Item 1. Legal Proceedings
ITEM 1. LEGAL PROCEEDINGS
Litigation Matters
The Company is involved in
litigation arising from other matters in the ordinary course of business. We are regularly subject to claims, suits, regulatory and government
investigations, and other proceedings involving labor and employment, commercial disputes, and other matters. Such claims, suits, regulatory
and government investigations, and other proceedings could result in fines, civil penalties, or other adverse consequences.
Certain of these outstanding
matters include speculative, substantial or indeterminate monetary amounts. We record a liability when we believe that it is probable
that a loss has been incurred and the amount can be reasonably estimated. If we determine that a loss is reasonably possible and the loss
or range of loss can be estimated, we disclose the reasonably possible loss. We evaluate developments in our legal matters that could
affect the amount of liability that has been previously accrued, and the matters and related reasonably possible losses disclosed, and
make adjustments as appropriate. Significant judgment is required to determine both likelihood of there being and the estimated amount
of a loss related to such matters.
With respect to our other
outstanding matters, based on our current knowledge, we believe that the amount or range of reasonably possible loss will not, either
individually or in aggregate, have a material adverse effect on our business, consolidated financial position, results of operations,
or cash flows. However, the outcome of such matters is inherently unpredictable and subject to significant uncertainties.
SEC Investigation
The Company and certain affiliates
and related parties received several subpoenas from the SEC for the production of documents and testimony in the non-public fact-finding
investigation referred to as In re DPW Holdings, Inc. The Company and those parties have engaged in discussions with the SEC regarding
the matters at issue in the investigation, and those discussions have progressed. No final resolution regarding the matters at issue in
the investigation has been reached however, and there can be no assurance as to the outcome of this matter. The Company recorded a $1.0
million loss contingency related to this matter.
ITEM 1A. RISK FACTORS
There
are no updates or changes to the risk factors set forth in our Annual Report on Form 10-K for the year ended December 31, 2022.
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