simplifies the IT customer experience, guiding the connection between people and technology.

is a Fortune 1000 Global Solutions Provider that simplifies the information technology, or IT, customer experience, guiding the connection between people and technology.

The Company’s dedicated account managers partner with customers to design, deploy, and support cutting-edge IT environments using the latest hardware, software, and services.

The Company provides a wide range of IT solutions, from the desktop to the cloud—including computer systems, data center solutions, software and peripheral equipment, networking communications, and other products and accessories that the Company purchases from manufacturers, distributors, and other suppliers.

The Company also offers comprehensive portfolio of managed services and professional services.

In 2023, the Company restructured and combined its Technology Solutions Group and Technical Sales Organization into one organization to be referred to as the Technology Solutions Organization, or TSO.

The Company’s TSO and state-of-the-art Technology Integration and Distribution Center with ISO 9001:2015 certified technical configuration lab offer end-to-end services related to the design, configuration, and implementation of IT solutions.

The Company also provides a comprehensive portfolio of managed services and professional services.

These services are performed by the Company’s personnel and by third-party providers.

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● Connection Enterprise Solutions – serving large enterprise customers

● Connection Business Solutions – serving SMBs

● Connection Business Solutions – serving small to medium-sized businesses, or SMBs

● Connection Public Sector Solutions – serving federal, state, and local government and educational institutions

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In most instances, when several performance obligations are aggregated into one single transaction, these performance obligations are fulfilled at the same point in time.

The Company accounts for an arrangement when it has approval and commitment from both parties, the rights are identified, the contract has commercial substance, and collectability of consideration is probable.

The Company accounts for an arrangement when it has approval and commitment from both parties, the rights are

identified, the contract has commercial substance, and collectability of consideration is probable.

The Company generally obtains oral or written purchase authorizations from its customers for a specified amount of product at a specified price, which constitutes an arrangement.

Revenue is recognized at the amount expected to be collected, net of any taxes collected from customers, which are subsequently remitted to governmental authorities.

generally invoices for its products at the time of shipping, and accordingly there is not a significant financing component included in its arrangements.

The Company generally invoices for its products at the time of shipping, and accordingly there is not a significant financing component included in its arrangements.

Cost of Sales and Certain Other Costs

Cost of sales includes the invoice cost of the product, direct employee and third-party cost of services, direct costs of packaging, inbound and outbound freight, and provisions for inventory obsolescence, adjusted for discounts, rebates, and other vendor allowances.

Cash and Cash Equivalents

Cash and Cash Equivalents and Investments

The Company considers all highly liquid short-term investments with original maturities of 90 days or less to be cash equivalents.

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Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date.

The accounting guidance includes a fair value hierarchy that priorities the inputs to valuation techniques used to measure fair value.

The three levels of the fair value hierarchy are as follows:

Quoted prices for identical assets or liabilities in active markets;

Observable inputs other than those described as Level 1;

Unobservable inputs that are supportable by little or no market activities and are based on significant assumptions and estimates.

The Company’s money market funds are valued at the closing price reported by the fund sponsor from an actively traded exchange.

It is included as cash equivalents within the Company’s consolidated balance sheet and is categorized as a level 1 measurement.

The majority of payments due from credit card processors and banks for third-party credit card and debit card transactions process within one to five business days.

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Amounts due from banks for credit card transactions classified as cash equivalents totaled $ 3,839 and $ 6,862 at December 31, 2023 and 2022, respectively.

At the time of purchase, the Company determines the appropriate classification of investments based upon its intent with regard to such investments.

All of the Company’s investments are classified as available-for-sale.

The Company classifies investments as short-term when their remaining contractual maturities are one year or less from the balance sheet date, and as long-term when the investment has a remaining contractual maturity of more than one year from the balance sheet date.

The Company records investments at fair value with unrealized gains and losses recorded as a component of accumulated other comprehensive income on the consolidated balance sheets.

Included in other income, net on the consolidated statements of income is interest income on cash equivalents and short-term investments of $ 9,983 and $ 1,056 for the years ended December 31, 2023 and 2022, respectively.

Interest income on cash equivalents and short-term investments was less than $ 1 for the year ended December 31, 2021.

Accounts Receivable

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Vendors have the ability to fund advertising activities for which the Company receives advertising consideration.

This vendor consideration, to the extent that it represents specific reimbursements of incremental and identifiable costs, is offset against SG&A expenses.

This vendor consideration, to the extent that it represents specific reimbursements of incremental and identifiable costs, is offset against selling, general and administrative, or SG&A, expenses.

Advertising consideration that cannot be associated with a specific program or that exceeds the fair value of advertising expense associated with that program is classified as an offset to cost of sales.

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Other advertising costs are expensed as incurred.

Advertising expense, which is classified as a component of SG&A expenses, totaled $ 20,155 , $ 15,827 , and $ 14,021 for the years ended December 31, 2022, 2021, and 2020, respectively.

Advertising expense, which is classified as a component of SG&A expenses on the consolidated statements of income, totaled $ 22,400 , $ 20,155 , and $ 15,827 for the years ended December 31, 2023, 2022, and 2021, respectively.

Property and Equipment

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Concentrations of credit risk with respect to trade account receivables are limited due to the large number of customers comprising the Company’s customer base.

No single customer accounted for more than 4 % of total net sales in 2022, 2021, and 2020.

No single customer accounted for 10% or more of total net sales in 2023, 2022, and 2021.

Product purchases from Ingram Micro, Inc., TD Synnex Corporation, and Microsoft Corporation accounted for approximately 21 %, 19 %, and 11 %, respectively, of the Company’s total product purchases in 2023.

Product purchases from Ingram Micro, Inc., TD Synnex Corporation, and Dell Inc.

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accounted for approximately 23 %, 23 %, and 12 %, respectively, of the Company’s total product purchases in 2021.

Product purchases from Ingram Micro, Inc., TD Synnex Corporation and HP Inc.

accounted for approximately 21 %, 15 % and 12 % respectively, of the Company’s total product purchases in 2020.

No other singular vendor supplied more than 10% of the Company’s total product purchases in 2023, 2022, and 2021.

The Company believes that, while it may experience some short-term disruption if products from Ingram Micro, Inc., TD Synnex Corporation, Dell Inc., and HP Inc., or any of these vendors become unavailable to it, alternative sources are available.

Products manufactured by HP Inc.

collectively represented approximately 14 %, 15 % and 18 % of the Company’s net sales in 2022, 2021 and 2020, respectively.

In the event the Company experiences either a short-term or permanent disruption of supply of HP products, such disruption would likely have a material adverse effect on the Company’s results of operations and cash flows.

The Company believes that, while it may experience some short-term disruption if products from Ingram Micro, Inc., TD Synnex Corporation, Microsoft Corporation, Dell Inc., or any of these vendors become unavailable to it, alternative sources are available.

Products manufactured by Microsoft Corporation, HP Inc., and Dell Inc.

represented approximately 15 %, 13 %, and 11 %, respectively, of our total product purchases in 2023.

Products manufactured by HP Inc., Dell Inc., Microsoft Corporation, and Lenovo represented approximately 14 %, 13 %, 12 %, and 11 % of our total product purchases in 2022.

Products manufactured by HP Inc., Dell Inc., Microsoft Corporation, and Lenovo represented approximately 15 %, 14 %, 11 %, and 10 % of our total product purchases in 2021.

No other singular product manufacturer produced more than 10% of our total product purchases in 2023, 2022, and 2021.

In the event the Company experiences either a short-term or permanent disruption of supply of Microsoft Corporation, HP Inc., or Dell Inc.

products, such disruption would likely have a material adverse effect on the Company’s results of operations and cash flows.

Restructuring and Other charges

Restructuring and other charges are presented separately from SG&A expenses.

In the year ended December 31, 2020, the Company undertook actions across the business to lower its cost structure and align its business in an effort to improve its ability to execute its strategy.

In connection with these restructuring initiatives, the Company incurred restructuring and related costs of $ 1.0 million for the year ended December 31, 2020.

There were no restructuring related costs incurred for the years ended December 31, 2022 or 2021.

The restructuring and other charges recorded for the year ended December 31, 2023 were primarily related to an involuntary reduction in our headquarter workforce and included cash severance and other related termination benefits.

These costs will be paid within a year of termination and any unpaid balances are included in accrued expenses and other liabilities in the consolidated balance sheets as of December 31, 2023.

The Company is currently evaluating additional restructuring activities for 2024 and beyond.

Costs incurred for restructuring and other chargers were as follows (in thousands):

Year Ended December 31,

Employee separations

Other charges

Total restructuring and other charges

Included in accrued expenses and other liabilities on the consolidated balance sheets as of December 31, 2023 was $ 324 related to unpaid employee separation benefits.

Earnings Per Share

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Recently Issued Financial Accounting Standards

In March 2020, the Financial Accounting Standards Board issued Accounting Standards Update (ASU) 2020-04, Reference Rate Reform (Topic 848) :

In March 2020, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) 2020-04, Reference Rate Reform (Topic 848) :

Facilitation of the Effects of Reference Rate Reform on Financial Reporting.

This guidance provides temporary optional expedients and exceptions to the U.S.

GAAP guidance on contract modifications and hedge accounting to ease the financial reporting burdens of the expected market transition from LIBOR, and other interbank offered rates to alternative reference rates, such as the Secured Overnight Financing Rate, or SOFR.

GAAP guidance on contract modifications and hedge accounting to ease the financial reporting burdens of the expected market transition from the London Interbank Offered Rate, or LIBOR, and other interbank offered rates to alternative reference rates, such as the Secured Overnight Financing Rate.

This ASU is applied prospectively and becomes effective immediately upon the transition from LIBOR.

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Deferral of the Sunset Date of Topic 848 has extended the effective date through December 31, 2024.

The Company is currently evaluating the effect of the adoption of this standard on the Company, but does not believe the adoption will have a material effect on its consolidated financial statements.

The Company adopted this standard for the fiscal year ended December 31, 2023.

The adoption of this ASU along with the related expedients did not have an impact to the Company’s consolidated financial statements.

In November 2023, the FASB issued ASU 2023-07, Segment Reporting (Topic 280):

Improvements to Reportable Segment Disclosures.

This guidance is intended to improve segment reporting disclosures on both an interim and annual basis, primarily through enhanced disclosures about significant segment expenses.

This ASU is effective for the Company’s annual reporting periods beginning January 1, 2024, and for interim reporting periods beginning January 1, 2025, with early adoption permitted.

The Company is currently evaluating the impact of the adoption of this standard on its consolidated financial statement disclosures.

In December 2023, the FASB issued ASU 2023-09, Income Taxes (Topic 740):

Improvements to Income Tax Disclosures.

This guidance is intended to improve the transparency of income tax disclosures through, among other things, enhancement of the disclosure requirements within the rate reconciliation, as well as increased income tax disaggregation disclosures.

This ASU is effective for the Company’s annual reporting periods beginning January 1, 2025, with early adoption permitted.

The Company is currently evaluating the impact of the adoption of this standard on its consolidated financial statement disclosures.

Nature of Products and Services

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Software maintenance conveys rights to updates, bug fixes and help desk support, and other support services transferred over the underlying contract period.

On-premise licenses are considered distinct performance obligations when sold with the software maintenance, as the Company sells these items separately.

On-premise licenses are considered distinct performance obligations when sold with the

software maintenance, as the Company sells these items separately.

The Company recognizes revenue related to the software maintenance as the agent in these transactions because it does not have control over the on-going software maintenance service.

Revenue allocated to software maintenance is recognized at the point in time when the Company’s vendor and customer accept the terms and conditions in the sales arrangements.

Certain of the Company’s larger customers are offered the opportunity by vendors to purchase software licenses and maintenance under EAs.

Certain of the Company’s larger customers are offered the opportunity by vendors to purchase software licenses and maintenance under enterprise agreements, or EAs.

Under EAs, customers are considered to be compliant with applicable license requirements for the ensuing year, regardless of changes to their employee base.

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The Company’s vendors typically dictate how the EA will be sold to the customer.

The Company also offers ESPs on IT products, both as part of the initial arrangement and separately from the IT products.

The Company also offers extended service plans, or ESPs, on IT products, both as part of the initial arrangement and separately from the IT products.

The Company recognizes revenue related to ESPs as the agent in the transaction because it does not have control over the on-going ESPs service and does not provide any service after the sale.

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Determining whether the Company is the agent or the principal and whether products and services are considered distinct performance obligations that should be accounted for separately versus together may require significant judgment.

The Company estimates the SSP for each distinct performance obligation when a single arrangement contains multiple performance obligations and the fulfillment occurs at different points of times.

The Company estimates the standalone selling price, or SSP, for each distinct performance obligation when a single arrangement contains multiple performance obligations and the fulfillment occurs at different points in time.

The Company maximizes the use of observable inputs in the determination of the estimate for SSP for the items that it does not sell separately, including on-premise licenses sold with software maintenance, and IT products sold with ESPs.

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The Company makes estimates of product returns based on significant historical experience.

The Company records its sales return reserve as a reduction of revenues and either as reduction of accounts receivable or, for customers who have already paid, as accrued expenses and as a reduction of cost of sales and an associated right of return asset.

The Company records its sales

return reserve as a reduction of revenues and either as reduction of accounts receivable or, for customers who have already paid, as accrued expenses and as a reduction of cost of sales and an associated right of return asset.

Description of Revenue

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December 31, 2022

Contract liabilities, which are included in "Accrued expenses and other liabilities"

Changes in the contract liability balances during the years ended December 31, 2023 and 2022 are as follows (in thousands):

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Balance at December 31, 2022

FAIR VALUE MEASUREMENTS

Cash equivalents and short-term investments consist of the following (in thousands):

December 31, 2023

Amortized Cost

Unrealized Gains

Unrealized Losses

Cash equivalents:

Money market funds

Short-term investments:

Government treasury securities

December 31, 2022

Amortized Cost

Unrealized Gains

Unrealized Losses

Cash equivalents:

Money market funds

Investments with maturities of 90 days or less from the date of purchase are classified as cash equivalents;

investments with maturities of greater than 90 days from the date of purchase but less than one year are generally classified as short-term investments;

and investments with maturities of one year or greater from the date of purchase are generally classified as long-term investments.

All short-term investments had stated maturity dates of less than one year.

The Company has recorded the securities at fair value in its consolidated balance sheets and unrealized gains and losses are reported as a component of accumulated other comprehensive income.

The amount of realized gains and losses reclassified into earnings and the related adjustments to deferred taxes are based on the specific identification of the securities sold or securities that reached maturity date.

The Company measures certain financial assets at fair value.

Fair value is determined based upon the exit price that would be received to sell an asset in an orderly transaction between market participants, as determined by either the principal market or the most advantageous market.

Inputs used in the valuation techniques are classified based on a three-level hierarchy, as follows:

● Level 1 inputs:

Quoted prices for identical assets or liabilities in active markets;

● Level 2 inputs:

Observable inputs other than those described as Level 1;

● Level 3 inputs:

Unobservable inputs that are supportable by little or no market activities and are based on significant assumptions and estimates.

As of December 31, 2023 and 2022, the fair value of the Company’s cash equivalents and short-term investments were all measured using level 1 inputs.

GOODWILL AND OTHER INTANGIBLE ASSETS

Goodwill is held by the Company’s Business Solutions and Enterprise Solutions segments.

Goodwill is held by the Company’s Enterprise Solutions and Business Solutions segments.

Goodwill and intangible assets with indefinite lives are subject to an annual impairment test as of November 30 and tested more frequently if events or circumstances occur that would indicate a potential decline in fair value.

In 2023 and 2022, the Company performed a qualitative “step 0” analysis.

ASC 350— Intangible – Goodwill and Other states that an entity may assess qualitative factors to determine whether it is more likely than not that the fair value of a reporting unit is less than its carrying amount, including goodwill.

Accounting Standards Codification 350— Intangible – Goodwill and Other states that an entity may assess qualitative factors to determine whether it is more likely than not that the fair value of a reporting unit is less than its carrying amount, including goodwill.

This analysis allows the Company to consider qualitative factors that might impact the carrying amount of its goodwill to determine whether a more detailed quantitative analysis would be necessary.

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The Company leases certain facilities from a related party, which is affiliated with the Company through common ownership.

Included in the right-of-use assets as of December 31, 2022 was $ 1,130 and a corresponding lease liability of $ 1,130 associated with related party leases.

As of December 31, 2023, the Company had no leases that were classified as financing leases and there were no additional operating or financing leases that have not yet commenced.

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Accrued expenses and other liabilities

GAIN ON LIFE INSURANCE

The Company owns and is the beneficiary of one life insurance policy on Patricia Gallup, the Company’s Chair and Chief Administrative Officer.

This policy had a total cash value recorded as “Other assets” on the Company’s balance sheet of approximately $ 274 and $ 200 as of December 31, 2022 and December 31, 2021 respectively.

On November 14, 2020, David Hall, one of the Company co-founders and a member of the Company’s Board of Directors passed away.

The Company owned and was the beneficiary of two life insurance policies on Mr.

After the death of Mr.

Hall, $ 1,500 was recorded as receivable on the Company’s balance sheet in 2020.

The difference between the total insurance proceeds and the cash surrender value of the policies was $ 1,061 , which was recorded as non-operating income for the year ended December 31, 2020.

The life insurance proceeds were received in 2021, which are not subject to federal or state income taxes.

BANK BORROWINGS

The Company has a $ 50,000 credit facility collateralized by its account receivables that expires March 31, 2025 .

This facility can be increased, at the Company’s option, to $ 80,000 for permitted acquisitions or other uses authorized by

the lender on substantially the same terms.

Amounts outstanding under this facility bear interest at the one-month LIBOR, plus a spread based on the Company’s funded debt ratio, or in the absence of LIBOR, the prime rate ( 7.50 % at December 31, 2022).

This facility can be increased, at the Company’s option, to $ 80,000 for permitted acquisitions or other uses authorized by the lender on substantially the same terms.

Amounts outstanding under this facility bear interest at the daily Bloomberg Short-Term Bank Yield Index, or BSBY Rate, plus a spread based on the Company’s funded debt ratio, or in the absence of BSBY Rate, the prime rate ( 8.50 % at December 31, 2023).

The credit facility includes various customary financial ratios and operating covenants, including minimum net worth and maximum funded debt ratio requirements, and default acceleration provisions.

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The maximum allowable funded debt ratio under the agreement is 2.0 to 1.0.

Decreases in the Company’s consolidated Adjusted EBITDA could limit its potential borrowing capacity under the credit facility.

During 2022, the Company borrowed an aggregate of $ 36,463 under the credit facility during the year ended December 31, 2022, which was fully repaid prior to December 31, 2022.

The Company had no outstanding bank borrowings as of December 31, 2022 or 2021, and accordingly, the entire $ 50,000 facility was available for borrowings under the credit facility.

As of December 31, 2022, the Company was in compliance with all financial covenants contained in the agreement governing the credit facility.

Decreases in the Company’s consolidated twelve months Adjusted EBITDA could limit its potential borrowing capacity under the credit facility.

As of December 31, 2023, the Company was in compliance with the covenants of the credit facility.

Cash receipts are automatically applied against any outstanding borrowings.

During the years ended December 31, 2023 and 2022, the Company borrowed incremental amounts that were each repaid in full.

These borrowings for the years ended December 31, 2023 and 2022 totaled $ 88,198 and $ 36,463 , respectively;

however, at no time were the outstanding borrowings greater than the $ 50,000 limit under the credit facility.

The Company had no outstanding borrowings under the credit facility as of December 31, 2023 or 2022, and accordingly, the entire $ 50,000 credit facility was available for borrowings on such date.

STOCKHOLDERS’ EQUITY AND SHARE-BASED COMPENSATION

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Share Repurchase Authorization

As of December 31, 2017, there was $ 30.0 million authorized for share repurchase.

In 2018, the Company’s Board approved a share repurchase program authorizing up to $ 25.0 million in additional share repurchases.

In November 2022, the Company’s Board approved a $ 25.0 million increase to the Company’s existing share repurchase authorization, bringing the aggregate size of the share repurchase program to $ 80.0 million as of December 31, 2022.

As of December 31, 2017, there was $ 30,000 authorized for share repurchase.

In 2018, the Company’s Board approved a share repurchase program authorizing up to $ 25,000 in additional share repurchases.

In November 2022, the Company’s Board approved a $ 25,000 increase to the Company’s existing share repurchase authorization, bringing the aggregate size of the share repurchase program to $ 80,000 as of December 31, 2023.

There is no fixed termination date for this repurchase program.

Purchases may be made in open-market transactions, block transactions on or off an exchange, or in privately negotiated transactions.

Purchases may be made in open-market transactions, block transactions on or off an

exchange, or in privately negotiated transactions.

The timing and amount of any share repurchases will be based on market conditions and other factors.

The Company repurchased 129 shares for $ 5,446 during the year ended December 31, 2023 under the Board-authorized repurchase program.

Such cost reflects the applicable one percent excise tax imposed by the Inflation Reduction Act of 2022 on the net value of certain stock repurchases made after December 31, 2022.

There were no share repurchases during the years ended December 31, 2022 and 2021.

The Company repurchased 247 shares for $ 10.2 million during the year ended December 31, 2020 under Board-authorized repurchase programs.

As of December 31, 2022, the Company has repurchased an aggregate of 2,599 shares for $ 42.3 million under Board-authorized repurchase programs, and the maximum approximate dollar value of shares that may yet be purchased under the Company’s existing Board-authorized program is $ 37.7 million.

As of December 31, 2023, the Company has repurchased an aggregate of 2,728 shares for $ 47,700 under the Board-authorized repurchase program, and the maximum approximate dollar value of shares that may yet be purchased under the Company’s existing Board-authorized program is $ 32,300 .

Dividend Payments

The following table summarizes the Company’s special cash dividends declared in the years ended December 31, 2022, 2021 and 2020 (in thousands, except per share data):

The following table summarizes the Company’s quarterly cash dividends declared during the year ended December 31, 2023 (in thousands, except per share data):

Dividend per Share

Stockholder record date

Declaration Date

Total Dividend

February 9, 2023

February 21, 2023

March 10, 2023

August 2, 2023

August 15, 2023

September 1, 2023

October 31, 2023

November 14, 2023

December 1, 2023

For the year ended December 31, 2022, the Company declared a special cash dividend of $ 0.34 per share.

The total cash payment of $ 8,948 was made on December 23, 2022 to stockholders of record at the close of business on December 5, 2022 .

For the year ended December 31, 2021, the Company declared a special cash dividend of $ 1.00 per share.

The total cash payment of $ 26,224 was made on December 3, 2021 to stockholders of record at the close of business on November 18, 2021 .

Declaration of any future cash dividends will depend upon the Company’s financial position, strategic plans, and general business conditions.

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1997 Employee Stock Purchase Plan

In November 1997, the Board adopted and the Company’s stockholders approved the 1997 Employee Stock Purchase Plan (the “Purchase Plan”).

The Purchase Plan authorizes the issuance of common stock to participating employees.

Under the Purchase Plan, as amended, employees are eligible to purchase Company stock at 95 % of the purchase price as of the last business day of each six-month offering period.

In May 2022, the Board adopted and the Company’s stockholders approved an amendment to the Purchase Plan, which reserved an aggregate of 1,303 shares of common stock for issuance under the Purchase Plan, of which 1,200 shares have been purchased as of December 31, 2022.

In November 1997, the Board adopted and the Company’s stockholders approved the 1997 Employee Stock Purchase Plan (the “Employee Stock Purchase Plan”).

The Employee Stock Purchase Plan authorizes the issuance of common stock to participating employees.

Under the Employee Stock Purchase Plan, as amended, employees are eligible to purchase Company stock at 95 % of the purchase price as of the last business day of each six-month offering period.

In May 2022, the Board adopted and the Company’s stockholders approved an amendment to the Employee Stock Purchase Plan, which reserved an aggregate of 1,303 shares of common stock for issuance under the Employee Stock Purchase Plan, of which 1,221 shares have been purchased as of December 31, 2023.

Accounting for Share-Based Compensation

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The Company values grants with multiple vesting periods as a single award, estimates expected forfeitures based upon historical patterns of employee turnover, and records share-based compensation as a component of SG&A expenses.

The following table summarizes the share-based compensation expenses included in the consolidated statements of net income (in thousands):

The following table summarizes the share-based compensation expenses included in the consolidated statements of income (in thousands):

Pre-tax expense for nonvested units

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Recipients of nonvested stock units do not possess stockholder rights.

The fair value of nonvested stock

units is based on the end of day market value of the Company’s common stock on the grant date.

The fair value of nonvested stock units is based on the end of day market value of the Company’s common stock on the grant date.

The following table summarizes the Company’s nonvested stock unit activity in 2023 (shares in thousands):

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The fair value of these liability awards is based on the closing market price of the Company’s common stock and is remeasured at the end of each reporting period until the SEUs vest.

The Company reports the compensation as a component of SG&A expense and the related liability as accrued payroll on the consolidated balance sheets.

The Company reports the compensation as a component of SG&A expense on the consolidated statements of income and the related liability as accrued payroll on the consolidated balance sheets.

Compensation expense

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Operating lease liability

Qualified research expenses

Compensation under non-statutory stock option agreements

Capitalized research and development

Stock-based compensation

State tax loss carryforwards

State tax credit carryforwards

Total gross deferred tax assets

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The Company has deferred tax assets from state net operating loss carryforwards aggregating $ 1,192 as of December 31, 2023 representing state tax benefits, net of federal taxes, of approximately $ 941 .

These loss carryforwards are subject to five , fifteen , or twenty-year carryforward periods, with $ 2 expiring in 2023, $ 4 expiring in 2024, $ 4 expiring in 2025, $ 33 expiring in 2026, $ 7 expiring in 2027, $ 1,210 expiring beyond 2027, and $ 197 with no expiration.

These loss carryforwards are subject to three , five , fifteen , twenty-year , or indefinite carryforward periods, with $ 2 expiring in 2024, $ 30 expiring in 2025, $ 63 expiring in 2026, $ 9 expiring in 2027, $ 5 expiring in 2028, $ 909 expiring beyond 2028, and $ 174 with no

The Company has provided valuation allowances of $ 868 and $ 1,064 as of December 31, 2023 and 2022, respectively, against the state tax loss carryforwards, representing the portion of carryforward losses that the Company believes are not likely to be realized.

The net change in the total valuation allowance reflects a $ 110 decrease and a $ 232 increase in 2022 and 2021, respectively.

The Company also has New Hampshire Business Enterprise credits of $ 921 .

These credits are subject to a ten-year carryforward period, with $ 921 expiring beyond 2028.

The Company has provided a valuation allowance of $ 921 as of December 31, 2023 against the New Hampshire Business Enterprise credit carryforwards.

The net change in the total valuation allowance reflects a $ 725 increase and a $ 110 decrease in 2023 and 2022, respectively.

A reconciliation of the Company’s 2023, 2022, and 2021 income tax provision to total income taxes at the statutory federal tax rate is as follows (in thousands):

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The Company’s CODM is its Chief Executive Officer, and he evaluates operations and allocates resources based on a measure of operating income.

The Company’s operations are organized under three reporting segments—the Business Solutions segment, which serves primarily SMBs;

the Enterprise Solutions segment, which serves primarily medium-to-large corporations;

The Company’s operations are organized under three reporting segments—the Enterprise Solutions segment, which serves primarily medium-to-large corporations;

the Business Solutions segment, which serves primarily SMBs;

and the Public Sector Solutions segment, which serves primarily federal, state, and local government and educational institutions.

5 unchanged sentences

Years Ended December 31,

Business Solutions

Enterprise Solutions

Business Solutions

Public Sector Solutions

1 unchanged sentence

Operating income (loss):

Business Solutions

Enterprise Solutions

Business Solutions

Public Sector Solutions

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Depreciation and amortization:

Business Solutions

Enterprise Solutions

Business Solutions

Public Sector Solutions

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Total assets:

Business Solutions

Enterprise Solutions

Business Solutions

Public Sector Solutions

2 unchanged sentences

Goodwill of $ 66,236 and $ 7,366 is held by the Enterprise Solutions and Business Solutions segments, respectively, as of December 31, 2023.

Assets reported under the Headquarters/Other group are managed by corporate headquarters, including cash, inventory, property and equipment and intercompany balance, net.

Assets reported under the Headquarters/Other group are managed by corporate headquarters, including cash, inventory, property and equipment

and intercompany balance, net.

Total assets for the Headquarters/Other group are presented net of intercompany balances eliminations of $ 35,522 and $ 43,679 for the years ended December 31, 2023 and 2022, respectively.

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Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 9A. Controls and Procedures