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Item 9A. Controls and Procedures

2023-05-25 compared with 2022-05-26 · 352 added, 293 removed, 1001 unchanged (39% of the section changed)

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EVALUATION OF DISCLOSURE CONTROLS AND PROCEDURES

The Company’s management, with the participation of the Chief Executive Officer (“CEO”) and the Chief Financial Officer (“CFO”), has evaluated the effectiveness of the Company’s disclosure controls and procedures, or “disclosure controls”,

as of the end of the period covered by this report as defined in Exchange Act Rule 13a-15(e).

Disclosure controls are controls and procedures designed to reasonably ensure that information required to be

disclosed in our reports filed under the Exchange Act, such as this Form 10-K annual report, is recorded, processed, summarized, and reported within the time periods specified in the US Securities and Exchange Commission’s rules and forms.

Disclosure controls include, without limitation, controls and procedures designed to ensure that information required to be disclosed in our reports filed under the Exchange Act is accumulated and communicated to our management, including

our CEO and CFO, or persons performing similar functions, as appropriate, to allow timely decisions regarding required disclosure.

controls”, as of the end of the period covered by this report as defined in Exchange Act Rule 13a-15(e).

Disclosure controls are controls and procedures designed to reasonably ensure that information

required to be disclosed in our reports filed under the Exchange Act, such as this Form 10-K annual report, is recorded, processed, summarized, and reported within the time periods specified in the SEC’s rules and forms.

controls include, without limitation, controls and procedures designed to ensure that information required to be disclosed in our reports filed under the Exchange Act is accumulated and communicated to our management, including our

CEO and CFO, or persons performing similar functions, as appropriate, to allow timely decisions regarding required disclosure.

Our disclosure controls include some, but not all, components of our internal control over financial

Based on the evaluation described above, the CEO and CFO concluded that disclosure controls and procedures as of March 31, 2023, were effective in ensuring information required to be disclosed in our SEC

reports was recorded, processed, summarized, and reported within the time periods specified in the SEC’s rules and forms, and that such information was accumulated and communicated to our management, including our CEO and CFO, as appropriate,

to allow timely decisions regarding required disclosure.

appropriate, to allow timely decisions regarding required disclosure.

MANAGEMENT’S REPORT ON INTERNAL CONTROL OVER FINANCIAL REPORTING

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and dispositions of our assets;

(2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of consolidated financial statements in accordance with generally accepted accounting principles, and that our

receipts and expenditures are being made only in accordance with authorizations of our management and directors;

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 consolidated financial statements.

that our receipts and expenditures are being made only in accordance with authorizations of our management and directors;

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 consolidated financial statements.

Our management performed an assessment of the effectiveness of our internal control over financial reporting as of March 31, 2023, utilizing the criteria described in the “Internal Control — Integrated

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Further, the design of a control system must reflect the fact that there are resource constraints, and the benefits of controls must be considered relative to their costs.

such limitations, disclosure controls and internal control over financial reporting cannot prevent or detect all misstatements, whether unintentional errors or fraud.

However, these inherent limitations are known features of the financial

reporting process;

Because of such limitations, disclosure controls and internal control over financial reporting cannot prevent or detect all misstatements, whether unintentional errors or fraud.

However, these inherent limitations are known features of

the financial reporting process;

therefore, it is possible to design into the process safeguards to reduce, though not eliminate, this risk.

OTHER INFORMATION

Except as set forth below, the information required by Items 10, 11, 12, 13 and 14 is incorporated by reference from our definitive Proxy Statement to be filed with the Securities and Exchange Commission

pursuant to Regulation 14A not later than 120 days after the close of our fiscal year.

DISCLOSURE REGARDING FOREIGN JURISDICTIONS THAT PREVENT INSPECTIONS

Except as set forth below, the information required by Items 10, 11, 12, 13 and 14 is incorporated by reference from our definitive 2023 Proxy Statement to be filed with the SEC pursuant to Regulation 14A not

later than 120 days after the close of our fiscal year.

DIRECTORS, EXECUTIVE OFFICERS, AND CORPORATE GOVERNANCE

Information about our directors may be found under the caption “Proposal 1 – Election of Directors” in our Proxy Statement for the 2023 Annual Meeting of Stockholders (the “Proxy Statement”).

The information in

the Proxy Statement set forth under the captions of “Corporate Governance – Code of Conduct” and “Board Committees” is incorporated herein by reference.

The information

in the 2023 Proxy Statement set forth under the captions of “Corporate Governance – Code of Conduct” and “Board Committees” is incorporated herein by reference.

The information under the heading “Executive Officers” in Item 1 of this report is incorporated in this section by reference.

CODE OF ETHICS

We have a code of ethics that applies to all of our employees, including our principal executive officer, principal financial

officer, principal accounting officer and our Board.

The Code of Conduct is available on our website at www.eplus.com/investors/corporate-governance-legal/code-of-conduct .

We will disclose on our website any amendments to or waivers from any provision of the Code of Conduct that applies to any of the directors or executive officers.

We have a code of ethics that applies to all of our employees, including our principal executive officer, principal financial officer, principal accounting officer and our Board.

The Code of Conduct is

available on our website at www.eplus.com/investors/corporate-governance-legal/code-of-conduct .

We will disclose on our website any amendments to or waivers from any provision

of the Code of Conduct that applies to any of the directors or executive officers.

EXECUTIVE COMPENSATION

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PRINCIPAL ACCOUNTING FEES AND SERVICES

The information in the Proxy Statement set forth under the caption “Proposal 3 – Ratification of the Selection of Deloitte & Touche LLP as our Independent Registered Public Accounting Firm for our Fiscal

Year Ending March 31, 2022” is incorporated herein by reference.

The information in the 2023 Proxy Statement set forth under the caption “Proposal 3 – Ratification of the Selection of Deloitte & Touche LLP as our Independent Registered Public Accounting Firm for our

Fiscal Year Ending March 31, 2023” is incorporated herein by reference.

EXHIBITS AND FINANCIAL STATEMENT SCHEDULES

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(a)(2) FINANCIAL STATEMENT SCHEDULE

See “ Financial Statement Schedule II - Valuation and

Qualifying Accounts ” on page S-1.

See “ Financial Statement Schedule II - Valuation and Qualifying Accounts ” on page S-1.

(a)(3) EXHIBIT LIST

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Exhibit Description

Amended and Restated Certificate of

Incorporation, as last amended November 9, 2021 (Incorporated herein by reference to Exhibit 3.1 to our Quarterly Report on Form 10-Q for the period ended December 31, 2021).

Amended and Restated Certificate of Incorporation, as last amended November 9, 2021 (filed herewith).

Amended and Restated Bylaws of e Plus inc., as of March 2, 2022.

(Incorporated herein by reference to Exhibit 3.2 to our Annual Report on Form 10-K

for the fiscal year ended March 31, 2022).

Specimen Certificate of Common Stock (Incorporated herein by reference to Exhibit 4.1 to our Registration Statement on Form S-1 (File No.

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Description of e Plus inc.’s securities registered under Section 12 of the Securities Exchange Act of 1934.

Form of Indemnification Agreement entered into by and between e Plus and its directors and officers (Incorporated herein by reference to Exhibit 10.1 to our

Current Report on Form 8-K filed on August 23, 2016).

(Incorporated herein by reference to Exhibit

4.2 to our Annual Report on Form 10-K for the fiscal year ended March 31, 2022).

Form of Indemnification Agreement entered into by and between e Plus and its directors and officers (Incorporated herein by reference to Exhibit 10.1 to

our Current Report on Form 8-K filed on August 23, 2016).

Amended and Restated Employment Agreement effective September 6, 2017, by and between e Plus inc.

Marron (Incorporated herein by reference to Exhibit

10.1 to our Quarterly Report on Form 10-Q for the period ended December 31, 2017).

Marron (Incorporated herein by reference to

Exhibit 10.1 to our Quarterly Report on Form 10-Q for the period ended December 31, 2017).

Amendment #1, effective July 16, 2018, to Amended and Restated Employment Agreement effective September 6, 2017, by and between e Plus inc.

(Incorporated herein by reference to Exhibit 10.2 to our Current Report on Form 8-K filed on July 18, 2018).

Marron (Incorporated herein by reference to Exhibit 10.2 to our Current Report on Form 8-K filed on July 18, 2018).

Amendment #2, effective November 14, 2019, to Amended and Restated Employment Agreement effective September 6, 2017, by and between e Plus inc.

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Amendment #1, effective November 14, 2019, to Amended and Restated Employment Agreement, effective September 6, 2017, by and between e Plus inc.

and Elaine D.

Marion (Incorporated herein by reference to Exhibit 10.1 to our Quarterly Report on Form 10-Q for the period ended December 31, 2019).

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and Darren S.

(Incorporated herein by reference to Exhibit 10.1 to our Current

Report on Form 8-K filed on May 9, 2018).

(Incorporated herein by reference to Exhibit 10.1 to our

Current Report on Form 8-K filed on May 9, 2018).

Amendment No.

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(Incorporated herein by reference to Exhibit 10.3 to our Current Report on Form 10-Q filed on February 6, 2020).

2017 Non-Employee

Director Long-Term Incentive Plan (updated to reflect the stock split effected December 13, 2021) as amended (Incorporated herein by reference to Exhibit 10.6 to our Current

Report on Form 10-Q for the period ended December 31, 2021).

2012 Employee Long-term Incentive Plan

(updated to reflect stock split effected March 31, 2017) (Incorporated herein by reference to Exhibit 10.8 to our Annual Report on Form 10-K for the fiscal year ended March 31, 2017).

2017 Non-Employee Director Long-Term Incentive Plan (updated to reflect the stock split effected December 13, 2021) as amended

(Incorporated herein by reference to Exhibit 10.6 to our Current Report on Form 10-Q for the period ended December 31, 2021).

2012 Employee Long-term Incentive Plan (updated to reflect stock split effected March 31, 2017) (Incorporated herein by reference to Exhibit 10.8 to

our Annual Report on Form 10-K for the fiscal year ended March 31, 2017).

Cash Incentive Plan, effective April 1, 2018, (Incorporated herein by reference to Exhibit 10.1 to our Current Report on Form 8-K filed on July 18, 2018).

e Plus 2021 Employee Long-Term Incentive Plan (updated to reflect the

stock split effected December 13, 2021) as amended (Incorporated herein by reference to Exhibit 10.1 to our Current Report on Form 10-Q for the period ended December 31, 2021).

First Amended and Restated Credit Agreement, dated as of October 13, 2021, by and among e Plus Technology, inc., e Plus Technology Services, inc.,

SLAIT Consulting, LLC, certain of e Plus inc.

subsidiaries as guarantors, Wells Fargo Commercial Distribution Finance, LLC as administrative agent and the Lenders party thereto (Incorporated

herein by reference to Exhibit 10.1 to our Current Report in Form 8-K filed on October 19, 2021).

e Plus 2021 Employee Long-Term Incentive Plan (updated to reflect the stock split effected December 13, 2021) as amended (Incorporated herein by reference to Exhibit 10.1 to our Current

Report on Form 10-Q for the period ended December 31, 2021).

2022 Employee Stock Purchase Plan (Incorporated herein by reference to Exhibit 10.1 to our Current Report on Form 8-K filed on September 20, 2022).

First Amended and Restated Credit Agreement, dated as of October 13, 2021, by and among e Plus Technology, inc., e Plus Technology Services,

inc., SLAIT Consulting, LLC, certain of e Plus inc.

subsidiaries as guarantors, Wells Fargo Commercial Distribution Finance, LLC as administrative agent and the Lenders party thereto

(Incorporated herein by reference to Exhibit 10.1 to our Current Report in Form 8-K filed on October 19, 2021).

Guaranty and Security Agreement, dated as of October 13, 2021, by and among e Plus Technology, inc., e Plus Technology Services, inc., SLAIT

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First Amended and Restated Limited Guaranty, dated as of October 13, 2021, by and between e Plus inc.

and Wells Fargo Commercial Distribution Finance, LLC as

agent for the benefit of Secured Parties (Incorporated herein by reference to Exhibit 10.4 to our Current Report on Form 8-K filed on October 19, 2021).

and Wells Fargo Commercial Distribution Finance, LLC as agent for the benefit of Secured Parties (Incorporated herein by reference to Exhibit 10.4 to our Current Report on Form 8-K filed on October 19, 2021).

First Amendment to First Amended and Restated Credit Agreement, dated as of October 31, 2022, by and among e Plus Technology, inc., e Plus Technology Services inc., SLAIT Consulting, LLC, certain of e Plus inc.

subsidiaries as guarantors, Wells Fargo Commercial Distribution Finance,

LLC as administrative agent and the Lenders party thereto.

(Incorporated herein by reference to Exhibit 10.2 to our Quarterly Report on Form 10-Q for the quarter ended September 30, 2022, filed on November 3, 2022).*

Second Amendment to First Amended and Restated Credit Agreement, dated as of March 10, 2023, by and among e Plus Technology, inc., e Plus Technology Services inc., SLAIT Consulting, LLC, certain of e Plus inc.

subsidiaries as guarantors, Wells Fargo Commercial Distribution Finance, LLC as administrative agent and the Lenders party thereto.

(Incorporated herein

by reference to Exhibit 10.1 to our Current Report on Form 8-K filed on March 14, 2023).

Subsidiaries of e Plus inc.

(filed herewith).

Consent of Independent Registered Public Accounting Firm.

(filed herewith).

Certification of the Chief Executive Officer of e Plus inc.

pursuant to the Securities Exchange Act Rules 13a-14(a) and 15d-14(a).

(filed herewith).

Certification of the Chief Financial Officer of e Plus inc.

pursuant to the Securities Exchange Act Rules 13a-14(a) and 15d-14(a).

(filed herewith).

Certification of the Chief Executive Officer and Chief Financial Officer of e Plus inc.

pursuant to 18 U.S.C.

§ 1350 (furnished herewith).

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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Cover Page Interactive Data File (embedded within the Exhibit 101 Inline XBRL document)

* Certain schedules and exhibits have been omitted pursuant to Item 601(a)(5) of Regulation S-K.

The registrant agrees to furnish a copy of any omitted schedule or exhibit to the SEC upon request;

however, that the registrant may request confidential treatment pursuant to Rule 24b-2 of the Exchange Act for any document so furnished.

FORM 10-K SUMMARY

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(Principal Financial and Accounting Officer)

/s/ RENEE BERGERON

Renée Bergeron, Director

Bowen, Director

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INDEX TO FINANCIAL STATEMENTS AND SCHEDULES

Report of Independent

Registered Public Accounting Firm Deloitte & Touche LLP (PCAOB ID 34 )

Consolidated Balance

Sheets as of March 31, 2022 and 2021

Statements of Operations for the years ended March 31, 2022, 2021 and 2020

Consolidated Statements of Comprehensive

Income for the years ended March 31, 2022, 2021 and 2020

Statements of Cash Flows for the years ended March 31, 2022, 2021 and 2020

Statements of Stockholders’ Equity for the years ended March 31, 2022, 2021 and 2020

Notes to Consolidated

Financial Statements

Report of Independent Registered Public Accounting Firm Deloitte & Touche LLP

(PCAOB ID 34 )

Consolidated Balance Sheets as of March 31, 2023 and 2022

Consolidated Statements of Operations for the years ended March 31,

2023, 2022 and 2021

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

Consolidated Statements of Cash Flows for the years ended March 31,

2023, 2022 and 2021

Consolidated Statements of Stockholders’ Equity for the years

ended March 31, 2023, 2022 and 2021

Notes to Consolidated Financial Statements

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

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disclosures to which they relate.

Revenue Recognition – Gross Versus Net Recognition of Sales of Third-Party Software – Refer to Note 1 to the

financial statements

Revenue Recognition – Gross Versus Net Recognition of Sales of Third-Party Software – Refer to Note 1 to the financial statements

Critical Audit Matter Description

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performance obligation.

In all these sales where the Company is the agent, the Company recognizes sales on a net basis at the point that their customer and vendor accept the terms and conditions of the arrangement.

In all these sales where the Company is the agent, the Company recognizes sales on a net basis at the point that its customer and vendor accept the terms and conditions of the arrangement.

Auditing the Company’s determination of gross or net recognition of third-party software and support sales involved a high degree of subjectivity as it required the

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Financing receivables and operating leases—net

Deferred tax asset—net

Deferred tax asset

Property, equipment, and other assets

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Non-recourse notes payable - long-term

Deferred tax liability

Other liabilities

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Operating income

Other income (expense)

Other income (expense), net

Earnings before tax

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Payments from lessees directly to lenders—operating leases

Gain on disposal of property, equipment, and operaing lease equipment

Gain on disposal of property, equipment, and operating lease equipment

Accounts receivable

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Effect of exchange rate changes on cash

Net increase in cash and cash equivalents

Net increase (decrease) in cash and cash equivalents

Cash and cash equivalents, beginning of period

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Purchases of property, equipment, and operating lease equipment

Consideration for acquisitions

Borrowing of non-recourse and recourse notes payable

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Vesting of share-based compensation

Repurchase of common stock

New operating lease assets obtained in exchange for lease obligations

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Comprehensive

Balance, April 1, 2019

Balance, March 31, 2020

Issuance of restricted stock awards

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Repurchase of common stock

Stock split effected in the form of a dividend

Retirement of treasury stock

Foreign currency translation adjustment

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Repurchase of common stock

Stock split effected in the form of a dividend

Retirement of treasury stock

Foreign currency translation adjustment

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Actual results may differ from these estimates.

STOCK SPLIT — On December 13, 2021, we completed a two -for-one

stock split in the form of a stock dividend.

References made to outstanding shares or per share amounts in the accompanying financial statements and disclosures have been retroactively adjusted for this stock split.

ALLOWANCE FOR CREDIT LOSSES — We maintain an allowance for credit losses related to our accounts receivable and financing receivables.

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uncollectable.

Since the onset of the COVID-19 pandemic, we have measured our allowance using higher than historical loss rates to reflect forecasted credit deterioration.

BUSINESS COMBINATIONS — We account for business combinations using the acquisition method, which requires that the total purchase price for each of

the acquired entity be allocated to the assets acquired and liabilities assumed based on their fair values at the acquisition date.

The allocation process requires an analysis of intangible assets, such as customer relationships, trade names,

acquired contractual rights and assumed contractual commitments and legal contingencies to identify and record all assets acquired and liabilities assumed at their fair value.

BUSINESS COMBINATIONS — We account for business combinations using the acquisition method, which requires that the total purchase price for the

acquired entity be allocated to the assets acquired and liabilities assumed.

With limited exceptions, we measure most assets acquired and liabilities assumed based on their fair values at the acquisition date.

We apply Accounting Standards

Codification (“Codification”) Topic 606, Contracts with customers (“Codification Topic 606”), to recognize and measure contract assets and contract liabilities from contracts with customers.

Our allocation process requires an analysis of intangible

assets, such as customer relationships, trade names, acquired contractual rights and legal contingencies to identify and record all assets acquired and liabilities assumed.

We record any premium paid over the fair value of the acquired net assets as goodwill.

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collect and distribute customer payments under financing arrangements.

As of March 31, 2022, we were not holding any amounts in trust for third-party recipients.

As of March 31, 2021, we had $ 0.7 million being held in trust for third-party recipients within our lockbox account.

As of March 31, 2022, and March 31, 2021, there were no restrictions on the withdrawal of funds from our money market funds.

As of March 31, 2023, and March 31, 2022, we were no t holding

any amounts in trust for third-party recipients, and there were no restrictions on the withdrawal of funds from our money market

CONCENTRATIONS OF RISK — Financial instruments that potentially subject us to concentrations of credit risk include cash and cash equivalents,

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March 31, 2023, and 2022 included approximately 13 % and 14 %, respectively, concentration of invoices due from Verizon Communications Inc.

The risk on our accounts receivable and financing receivables is reduced by having a broad customer base in

a diverse range of industries and through the ongoing evaluation of collectability of our portfolio.

The credit risk is further mitigated by transferring certain of our financing receivables to financial institutions on a non-recourse basis and,

for our lease receivables, by owning the underlying asset.

A substantial portion of our sales are products from Cisco Systems, which represented approximately 39 %, 36 %, and 40 %, of our technology segment net sales for the years ended March 31, 2022, 2021, and 2020, respectively.

DEFERRED COSTS — When a contract is within the scope of Accounting Standards Codification (“Codification”) Topic 606, Revenue from Contracts with Customers (“Codification Topic 606”), we defer costs of fulfilling the contract when they generate or enhance resources that will be used by us in satisfying

performance obligations in the future.

Additionally, we capitalize costs that are incremental to obtaining the contracts, predominately sales commissions, and expense them in proportion to each completed contract performance obligation.

The risk on our accounts receivable and financing receivables is reduced by having a broad customer base in a diverse range of

industries and through the ongoing evaluation of collectability of our portfolio.

The credit risk is further mitigated by transferring certain of our financing receivables to financial institutions on a non-recourse basis and, for our lease

receivables, by owning the underlying asset.

A substantial portion of our sales are products from Cisco Systems, which represented approximately 40 %,

39 %, and 36 %, of our

technology segment net sales for the years ended March 31, 2023, 2022, and 2021, respectively.

DEFERRED COSTS — When a contract is within the scope of the scope of Codification Topic 606, we defer costs of fulfilling the contract when they

generate or enhance resources that will be used by us in satisfying performance obligations in the future.

Additionally, we capitalize costs that are incremental to obtaining the contracts, predominately sales commissions, and expense them in

proportion to each completed contract performance obligation.

DEFERRED REVENUE — We recognize deferred revenue when cash payments are received or due in advance of our performance.

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liabilities, we consider the recorded value of the financial instruments to approximate the fair value due to their short maturities.

On March 31, 2022, the carrying amounts of our notes receivables, recourse and non-recourse payables were $ 80.5 million, $ 13.1 million, and $ 21.2 million, respectively, and their fair values were $ 80.0

On March 31, 2023, the carrying amounts of our notes receivable, recourse and non-recourse payables were $ 109.2 million, $ 6.0 million, and $ 34.3 million, respectively, and their fair values were $ 109.5

million, $ 6.0 million, and $ 34.5

million, respectively.

On March 31, 2021, the carrying amounts of our notes receivables, recourse and non-recourse payables were $ 112.6

On March 31, 2022, the carrying amounts of our notes receivable, recourse and non-recourse payables were $ 80.5

million, $ 13.1 million, and $ 21.2

million, respectively, and their fair values were $ 80.0 million, $ 13.1 million, and $ 21.2 million, respectively.

FINANCING RECEIVABLES AND OPERATING LEASES — Financing receivables and operating leases consists of notes receivable, sales-type leases, and

FINANCING RECEIVABLES AND OPERATING LEASES — Financing receivables and operating leases consist of notes receivable, sales-type leases, and

operating leases.

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stockholders’ equity.

We report all foreign currency transaction gains or losses in other income (expense) on our consolidated statement of operations.

For the years ended March 31, 2022, 2021, and 2020, we recognized a loss of $ 0.5 million, a gain of $ 0.5 million,

and a loss of $ 0.4 million, respectively, due to foreign currency transactions.

We report all foreign currency transaction gains or losses in other income (expense), net on our consolidated statement of operations.

For the years ended March 31, 2023, 2022, and 2021, we recognized a loss of $ 5.4 million, a loss of $ 0.5 million,

and a gain of $ 0.5 million, respectively, due to foreign currency transactions.

GOODWILL — We test goodwill for impairment on an annual basis, as of October 1, and between annual tests if an event occurs, or circumstances

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Our determination of the net realizable value for inventories is based on the

terms of underlying purchase commitments from our customers, current economic conditions including the impact of COVID-19, and other relevant factors.

LESSEE ACCOUNTING — We lease office space for periods up to 6 years.

terms of underlying purchase commitments from our customers, current economic conditions, and other relevant factors.

LESSEE ACCOUNTING — We lease office space for periods up to six years and lease warehouse space for periods of up to 10 years, and we have some lease options

that can be exercised to extend beyond those lease term limits.

At the lease commencement date, we recognize operating lease liabilities based on the present value of the future minimum lease payments.

In determining the present value of

future minimum lease payments, we use our incremental borrowing rate based on the information available at the commencement date.

When the future minimum payments encompass non-lease components, we account for the lease and non-lease components

as a single lease component.

In determining the present value of future

minimum lease payments, we use our incremental borrowing rate based on the information available at the commencement date.

When the future minimum payments encompass non-lease components, we account for the lease and non-lease components as a

single lease component.

We elected not to recognize right-of-use assets and lease liabilities for leases with an initial term of 12 months or less.

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arrives at our warehouse.

In these “bill-and-hold” arrangements, we recognize revenue when the customer has ordered the product through their warehousing agreement with us or signed a bill-and-hold agreement with us, the product is identified

separately as belonging to the customer, and the product is ready for delivery to the customer.

the product is identified separately as belonging to the customer, and the product is ready for delivery to the customer.

We recognize sales of off-lease equipment within our financing segment when control passes to the customer, which is typically the date that title

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We recognize the lease payments over the lease term on a straight-line basis as part of net sales.

In all our leases, we recognize variable lease payments, primarily reimbursement for property taxes associated with the leased asset, as part of

In all of our leases, we recognize variable lease payments, primarily reimbursement for property taxes associated with the leased asset, as part of

net sales in the period in which the changes in facts and circumstances on which the variable lease payments are based occur.

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these services on a straight-line basis over the period services are provided.

SHARE-BASED COMPENSATION — We account for share-based compensation in accordance with Codification Topic 718 Compensation—Stock Compensation .

We recognize compensation cost for awards of restricted stock with graded vesting on a straight-line basis over the requisite service period.

account for forfeitures when they occur.

SHARE-BASED COMPENSATION — We account for share-based compensation in accordance with Codification Topic 718 Compensation—Stock Compensation .We account for forfeitures when they occur.

There are no additional conditions for vesting other than service conditions.

We recognize compensation cost for awards of restricted stock with graded vesting on a straight-line basis over the requisite service period.

are no additional conditions for vesting other than service conditions.

We recognize compensation cost for our employee stock purchase plan on a straight-line basis over the offering period, which is 6 months.

We measure the award on the grant date at fair value using the Black-Scholes option pricing model.

SOFTWARE DEVELOPMENT COSTS — We capitalize costs for the development of internal use software under the Codification Topic 350-40 Intangibles—Goodwill and Other Intangibles, Subtopic Internal-Use Software .

We did no t have significant capitalized development costs for internal use software for the year ended March 31, 2022.

We capitalized

development costs for internal use software of $ 0.2 million for both the years ended March 31, 2021 and March 31, 2020.

capitalized costs, net of amortization, of approximately $ 2.1 million and $ 3.4 million as of March 31, 2022, and March 31, 2021, respectively, that is included in the accompanying consolidated balance sheets as a component of other intangible assets-net.

We did no t have significant capitalized development costs for internal use software for either of the years ended March 31, 2023,

or March 31, 2022.

We capitalized development costs for internal use software of $ 0.2 million for the year ended March 31, 2021.

capitalized costs, net of amortization, of approximately $ 1.0 million and $ 2.1 million as of March 31, 2023, and March 31, 2022, respectively, that is included in the accompanying consolidated balance sheets as a component of other intangible

TREASURY STOCK — We account for treasury stock under the cost method and include treasury stock as a component of stockholders’ equity on the

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We recognize consideration that exceeds the specific, incremental, identifiable costs as a reduction of cost of sales.

RECENT ACCOUNTING PRONOUNCEMENTS

RECENTLY ADOPTED ACCOUNTING PRONOUNCEMENTS — In

October 2021, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2021-08, Business Combinations (Topic 805):

Accounting for Contract Assets and Contract Liabilities from

Contracts with Customers, that requires companies to apply Accounting Standards Codification Topic 606, Contracts with Customers, to recognize and measure contract assets and contract liabilities

from contracts with customers acquired in a business combination.

We early adopted this update beginning in the second quarter of our fiscal year ending March 31, 2023, and it did not have a material impact on our Consolidated Financial Statements.

The ongoing impact of this standard will be fact dependent on the transactions within its scope.

RECENTLY ISSUED ACCOUNTING PRONOUNCEMENTS NOT YET

ADOPTED — In September 2022, the FASB issued ASU 2022-04, Liabilities—Supplier Finance Programs (Subtopic 405-50):

Disclosure of Supplier Finance Program Obligations .

This update requires buyers in a

supplier finance program to disclose certain qualitative and quantitative information about the program.

This update is effective for us beginning in the first quarter of our fiscal year ending March 31, 2024, except for a requirement to provide

a roll forward of our obligations during the annual period, which is effective for us beginning in the first quarter of our fiscal year ending March 31, 2025.

We are currently evaluating the impact this update will have on our disclosures.

CONTRACT BALANCES

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Non-current (included in other liabilities)

Revenue recognized from the beginning contract liability balance was $ 57.5 million and $ 42.2 million for the fiscal year ended March 31, 2022, and

Revenue recognized from the beginning contract liability balance was $ 70.3 million and $ 57.5 million for the fiscal years ended March 31, 2023, and

2022, respectively.

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Unguaranteed residual value (1)

Initial direct costs, net of amortization

Unearned income

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follows (in thousands):

March 31, 2022

March 31, 2021

Cost of equipment under operating leases

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Amounts include estimated unguaranteed

residual values of $ 1.7 million and $ 2.5

million as of March 31, 2022, and 2021, respectively.

residual values of $ 1,717 thousand as of both March 31, 2023, and 2022.

The following table provides the future scheduled minimum lease rental payments for operating leases as of March 31, 2023 (in thousands):

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When we retain servicing obligations in transfers accounted for as sales, we allocate a portion of the proceeds to deferred revenues, which is recognized as we perform the

As of March 31, 2022, and March 31, 2021, we had deferred revenue of $ 0.5 million and $ 0.4 million, respectively, for servicing obligations.

As of both March 31, 2023, and March 31, 2022, we had deferred revenue of $ 0.5 million for servicing obligations.

In a limited number of transfers accounted for as sales, we indemnified the assignee in

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LESSEE ACCOUNTING

We lease office space for periods up to six years .

We recognize our right-of-use assets as part of property, equipment, and other assets .

As of March 31, 2022, and

2021, we had right-of-use assets of $ 6.9

million and $ 8.8 million, respectively.

recognize the current and long-term portions of our lease liability as part of other current liabilities and other liabilities , respectively.

As of March 31, 2022, and 2021, we had current lease liabilities of $ 3.6 million and $ 3.9 million, respectively, and long-term lease liabilities of $ 3.3 million and $ 5.0 million, respectively.

We recognized rent expense of $ 5.3 million and $ 6.1 million as part of selling, general, and administrative expenses during the years ended March 31, 2022 , and March 31, 2021 , respectively.

We lease office space for periods up to six years and lease warehouse space for periods of up to 10 years, and we have some lease options that can be exercised to extend beyond those lease term limits.

We recognize our right-of-use assets as part

of property, equipment, and other assets .

As of March 31, 2023, and 2022, we had right-of-use assets of $ 14.6 million and $ 6.9

million, respectively.

We recognize the current and long-term portions of our lease liability as part of other current liabilities and other liabilities , respectively.As of March 31, 2023, and 2022,

we had current lease liabilities of $ 2.7

million and $ 3.6 million, respectively, and

long-term lease liabilities of $ 12.0 million

and $ 3.3 million, respectively.

recognized rent expense of $ 5.2 million and

$ 5.3 million as part of selling, general,

and administrative expenses during the years ended March 31, 2023 , and March 31, 2022 , respectively.

Supplemental information about the remaining lease terms and discount

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Weighted average discount rate

The following table provides our future lease payments under our operating leases as of

March 31, 2022 (in thousand s):

The following table provides our future lease payments under our operating leases as

of March 31, 2023 (in thousand s):

Year ending March 31, 2024

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Present value of lease liabilities

As of March 31, 2023, we were

committed to one office lease that had not yet commenced with a total commitment of $ 0.3 million.

GOODWILL AND OTHER INTANGIBLE ASSETS

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2022 , relates to our technology reportable segment, which we also determined to be one reporting unit.

The carrying value of goodwill was $ 136.1 million and $ 126.5 million as of

March 31, 2023, and March 31, 2022, respectively.

Our goodwill balance increased by $ 9.6 million for the year ended March 31, 2023, due

to $ 9.7 million in goodwill additions from our acquisition of Future Com, Ltd., offset by foreign currency translation of $ 0.1 million.

Please refer to Note 16 , “Business Combinations” for details of our acquisition.

We test goodwill for impairment on an annual basis, as of the first day of our third fiscal quarter, and between annual tests if an event occurs, or

circumstances change, that would more likely than not reduce the fair value of a reporting unit below its carrying value.

In our annual tests as of October 1, 2021, and 2020 , we performed a qualitative assessment of goodwill and concluded that, more likely than not, the fair value of our technology reporting unit continued to substantially exceed its

carrying value.

We performed our last quantitative goodwill impairment test as of March 31, 2020.

At that time, we concluded that the fair value of our technology

reporting unit substantially exceeded its carrying value.

Our conclusions would not have been impacted by a ten percent change in our

estimate of the fair value of the reporting unit.

In our annual test as of October 1, 2022, we performed a quantitative assessment of

goodwill and concluded that the fair value of our technology reporting unit exceeded its carrying value.

Our conclusions would not be impacted by a ten percent change in our estimate of the fair value of the reporting unit.

In our annual test as of October 1, 2021, we performed a qualitative assessment of goodwill and concluded that, more likely than not, the fair value

of our technology reporting unit continued to substantially exceed its carrying value.

OTHER INTANGIBLE ASSETS

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March 31, 2022

Customer relationships & other intangibles

Purchased intangibles

Capitalized software development

Customer relationships and other intangibles are generally amortized between 5 to 10 years.

Purchased intangibles, consisting mainly of customer relationships, are generally amortized between 5 to 10 years.

Capitalized software development is generally

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Total amortization expense for customer relationships and other intangible assets was $ 9.3 million, $ 10.1 million, and $ 10.3 million for the years ended March 31, 2023, 2022 and 2021, respectively.

The following table

provides the future amortization expense for customer relationships and other intangible assets as of March 31, 2022 (in thousands):

The following table provides the future amortization expense for customer relationships and other

intangible assets as of March 31, 2023 (in thousands):

Year ending March 31, 2024

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Loss rates in this

category are generally less than 1 %.

category are less than 1 %.

This rating includes accounts with average credit risk that are more susceptible to loss in the event of adverse business or economic conditions.

Loss rates in this category are generally in the range of 2 % to 10 %.

Loss rates in this category are in the range of 1 % to 8 %.

This rating includes accounts that have marginal credit risk such that the customer’s ability to make repayment is impaired or may likely become

The loss rates in this category in the normal course are generally in the range of 10 % to 100 %.

The loss rates in this category in the normal course are greater than 8 % and up to 100 %.

The following table provides the

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Total amortized cost (1)

Unguaranteed residual values of $ 6,424 thousand that we retained after selling the related lease

receivable is excluded from amortized cost.

Transfers consist of receivables that have

been transferred to third-party financial institutions on a non-recourse basis and receivables that are in the process of being transferred to third-party financial institutions.

Unguaranteed residual values of $ 4,222 thousand that we retained after selling the related

lease receivable is excluded from amortized cost .

Transfers consist of receivables that

have been transferred to third-party financial institutions on a non-recourse basis.

The following table provides the amortized cost basis of our financing receivables by CQR and by credit origination year as of March 31, 2022 (in

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Total amortized cost (1)

Unguaranteed residual values of $ 9,453 thousand that we retained after selling the related lease

receivable and initial direct costs of notes receivable of $ 425 thousand are excluded from amortized cost.

Transfers consist of receivables that have

been transferred to third-party financial institutions on a non-recourse basis and receivables that are in the process of being transferred to third-party financial institutions.

Unguaranteed residual values of $ 6,424 thousand that we retained after selling the related

lease receivable is excluded from amortized cost.

Transfers consist of receivables that

have been transferred to third-party financial institutions on a non-recourse basis and receivables that are in the process of being transferred to third-party financial institutions.

The following table provides an aging analysis of our financing receivables as of March 31,

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Property and equipment - net

Depreciation and amortization expense on property and equipment, including amounts recognized in cost of sales, was $ 5.4 million for both the years ended March 31, 2022 and March 31, 2021, and $ 4.8 million for the year ended March 31, 2020.

Depreciation and amortization expense on property and equipment, including amounts recognized in cost of sales, was $ 5.5 million for the year ended March 31, 2023, and $ 5.4

million for both the years ended March 31, 2022, and March 31, 2021.

NOTES PAYABLE AND CREDIT FACILITY

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“Borrowers”) in our technology segment through a credit facility with Wells Fargo Commercial Distribution Finance, LLC (“WFCDF”).

The WFCDF credit facility has a floor plan facility and a revolving credit facility.

Under the floor plan facility, we had an outstanding balance of $ 145.3 million and $ 98.7 million as of March 31, 2022 , and March

31, 2021 , respectively.

On our balance sheet, our liability under the floor plan facility is presented as accounts payable – floor plan .

We did no t have an outstanding balance under the

revolving credit facility as of March 31, 2022, or March 31, 2021.

The fair value of the outstanding balances under the WFCDF credit facility were approximately equal to their carrying value as of March 31, 2022, and March 31, 2021.

The WFCDF credit facility (the “WFCDF Credit Facility”) has a floor plan facility and a revolving credit facility.

On October 13, 2021, the Borrowers amended, restated, and replaced in entirety their then-existing credit agreements with WFCDF.

The new credit facility is established by

a syndicate of banks for which WFCDF acts as administrative agent and consists of a discretionary senior secured floorplan facility in favor of the Borrowers in the aggregate principal amount of up to $ 375 million, an increase from $ 275 million, together with a

sublimit for a revolving credit facility for up to $ 100 million (collectively, the “2021 Credit Facility”).

On October 31, 2022, the Borrowers

entered into the First Amendment to the credit agreement.

Under this agreement and its amendment, the credit facility is provided by a syndicate of banks for which WFCDF acts as administrative agent and consists of a discretionary senior secured

floor plan facility in favor of the Borrowers in the aggregate principal amount of up to $ 425.0 million, together with a sublimit for a

revolving credit facility for up to $ 150.0 million.

On March 10, 2023, the Borrowers entered

into a Second Amendment to the credit agreement which amended the Credit Agreement to increase the maximum aggregate amount of principal available under the floor plan facility from $ 425.0 million to $ 500.0 million and increase the maximum

aggregate amount of principal available under the Revolving Facility from $ 150.0 million to $ 200.0 million.

Under the accounts payable floor plan

facility, we had an outstanding balance of $ 134.6 million and $ 145.3 million as of March 31, 2023, and March 31, 2022, respectively.

On our balance sheet, our liability under the accounts payable floor plan facility is presented as

accounts payable – floor plan.

Under the revolving credit facility,

we had no balance outstanding as of March 31, 2023, and March 31, 2022.

On our balance sheet, our liability under the revolving

credit facility is presented as part of recourse notes payable – current.

The fair value of the outstanding balances

under the WFCDF Credit Facility were approximately equal to their carrying value as of March 31, 2023, and March 31, 2022.

The amount of principal available is subject to a borrowing base determined by, among other things, the Borrowers’ accounts receivable and inventory,

each pursuant to a formula and subject to certain reserves.

Loans accrue interest at a rate per annum equal to LIBOR plus 1.75 %.

LIBOR rate is based upon one-month, three-month, six-month and 12-month LIBOR periods, as selected by the Borrowers, and subject to a

floor of 0.00 % .

Our borrowings under the 2021 Credit Facility are secured by the assets of the Borrowers.

Additionally, the 2021 Credit Facility requires a guaranty

of $ 10.5 million by ePlus inc .

Under the 2021 Credit Facility, and under the predecessor WFCDF credit facility, the Borrowers are restricted in their ability to pay dividends to

unless their available borrowing meets or met certain thresholds.

Loans accrue interest at a rate per annum equal to Term SOFR Rate plus a Term SOFR Adjustment of 0.10 % plus an Applicable Margin of 1.75 %.

Our weighted average interest rate on the accounts

receivable component of our WFCDF Credit Facility was 5.35 % during our year ended March 31, 2023, compared to 2.00 % over the prior year .

Our borrowings under the WFCDF Credit Facility are secured by the assets of the Borrowers.

Additionally, the WFCDF Credit Facility requires a

guaranty of $ 10.5 million by ePlus inc .

Under the WFCDF Credit Facility, the Borrowers are restricted in their ability to pay dividends to ePlus inc.

unless their available borrowing meets

or met certain thresholds.

As of March 31, 2023, and March 31, 2022, their available borrowing met the thresholds such that there were no restrictions on their ability to pay dividends .

The 2021 Credit Facility has an initial one-year

The WFCDF Credit Facility has an initial one-year

term, which automatically renews for successive one-year terms thereafter.

However, either the Borrowers or WFCDF may terminate by

providing a written termination notice to the other party no less than 90 days prior to such termination .

The credit facility requires that financial statements of ePlus Technology, inc.

and certain of its subsidiaries be provided within 45 days of each quarter and 90 days of

each fiscal year end and requires that other operational reports be provided on a regular basis.

Either party may terminate with 90

days’ advance notice.

However, either the Borrowers or WFCDF may terminate the

WFCDF Credit Facility at any time by providing a written termination notice to the other party no less than 90 days prior to such

termination .

The loss of the WFCDF Credit Facility could have a material adverse effect on our future results as we currently rely on this facility and its

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related notes receivable.

We discounted our payments due under this installment agreement to calculate our payable balance using an interest rate of 3.50 % as of both March 31, 2022 , and 2021 .

We discounted our payments due under this installment agreement to calculate our payable balance using an interest rate of 3.50 % as of both March 31, 2023 , and March 31, 2022 .

NON-RECOURSE NOTES PAYABLE

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reasonably estimable, we accrue our best estimate for the ultimate resolution of the matter.

If one or more legal matters are resolved against us in a reporting period for

amounts above our expectations, our financial condition and operating results for that period may be adversely affected.

Any outcome, whether favorable or unfavorable, may materially and adversely affect us due to legal costs and expenses,

diversion of management attention and other factors.

If one or more legal matters are resolved against us in a reporting period for amounts above our expectations, our financial condition and operating

results for that period may be adversely affected.

As of March 31, 2023, we do not believe that there is a reasonable possibility that any material loss exceeding the amounts already recognized for these proceedings and matters, if any, has been

Any outcome, whether favorable or unfavorable, may materially and adversely affect us due to legal costs and expenses, diversion of management attention and other factors.

We expense legal costs in the period incurred.

We cannot assure that additional contingencies of a legal nature or contingencies having legal aspects will not be asserted against us in the

future, and these matters could relate to prior, current, or future transactions or events.

We cannot assure

that additional contingencies of a legal nature or contingencies having legal aspects will not be asserted against us in the future, and these matters could relate to prior, current, or future transactions or events.

EARNINGS PER SHARE

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STOCKHOLDERS’ EQUITY

STOCK SPLIT AND TREASURY STOCK

On November 9, 2021, our Board of Directors (“Board”) approved a two -for-one stock split of our common stock in the form of a stock dividend paid on December 13, 2021 ,

to shareholders of record as of close of business on November 29, 2021 .

All share and per share information have been retroactively

adjusted to reflect the stock split and the incremental par value of the newly issued shares was recorded with the offset to additional paid-in capital.

On November 10, 2021, we retired 2,139,918

shares of treasury stock, adjusted for the stock split, with a carrying value of $ 82.2 million, which was deducted from common stock, for

the par value of the retired shares, and from retained earnings, for the excess of cost over the par value.

SHARE REPURCHASE PLAN

On March 24, 2022, our board of directors authorized the repurchase of up to 1,000,000 shares of our outstanding common stock, over a 12-month

period beginning May 28, 2022.

On March 18, 2021, our board of directors authorized the repurchase of up to 1,000,000 shares of our outstanding common stock, adjusted for the stock split, over a 12-month period beginning May 28, 2021.

On May 20, 2020, our board of directors authorized

the repurchase of up to 1,000,000 shares of

our outstanding common stock, adjusted for the stock split, over a 12-month period beginning May 28, 2020 .

On March 22, 2023, our board of directors authorized the repurchase of up to 1,000,000 shares of our outstanding common stock, over a 12-month period beginning May 28, 2023.

On March 24, 2022, our board of directors authorized the repurchase of up to 1,000,000 shares of our outstanding common stock, over a 12-month period beginning May 28, 2022.

On March 18, 2021, our board of directors authorized

the repurchase of up to 1,000,000 shares of our outstanding common stock, adjusted for the stock split, over a 12-month period beginning

May 28, 2021.

These plans authorized purchases to be made from time to time in the open market, or in privately negotiated transactions, subject to availability.

repurchased shares will have the status of treasury shares and may be used, when needed, for general corporate purposes.

During the year ended March 31, 2022, retroactively adjusted for the stock split, we purchased 227,990 shares of our outstanding common stock at an average cost of $ 48.48

per share for a total purchase price of $ 11.1 million under the share repurchase plan;

we also acquired 55,430 shares of common stock at a value of $ 2.6

million to satisfy tax withholding obligations relating to the vesting of employees’ restricted stock.

Any repurchased shares will have the status of treasury shares and may be used, when

needed, for general corporate purposes.

During the year ended March 31, 2023, we purchased 72,973 shares of our outstanding common stock at an average cost of $ 55.69 per share for a total purchase price of $ 4.1 million under the share repurchase plan;

acquired 58,080 shares of common stock at a value of $ 3.3 million to satisfy tax withholding obligations relating to the vesting of employees’ restricted stock.

During the year ended March 31, 2022, retroactively adjusted for the stock split, we purchased 227,990 shares of our outstanding common stock at an average cost of $ 48.48

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SHARE-BASED PLANS

In each of the years ended March 31, 2022, 2021 and 2020 , we issued share-based payment awards and had outstanding share-based payment awards under the following plans:

( 1 ) the 2012 Employee Long-Term Incentive Plan (“ 2012

Employee LTIP”), and ( 2 ) the 2017 Non-Employee Director Long-Term Incentive Plan (“ 2017 Director LTIP”).

On September 16, 2021 , our shareholders approved the 2021 Employee Long-Term Incentive Plan (“ 2021 Employee LTIP”).

Employee LTIP is effective October 1, 2021 and replaces the 2012 Employee LTIP.

Beginning September

16, 2021 , we permanently ceased issuing any additional shares under the 2012 Employee LTIP.

As of March 31, 2023, we had share-based awards outstanding under the following plans:

(1) the 2017 Non-Employee Director Long-Term Incentive Plan

(“2017 Director LTIP”), (2) the 2012 Employee Long-Term Incentive Plan (“2012 Employee LTIP”), and (3) the 2021 Employee Long-Term Incentive Plan (“2021 Employee LTIP”).

These share-based plans define fair market value as the closing sales price of a share of common stock as quoted on any established stock exchange for such date or the most

recent trading day preceding such date if there were no trades on such date.

2012 Employee LTIP and 2021 Employee LTIP

On September 16, 2021, our stockholders approved the 2021 Employee LTIP that was adopted by the Board on July 21, 2021.

Under the 2021 Employee LTIP, 3,000,000 shares, retroactively adjusted for the stock split, were authorized for grant of incentive stock options, nonqualified stock options, stock

appreciation rights, restricted stock, restricted stock units, performance awards, or other share-based awards to ePlus employees.

On September 13, 2012, our stockholders approved the 2012 Employee LTIP that was adopted by the Board on July 10, 2012.

Under the 2012 Employee LTIP, 3,000,000 shares, retroactively adjusted to reflect the stock split, were authorized for grant of incentive stock options, nonqualified stock options,

stock appreciation rights, restricted stock, restricted stock units, performance awards, or other share-based awards to ePlus employees.

The purpose of these plans is to encourage our employees to acquire a proprietary interest in the growth and performance of ePlus, thus enhancing the

value of ePlus for the benefit of its stockholders, and to enhance our ability to attract and retain exceptionally qualified individuals.

These plans are administered by the Compensation Committee.

Shares issuable under these plans may consist of

authorized but unissued shares or shares held in our treasury.

Under these plans, the Compensation Committee will determine the time and method of exercise or vesting of the awards.

Shares under these plans will not be used to compensate our outside

directors, who may be compensated under the separate 2017 Director LTIP, as discussed below.

The 2021 Employee LTIP was approved by our stockholders on September 16, 2021 and became effective October 1, 2021.

Under the 2021 Employee LTIP, 3,000,000 shares were authorized for grant of incentive stock options, nonqualified stock options, stock appreciation rights, restricted stock,

restricted stock units, performance awards, or other share-based awards to e Plus employees.

The 2021 Employee LTIP replaced the 2012 Employee LTIP that had previously been approved by our stockholders on September 13, 2012.

September 16, 2021, we permanently ceased granting any additional shares under the 2012 Employee LTIP.

The purpose of these plans is to encourage our employees to acquire a proprietary interest in the growth and performance of e Plus, thus enhancing the value of e Plus for the benefit of its stockholders, and to enhance our ability to attract and retain exceptionally qualified individuals.

These plans are

administered by the Compensation Committee.

Shares issuable under these plans may consist of authorized but unissued shares or shares held in our treasury.

Under these plans, the Compensation

Committee will determine the time and method of exercise or vesting of the awards.

Shares under these plans will not be used to compensate our outside directors, who may be compensated under the separate 2017 Director LTIP, as discussed below.

2017 Director LTIP

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received in lieu of cash vests immediately.

STOCK OPTION ACTIVITY

During the years ended March 31, 2022, 2021, and 2020, we did no t grant any stock options, nor did we have any outstanding stock options.

RESTRICTED STOCK ACTIVITY

During the year ended March 31, 2023, we granted 19,804

restricted shares, adjusted for the stock split, under the 2017 Director LTIP and 155,722 restricted shares, adjusted for the stock split,

under the 2012 Employee LTIP, and no shares were granted under the 2021 Employee LTIP.

Cumulatively, as of March 31, 2022, we granted a total of 81,476

restricted shares, adjusted for the stock split, under the 2017 Director LTIP and 2,144,578 restricted shares, adjusted for the stock

split, under the 2012 Employee LTIP.

A summary of the non-vested restricted shares for year ended March 31, 2022, reflecting the stock split, is as follows:

restricted shares under the 2017 Director LTIP and 138,643 restricted shares under the 2021 Employee LTIP.

Cumulatively, as of March 31, 2023, we have granted a total of 101,280 restricted shares under the 2017 Director LTIP, 2,144,578

restricted shares under the 2012 Employee LTIP, and 138,643 restricted shares under the 2021 Employee LTIP.

The following table provides a summary of

the non-vested restricted shares for the year ended March 31, 2023:

Weighted Average

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Nonvested April 1, 2022

Nonvested March 31, 2022

In each of the years ended March 31, 2022, 2021 and 2020, we used the closing stock price on the grant date or, if the grant date falls on a date the

Non-vested March 31, 2023

In each of the years ended March 31, 2023, 2022 and 2021, we used the closing stock price on the grant date or, if the grant date fell on a date the

stock was not traded, the previous day’s closing stock price for the fair value of the award.

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Employee LTIP, the 2021 Employee LTIP, and the 2017 Director LTIP allows us to withhold a sufficient number of shares due to the participant to satisfy their minimum tax withholding obligations.

For the year ended March 31, 2022, we withheld 55,430 shares of common stock, adjusted for the stock split, at a value of $ 2.6 million, which was included in treasury stock.

For the year ended March 31, 2021, we withheld 75,280

shares of common stock, adjusted for the stock split, at a value of $ 2.7 million, which was included in treasury stock.

For the year ended March 31, 2023, we withheld 58,080 shares of common stock at a value of $ 3.3

million, which was included in treasury stock.

For the year ended March 31, 2022, we withheld 55,430 shares of common stock at a value of

$ 2.6 million, which was included in treasury stock.

EMPLOYEE STOCK PURCHASE PLAN

On September 15, 2022, our stockholders approved the 2022 Employee Stock Purchase Plan (“2022 ESPP”) through which eligible employees may purchase shares

of our stock at 6 -month intervals at a discount off the lesser of the closing market price on the first or the last trading day of each

offering period.

The aggregate number of shares of our stock that may be issued to participants under the plan is 2.5 million.

inaugural offering period under the 2022 ESPP is January 1, 2023, to June 30, 2023.

Through March 31, 2023, we had no t yet issued any

shares under the 2022 ESPP.

COMPENSATION EXPENSE

We recognize compensation cost for awards of restricted stock with graded vesting on a straight-line basis over the requisite service period.

account for forfeitures when they occur.

There are no additional conditions for vesting other than service conditions.

During the years ended March 31, 2022, 2021 and 2020, we recognized $ 7.1 million, $ 7.2 million, and $ 8.0 million, respectively, of total share-based compensation expense.

We recognized tax benefits related to share-based compensation of $ 2.0 million, $ 2.2 million, and $ 2.2 million for the years ended March 31, 2022, 2021, and 2020, respectively, which were included as a reduction to our provision for income taxes.

March 31, 2022, the total unrecognized compensation expense related to non-vested restricted stock was $ 8.7 million, which is expected to

be recognized over a weighted-average period of 27 months.

The following table provides a summary of our total share-based compensation expense, including for restricted stock awards and our 2022 ESPP, and

the related income tax benefit for the years ended March 31, 2023, 2022 and 2021 (in thousands):

Year Ended March 31,

Equity-based compensation expense

Income tax benefit

We recognized the income tax benefit as a reduction to our provision for income taxes.

As of March 31, 2023, the total unrecognized compensation expense related to non-vested restricted stock was $ 9.7 million, which

is expected to be recognized over a weighted-average period of 27 months.

We also provide our employees with a contributory 401 (k) profit sharing plan.

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likely of being realized upon ultimate settlement.

Our total gross unrecognized tax benefits recorded for uncertain income tax, and interest and penalties thereon, were negligible as of March 31, 2022,

and March 31, 2021.

We recognize accrued interest and penalties related to unrecognized tax benefits in income tax expense.

As of March 31, 2023, we

do no t have any unrecognized tax benefits for uncertain tax positions.

As of March 31, 2022, our total gross unrecognized tax benefits

recorded for uncertain income tax, and interest and penalties thereon, were negligible.

We recognize accrued interest and penalties related to unrecognized tax benefits as part of income tax expense.

We file income tax returns, including returns for our subsidiaries, with federal, state, local, and foreign jurisdictions.

Tax years 2019, 2020, and

2021 are subjected to examination by federal and state taxing authorities.

The tax years ended March

31, 2020, March 31, 2021, and March 31, 2022, are subject to examination by federal and state taxing authorities.

Various state and local income tax returns are also under examination by taxing authorities.

We do not believe that the outcome of any examination will have a material impact

on our financial statements.

A reconciliation of income taxes computed at the statutory federal income tax rate of 21.0% to the provision for income taxes included in the

consolidated statements of operations is as follows (in thousands, except percentages):

We do not believe that the outcome of any

examination will have a material impact on our financial statements.

A reconciliation of income taxes computed at the statutory federal income tax rate of 21.0 % to the provision for income taxes included in the consolidated statements of operations is as follows (in thousands, except percentages):

Year Ended March 31,

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Total current expense

Total deferred benefit

Total deferred expense (benefit)

Provision for income taxes

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of the existing deferred tax assets.

As of March 31, 2022, we established a valuation allowance of $ 0.3 million, to offset gross deferred

tax assets primarily attributable to cumulative net operating losses at certain of the foreign subsidiaries and foreign tax credit carry forwards.

We believe that it is more likely than not that we will realize the remaining gross deferred tax assets

through generating taxable income or the reversal of existing temporary differences attributable to the gross deferred tax liabilities.

Based on this evaluation as of March 31, 2023, a valuation allowance of $ 0.1 million was recorded, to

offset gross deferred tax assets primarily attributable to net operating losses at certain of the foreign subsidiaries and foreign tax credit carry forwards.

We believe that it is more likely than not that we will realize the remaining gross deferred

tax assets through generating taxable income or the reversal of existing temporary differences attributable to the gross deferred tax liabilities.

FAIR VALUE MEASUREMENTS

We account for the fair values of our assets and liabilities utilizing a three-tier value hierarchy, which prioritizes the inputs used in measuring

The following table provides the fair value of our assets and liabilities measured at fair

value as categorized within the fair value hierarchy as of March 31, 2022, and March 31, 2021 (in thousand s):

The following table provides the fair value of our assets and liabilities measured at

fair value as categorized within the fair value hierarchy as of March 31, 2023, and March 31, 2022 (in thousand s):

Fair Value Measurement Using

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BUSINESS COMBINATIONS

SYSTEMS MANAGEMENT PLANNING (“SMP”)

On December 31, 2020, our subsidiary, e Plus Technology,

inc., acquired certain assets and liabilities of SMP, an established provider of technology solutions and services in upstate New York and the Northeast.

The acquisition enhances e Plus’ footprint across the region, broadens our technology solution offerings especially in the areas of collaboration and supporting virtual employees, and adds to e Plus’ set of commercial, enterprise and state, local, and education customers .

Our sum of consideration transferred was $ 27.0

million consisting of $ 29.0 million paid in cash at closing less $ 2.0 million that was paid back to us in our quarter ended March 31, 2021 related to a working capital adjustment.

Our allocation of

the purchase consideration to the assets acquired and liabilities assumed is presented below (in thousands):

NETWORK SOLUTIONS GROUP

On April 30, 2023, our

subsidiary, ePlus Technology, inc., acquired certain assets and liabilities of the Network Solutions Group (NSG), formerly a business unit of CCI Systems, Inc., a Michigan-based provider of networking services and solutions.

This acquisition will

help drive additional growth for us in the service provider end-markets with enhanced engineering, sales, and services delivery capabilities specific to the industry.

Our preliminary sum for consideration transferred is $ 59.6 million, equal to cash paid at closing.

As of our filing date, our initial accounting for the business combination is incomplete.

On July 15, 2022, our

subsidiary, ePlus Technology, inc., acquired certain assets and liabilities of Future Com, Ltd., a Texas-based provider of cybersecurity solutions, cloud security and security consulting services throughout the US.

Our acquisition provides access

to enhanced engineering, sales, and services delivery capabilities in the South-Central region of the United States, as well as bolstering the skills and expertise surrounding ePlus’ growing cybersecurity practice.

for consideration transferred is $ 13.3 million consisting of $ 13.0 million paid in cash at closing plus an additional $ 0.3 million that

was subsequently paid to the sellers based on adjustments to our determination of the total net assets delivered.

Our allocation of the purchase consideration to the assets acquired and liabilities assumed is presented below (in

Acquisition Date

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Identified intangible assets

Accounts payable and other current liabilities

Performance obligations

Accounts payable and other liabilities

Contract liabilities

Total identifiable net assets

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SEGMENT REPORTING

Our segment information is presented in accordance with a “management approach,” which designates the internal reporting used by the chief operating

decision-maker (“CODM”) for deciding how to allocate resources and for assessing performance.

Our CODM is our Chief Executive Officer and President.

Our segment information is presented in

accordance with a “management approach,” which designates the internal reporting used by the chief operating decision-maker (“CODM”) for deciding how to allocate resources and for assessing performance.

Our CODM is our Chief Executive Officer and

Our CODM conducts our operations through two operating segments- our technology segment and our financing segment.

Our technology segment includes sales of information technology products, third-party software,

third-party maintenance, advanced professional and managed services and our proprietary software to commercial, state, and local governments, and government contractors.

Our financing segment consists of the financing of IT equipment, software and

related services to commercial, state, and local governments, and government contractors.

Our CODM uses several measures to allocate resources and assess performance.

technology segment includes sales of information technology products, third-party software, third-party maintenance, advanced professional and managed services and our proprietary software to commercial, state, and local governments, and government

Our financing segment consists of the financing of IT equipment, software and related services to commercial, state, and local governments, and government contractors.

Our CODM uses several measures to allocate resources and assess

Our reported measure is earnings before taxes.

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Operating income

Other income (expense)

Other income (expense), net

Earnings before tax

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TECHNOLOGY SEGMENT DISAGGREGATION OF REVENUE

We analyze net sales for our technology segment by customer end market and by vendor, as opposed to discrete product and service categories, which are

summarized below (in thousands):

We analyze net sales for our technology segment by customer end market, by type, and by the timing of the transfer of goods and services and our

position as principal or agent, which are summarized below (in thousands):

Year Ended March 31,

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Revenue from contracts with customers

Year Ended March 31,

Cisco Systems

Juniper Networks

Arista Networks

Data Center / Cloud

Collaboration

ePlus services

Revenue from financing and other

Revenue from contracts with customers

Timing and position as principal or agent:

Transferred at a point in time as principal

Transferred at a point in time as agent

Transferred over time as principal

Revenue from contracts with customers

FINANCING SEGMENT DISAGGREGATION OF REVENUE

We analyze our revenues within our financing segment based on the nature of the arrangement, and our revenues from contracts with customers consist of

proceeds from the sale of off-lease equipment.

We analyze our revenues

within our financing segment based on the nature of the arrangement, and our revenues from contracts with customers consist of proceeds from the sale of off-lease equipment.

All revenues from contracts with customers in our financing segment are

recognized at a point in time as principal.

GEOGRAPHIC INFORMATION

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Year Ended March 31,

Our long-lived tangible assets include property and equipment-net, operating leases-net, and equipment that has been returned to us at the

termination of the lease.

Long-lived tangible assets:

Our long-lived tangible assets include property and equipment-net, operating leases-net, and equipment that has been returned to us at the termination

of the lease.

Sales to Verizon Communications Inc.

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Year ended March 31, 2023

These amounts represent the gross profit effect of sales returns during the respective years.

Expected merchandise returns after year-end for sales made before year-end were $ 7.8 million, $ 7.4 million, and $ 6.5 million as of March 31, 2022, 2021, and 2020, respectively.

These amounts represent the gross profit effect of sales returns during the

respective years.

Expected merchandise returns after year-end for sales made before year-end were $ 7.9 million, $ 7.8 million, and $ 7.4 million as

of March 31, 2023, 2022, and 2021, respectively.

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