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Item 1A. Risk Factors

2025-07-28 compared with 2024-07-22 · 108 added, 78 removed, 271 unchanged (41% of the section changed)

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We are exposed to the risk of an economic downturn or deterioration of general macroeconomic conditions, including slower growth or recession, inflation, or decreases in consumer spending power or confidence, which could have a significant impact on our business, financial condition, and results of operations.

Recent inflationary conditions and high interest rates, geopolitical conflicts as further discussed below and increasing diplomatic and trade friction between the U.S.

and China, have caused disruptions in the U.S.

Recent inflationary conditions and high interest rates, geopolitical conflicts as further discussed below and increasing diplomatic and trade friction, including as a result of new and increased tariffs imposed by the U.S.

against China, Mexico, Canada and other countries, pandemics or public health crises, have caused disruptions in the U.S.

and global economy, and uncertainty regarding general economic conditions within some regions and countries in which we operate, including concerns about a potential U.S.

and/or global recession has led, and may continue to lead, to reluctance on the part of some companies to spend on discretionary projects.

Deterioration of or prolonged uncertainty related to the global economy or tightening credit markets could cause some of our clients to experience liquidity problems or other financial difficulties and could further reduce the demand for our services and adversely affect our business in the future.

and/or global recession.

These disruptions and uncertainties have led, and may continue to lead, to reluctance on the part of some companies to spend on discretionary projects.

Deterioration of or prolonged uncertainty related to the global economy or tightening credit markets, including as a result of tariffs or other import restrictions, could cause some of our clients, particularly those reliant on global supply chains, to experience liquidity problems or other financial difficulties and could further reduce the demand for our services and adversely affect our business in the future.

The military incursion by Russia into Ukraine and conflict and unrest in the Middle East could continue to create global economic and market uncertainty in a manner that could adversely affect our operations.

Wars divert international trade and capital flows, disrupt global supply chains, delay companies’ investment and hiring and erode consumer confidence, and periods of elevated geopolitical risks have historically been associated with negative effects on global economic activity.

Although none of our operations are in Russia, Ukraine or the Middle East, the continuation or further escalation of geopolitical tensions, or future instances of political unrest in other geographies, could impact other markets where we do business, including Europe and Asia Pacific, or cause negative global economic effects which may adversely affect our business, financial condition, and results of operations.

Although none of our operations are in Russia, Ukraine or areas of the Middle East experiencing conflict, the continuation or further escalation of geopolitical tensions, or future instances of political unrest in other geographies, could impact other markets where we do business, including Europe and Asia Pacific, or cause negative global economic effects which may adversely affect our business, financial condition, and results of operations.

Economic deterioration at one or more of our clients may also affect our allowance for credit losses and collectability of accounts receivable.

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Downturns in the U.S.

and international economies could adversely affect our evaluation of the recoverability of deferred tax assets, long-lived assets and goodwill.

and international economies have in the past, and could in the future, adversely affect our evaluation of the recoverability of deferred tax assets, long-lived assets and goodwill.

Although the additional tax valuation allowances and the impairment of long-lived assets and goodwill are non-cash expenses, they could materially affect our future financial results and financial condition.

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traditional and internet-

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based staffing firms;

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This could have an adverse effect on our business if we were not able to replace those commitments or to locate other sources of liquidity on acceptable terms.

Our business is subject to risks arising from epidemic diseases, pandemics, or other public health emergencies.

Public health epidemics or pandemics pose the risk that we or our employees and partners may be prevented from conducting business activities at full capacity for an indefinite period of time, including due to the spread of the virus or due to shutdowns or other measures that are requested or mandated by governmental authorities.

Governmental measures that are intended to reduce the spread or otherwise combat a pandemic or epidemic may affect how we operate, including, among other things, by reducing demand for or delaying client decisions to procure our services, or by resulting in cancellations of existing projects.

A future pandemic, epidemic, or other public health emergency could also result in a decline in productivity, which may adversely impact our ability to continue to efficiently serve our clients.

In addition, in connection with the Pandemic, the overall financial condition of some of our clients was adversely impacted, at least for periods of time.

If the financial condition of any of our clients is negatively impacted in the future by a pandemic or epidemic, the ability of these clients to pay outstanding receivables owed to us may be adversely affected.

Risks Related to Human Capital Resources

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Our business involves the delivery of professional services, and our success depends on our ability to provide our clients with highly qualified and experienced consultants who possess the skills and experience necessary to satisfy their needs.

At various times, including as a result of recent shifts by businesses to adopt more workforce agility in response to temporary gaps caused by the tightening labor market, such professionals can be in great demand, particularly in certain geographic areas or if they have specific skill sets.

At various times, including as a result of shifts by businesses to adopt more workforce agility in response to temporary gaps caused when labor markets tighten, such professionals can be in great demand, particularly in certain geographic areas or if they have specific skill sets.

Our ability to attract and retain consultants with the requisite experience and skills depends on several factors including, but not limited to, our ability to:

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There can be no assurance we will be successful in accomplishing any of these factors and, even if we are, we cannot assure we will be successful in attracting and retaining the number of highly qualified and experienced consultants necessary to maintain and grow our business.

Our business could suffer if we lose the services of one or more key members of our senior management.

Our future success depends upon the continued employment of our senior management team.

The unforeseen departure of one or more key members of our senior management team could significantly disrupt our operations if we are unable to successfully manage the transition.

The replacement of members of senior management can involve significant time and expense and create uncertainties that could delay, prevent the achievement of, or make it more difficult for us to pursue and execute on our business opportunities, which could have an adverse effect on our business, financial condition and operating results.

Further, due to legal restrictions prohibiting non-compete agreements in certain jurisdictions, we generally do not have non-compete agreements with our employees, including our senior management team, and, therefore, they could terminate their employment with us at any time and obtain employment with a competitor.

Our ability to retain the services of members of our senior management and other key employees could be impacted by a number of factors, including competitors’ hiring practices or the effectiveness of our compensation programs.

If members of our senior management or other key employees leave us for any reason, they could pursue other employment opportunities with our competitors or otherwise compete against us.

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Our business could suffer if we lose the services of one or more key members of our senior management or key sales professionals.

Our future success depends upon the continued employment of our senior management team, including key client development individuals (“CDIs”).

The unforeseen departure of one or more key members of our senior management team or CDIs could significantly disrupt our operations if we are unable to successfully manage the transition.

The replacement of members of senior management or CDIs can involve significant time and expense and create uncertainties that could delay, prevent the achievement of, or make it more difficult for us to pursue and execute on our business opportunities, which could have an adverse effect on our business, financial condition and operating results.

Further, due to legal restrictions prohibiting non-compete agreements in certain jurisdictions, we generally do not have non-compete agreements with our employees, including our senior management team or CDIs, and, therefore, they could terminate their employment with us at any time and obtain employment with a competitor.

Our ability to retain the services of members of our senior management, CDIs and other key employees could be impacted by a number of factors, including competitors’ hiring practices or the effectiveness of our compensation programs.

If members of our senior management, CDIs or other key employees leave us for any reason, they could pursue other employment opportunities with our competitors or otherwise compete against us.

If we are unable to retain the services of these key personnel or attract and retain other qualified and experienced personnel on acceptable terms, our business, financial condition and operating results could be adversely affected.

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We generally do not have long-term agreements with our clients for the provision of services and our clients may terminate engagements with us at any time.

The success of our business is dependent on our ability to secure new projects from clients or to renew expired contracts with clients.

The success of our business is dependent on our ability to secure new projects from clients or to renew expired or expiring contracts with clients.

For example, our business is likely to be materially adversely affected if we are unable to secure new client projects because of improvements in our competitors’ service offerings, because of our customers’ use of technology or AI instead of external experts, because of a change in government regulatory requirements, because of an economic downturn decreasing the demand for outsourced professional services, or for other reasons.

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On the expiration of a contract, we typically seek a new contract or subcontractor role relating to that client to replace the revenue generated by the expired contract.

There can be no assurance that those expiring contracts we are servicing will continue after their expiration, that the client will re-procure those requirements, that any such re-procurement will not be restricted in a way that would eliminate us from the competition, or that we will be successful in any such re-procurements or in obtaining subcontractor roles.

There can be no assurance that those expiring contracts we are

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servicing will continue after their expiration, that the client will re-procure those requirements, that any such re-procurement will not be restricted in a way that would eliminate us from the competition, or that we will be successful in any such re-procurements or in obtaining subcontractor roles.

Any factor that diminishes client relationships and/or our professional reputation could make it substantially more difficult for us to compete successfully for new engagements and qualified consultants.

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If a client were to terminate, decline to exercise options under, or curtail further performance under one or more of our major contracts, our revenue and operating results could be adversely affected.

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We may be unable to realize the level of the anticipated benefits that we expect from our restructuring initiatives, which may adversely impact our business and results of operations.

In response to changes in industry and market conditions, we have undertaken in the past, and from time to time expect to undertake in the future, restructuring, reorganization, or other strategic initiatives and business transformation plans to realign our resources with our growth strategies, operate more efficiently and control costs.

For example, in fiscal 2024, we initiated a cost reduction plan, including a reduction in force (the "U.S.

Restructuring Plan”) intended to reduce costs and streamline operations.

For example, in fiscal 2025, we initiated a global cost reduction plan (the “2025 Restructuring Plan”), including a reduction in force intended to reduce costs and streamline operations.

Additionally in fiscal 2025, we completed a reorganization of our business, which included forming discrete operational business units, On-Demand Talent, Consulting, Outsourced Services, and Europe & Asia Pacific and implementing management organizational changes and new reporting modules and processes (the “2025 Reorganization”).

The successful implementation of our restructuring activities may from time to time require us to effect business and asset dispositions, workforce reductions, management restructurings, decisions to limit investments in or otherwise exit businesses, office consolidations and closures, and other actions, each of which may depend on a number of factors that may not be within our control.

Any such effort to realign or streamline our organization may result in the recording of restructuring or other charges, such as asset impairment charges, contract and lease termination costs, exit costs, termination benefits, and other restructuring costs.

Any such effort to realign or streamline our organization has resulted in, and may in the future result in, the recording of restructuring or other charges, such as asset impairment charges, contract and lease termination costs, exit costs, termination benefits, and other restructuring costs.

Further, as a result of restructuring initiatives, we may experience a loss of continuity, loss of accumulated knowledge and proficiency, adverse effects on employee morale, loss of key employees and/or other retention issues during transitional periods.

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Further, upon completion of any restructuring initiatives, our business may not be more efficient or effective than prior to the implementation of the plan and we may be unable to achieve anticipated operating enhancements or cost reductions, which would adversely affect our business, competitive position, operating results and financial condition.

For example, in fiscal 2025, we plan to reorganize our business by forming multiple discrete operational business units.

We plan to make management organizational changes and implement new reporting modules and processes to provide discrete information to manage the business.

There can be no assurance that such reorganization will be beneficial to the Company or that such reorganization will not adversely affect our business, competitive position, operating results or financial condition.

Our recent digital expansion and technology transformation efforts may not be successful, which could adversely impact our growth and profitability.

One of our primary areas of focus in recent years is digital expansion, which includes the launching of Project Phoenix, our multi-year technological modernization initiative that requires significant enterprise-wide effort replacing or upgrading core system as well as further development and expanded launch of HUGO, our human cloud platform aimed at

introducing a new way for clients and talent alike to engage with us and expanding go-to-market penetration for the business that we acquired from CloudGo.

With our recent acquisition of Reference Point LLC, we continue making investments in the transformation of our technology systems to keep up with technological changes that impact the needs of our clients, the delivery of our services and the efficiency of our back-office operations.

While we've completed phase 1 of Project Phoenix and have launched system upgrades in North America, we continue to make further investments in the transformation of our technology systems to keep up with technological changes that impact the needs of our clients, the delivery of our services and the efficiency of our back-office operations.

These investments require significant capital expenditures.

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With this initiative, we seek to provide borderless solutions, anytime, anywhere, bringing the best talent to meet our clients’ business needs, based on workload, not zip code.

We also began upgrading to a new cloud-based enterprise-wide operating and Enterprise Resource Planning system.

We continue to upgrade our cloud-based enterprise-wide operating and Enterprise Resource Planning system.

The continued success of these initiatives requires adjusting and strengthening our business operations, financial and talent management systems, procedures, controls and compliance, which may increase our total operating costs and adversely impact our profitability and growth.

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We may not be able to grow our business, manage our growth or sustain our current business.

In 2024, we initiated the U.S.

Restructuring Plan, intended to reduce costs and streamline operations.

In the first quarter of fiscal 2025 we announced a decision to reorganize the Company’s business by forming multiple discrete operational business units.

In fiscal 2025, we initiated the 2025 Restructuring Plan and completed the 2025 Reorganization.

There can be no assurance we will be able to maintain or expand our market presence in our current locations, successfully enter other markets or locations or successfully operate our business virtually without a physical presence in all our markets.

Our ability to continue to grow our business will depend upon an improving global economy and a number of factors, including our ability to:

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ability to continue to grow our business will depend upon an improving global economy and a number of factors, including our ability to:

• grow new client base and penetrate our existing client base;

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• reduced protection for intellectual property rights in some countries;

• health emergencies or pandemics;

• potentially adverse tax consequences;

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• addition of significant amounts of intangible assets, including goodwill, that are subject to periodic assessment of impairment, with such non-cash impairment potentially resulting in a material impact on our future financial results and financial condition;

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• dilution of our stock as a result of issuing equity securities;

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We rely on trademark registrations and common law trademark rights to protect the distinctiveness of our brand.

In fiscal 2020, we launched a significant global rebranding initiative, and in fiscal 2023 we continued our global rebranding with our new tagline ― Dare to Work Differently.

We have undertaken global rebranding initiatives, including the launch of our tagline ― Dare to Work Differently in fiscal 2022.

However, there can be no assurance that our rebranding initiative will result in a positive return on investment.

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If such a claim were made and we were required to change our name or any of our marks, the value of our brand may diminish and our results of operations and financial condition could be adversely affected.

Risks Related to Information Technology, Cybersecurity and Data Protection

Risks Related to AI, Information Technology, Cybersecurity and Data Protection

Our computer hardware and software and telecommunications systems are susceptible to damage, breach or interruption.

The management of our business is aided by the uninterrupted operation of our computer and telecommunication systems.

These systems are vulnerable to security breaches, cyber or other security incidents, natural disasters or other catastrophic events, or other interruptions or damage stemming from power outages, equipment failure or unintended or unauthorized usage by employees.

In addition, we rely on information systems to process, transmit and store electronic

information and to communicate among our locations around the world and with our clients, partners and consultants.

From time to time, we experience cybersecurity incidents, interruptions in our operations and system failures, and any loss or breach of data and interruptions or delays in our business or that of our clients, or both, resulting from such incidents, interruptions or failures could have a material impact on our business and operations and materially adversely affect our revenue, profits and operating results.

We use and rely on various computer, telecommunications and other information systems in the conduct and management of our business.

These information systems are vulnerable to security breaches, cyber or other security incidents, natural disasters or other catastrophic events, or other interruptions or damage stemming from power outages, equipment failure or unintended or unauthorized usage by employees.

We also rely on information systems and services provided by third parties.

We rely on these information systems to process, transmit and store electronic information and to communicate among our locations around the world and with our clients, partners and consultants.

From time to time, we or our third-party providers experience cybersecurity incidents, interruptions in our operations and system failures, and any loss or breach of data and interruptions or delays in our business or that of our clients, or both, resulting from such incidents, interruptions or failures could have a material impact on our business and operations and materially adversely affect our revenue, profits and operating results.

The breadth and complexity of our information systems increases the potential risk of security incidents.

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However, we expect to continue to be subject to cybersecurity incidents and attacks and there is no assurance that similar incidents or attacks, or new cybersecurity threats will not arise that, will not cause material impacts in the future.

Security incidents, including ransomware attacks, cyber-attacks or cyber-intrusions by computer hackers, foreign governments, cyber terrorists or others with grievances against the industry in which we operate or us in particular, may disable or damage the proper functioning of our networks and systems and result in a significant disruption of our business and potentially significant payments to restore the networks and systems.

Security incidents, including

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ransomware attacks, cyber-attacks or cyber-intrusions by computer hackers, foreign governments, cyber terrorists or others with grievances against the industry in which we operate or us in particular, may disable or damage the proper functioning of our networks and systems and result in a significant disruption of our business and potentially significant payments to restore the networks and systems.

We review and update our systems and have implemented processes and procedures to protect against cybersecurity incidents and unauthorized access to our data, although we cannot provide assurances that these efforts will be successful.

While we maintain insurance coverage for cybersecurity incidents that we believe is appropriate for our operations, our insurance coverage may not cover all potential claims against us, may require us to meet a deductible or may not continue to be available to us at a reasonable cost.

In addition, the transition of our workforce to a hybrid work environment, where our employees are often working remotely, has also increased our vulnerability to risks related to our hardware and software systems, including risks of phishing and other cybersecurity attacks.

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this access could lead to potential unauthorized disclosure of confidential, personal, Company or client information that others could use to compete against us or for other disruptive, destructive or harmful purposes and outcomes.

Any such disclosure or damage to our networks and systems could subject us to third-party claims against us and reputational harm, including statutory damages under California or other state law, regulatory penalties and significant costs of incident investigation, remediation and notification.

Any such disclosure or damage to our networks and systems could subject us to third-party claims and governmental investigations and actions against us and reputational harm, including statutory damages under California or other state law, regulatory penalties and significant costs of incident investigation, remediation and notification.

If these events occur, our ability to attract new clients or talent may be impaired or we may be subjected to damages or penalties.

In addition, system-wide or local failures of these information technology systems could have a material adverse effect on our business, financial condition, results of operations or cash flows.

We use and expect to expand our use of AI and machine learning in our business and challenges with properly managing the development and use of these technologies could result in harm to our reputation, business or clients, legal liability and adversely affect our results of operations.

We use AI and machine learning solutions in, and we may in the future integrate additional AI and/or machine learning solutions into, our service and solution offerings, and these AI applications may become more important in our operations over time.

As an emerging technology, AI can be costly to implement and we cannot be sure that our use of AI will increase efficiency or provide any other benefits.

The use of AI tools and technology presents many challenges and risks to our business, including the risk of bias, miscalculations, data errors and other unintended consequences.

Unintended or improper use of AI may lead to regulatory issues, reputational or financial harm, and operational disruptions.

The rapid development and adoption of AI and AI-adjacent technology, and of AI’s competitive use cases, may make it more difficult for us to compete in our industry.

Our competitors may have greater success implementing and using AI technology than us, which could harm our ability to compete effectively and could adversely affect our results of operations.

Further, we may become reliant on AI technology and tools in the future.

The legal, regulatory and compliance environment surrounding the design and use of AI technology is evolving and complex.

Our obligation to comply with the evolving regulatory landscape could entail significant costs and negatively affect our business.

In addition, there has been a significant increase in AI-related litigation and government regulatory actions targeting the design, deployment and other uses of AI, and claiming liability under numerous areas of the law, such as consumer protection, product liability, privacy, intellectual property, securities and defamation.

The occurrence of any of these risks could have an adverse effect on our business, reputation and results of operations.

Legal and Regulatory Risks

Failure to comply with data privacy laws and regulations could have a materially adverse effect on our reputation, results of operations or financial condition, or have other adverse consequences.

Our employees may have access or exposure to personally identifiable or otherwise confidential information and customer data and systems, the misuse or improper disclosure of which could result in legal liability.

The collection, hosting, transfer, disclosure, use, storage and security of personal information required to provide our services is subject to

federal, state and foreign data privacy laws.

These laws, (“Privacy and Data Protection Requirements”) which are not uniform, do one or more of the following:

regulate the collection, transfer (including in some cases, the transfer outside the country of collection), processing, storage, use and disclosure of personal information, and require notice to individuals of privacy practices and in some cases consent to collection of personal information;

In the course of our business, we process, use, disclose, transfer or store personal information required to provide our services.

Such personal information is subject to federal, state and foreign data privacy laws which regulate the collection, transfer (including in some cases, the transfer outside the country of collection), processing, storage, use and disclosure of personal information;

require notice to individuals of privacy practices and in some cases consent to collection of personal information;

give individuals certain access, correction and deletion rights with respect to their personal information;

and prevent the use or disclosure of personal information, or require providing opt-outs for the use and disclosure of personal information, for secondary purposes such as marketing.

and prevent the use or disclosure of personal information, or require providing opt-outs for the use

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and disclosure of personal information, for secondary purposes such as marketing.

Under certain circumstances, some of these laws require us to provide notification to affected individuals, data protection authorities and/or other regulators in the event of a data breach.

In many cases, these laws apply not only to third-party transactions, but also to transfers of information among us and our subsidiaries.

Laws and regulations in this area are evolving and generally becoming more stringent.

For example, the European General Data Protection Regulation (the “GDPR”) requires us to meet stringent requirements regarding (i) our access, use, disclosure, transfer, protection, or otherwise processing of personal information;

and (ii) the ability of data subjects to exercise their related various rights such as to access, correct or delete or limit the use of their personal data.

Laws and regulations in this area are evolving and generally becoming more stringent and complex, and are not uniform, which can increase the cost of compliance and the risks of non-compliance, and may impact our products and services and the effectiveness of our marketing efforts.

For example, the European General Data Protection Regulation (the “GDPR”) requires us to meet stringent requirements regarding (i) our access, use, disclosure, transfer, security and processing of personal information;

and (ii) the ability of data subjects to exercise their related various rights such as to access, correct or delete or limit the use of their personal information.

Under the GDPR and the United Kingdom’s version of the GDPR, information transfers from the European Union and the United Kingdom to the United States are generally prohibited unless certain measures are followed.

The 2018 California Consumer Privacy Act and California Privacy Rights Act of 2020 provide individuals similar rights with respect to the processing of their personal data.

In addition to California, Colorado, Virginia, Utah and Connecticut, previously enacted comprehensive privacy legislation and in 2023 and 2024, Delaware, Florida, Indiana, Iowa, Kentucky, Maryland, Minnesota, Montana, New Jersey, New Hampshire, Oregon, Rhode Island, Tennessee and Texas enacted such laws.

The 2018 California Consumer Privacy Act and California Privacy Rights Act of 2020 provide individuals similar rights with respect to the processing of their personal information.

In addition, many other states have also enacted comprehensive privacy legislation.

There is also the possibility of federal privacy legislation and increased enforcement by the Federal Trade Commission under its power to regulate unfair and deceptive trade practices.

Key markets in the Asia Pacific region have also recently adopted GDPR-like legislation, including China’s new Personal Information Protection Law.

Key markets in the Asia Pacific region have also adopted GDPR-like legislation, including China’s Personal Information Protection Law.

Failure to meet Privacy and Data Protection Law requirements could result in significant civil penalties (including fines up to 4% of annual worldwide revenue under the GDPR) as well as criminal penalties.

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While we seek to remain in compliance with such legal and regulatory requirements, there may be changes to regulatory schemes in jurisdictions in which we operate that are outside our control and our efforts to remain in compliance with such changes may adversely affect our business and operating results.

We have a robust Code of Business Conduct and Ethics, Compliance Policy for Anti-Bribery and Anti-Corruption Laws, Insider Trading Policy, Code of Vendor Conduct and Ethics and other policies and procedures that are designed to educate and establish the standards of conduct that we expect from our executive officers, outside directors, employees, consultants, independent contractors and vendors.

We have a Code of Business Conduct and Ethics, Compliance Policy for Anti-Bribery and Anti-Corruption Laws, Insider Trading Policy, Code of Vendor Conduct and Ethics and other policies and procedures that are designed to educate and establish the standards of conduct that we expect from our executive officers, outside directors, employees, consultants, independent contractors and vendors.

These policies require strict compliance with U.S.

and local laws and regulations applicable to our business operations, including those laws and regulations prohibiting improper payments to government officials.

In addition, as a corporation whose securities are registered under the Exchange Act and publicly traded on the Nasdaq Stock Market, our executive officers, outside directors, employees, consultants and independent contractors are required to comply with the prohibitions against insider trading of our securities.

In addition, under U.S.

federal securities laws, our executive officers, outside directors, employees, consultants and independent contractors are required to comply with the prohibitions against insider trading of our securities.

Nonetheless, we cannot assure our stakeholders that our policies, procedures and related training programs will ensure full compliance with all applicable legal requirements.

Illegal or improper conduct by our executive officers, directors, employees, consultants or independent contractors, or others who are subject to our policies and procedures could

damage our reputation in the U.S.

Illegal or improper conduct by our executive officers, directors, employees, consultants or independent contractors, or others who are subject to our policies and procedures could damage our reputation in the U.S.

and internationally, which could adversely affect our existing client relationships or adversely affect our ability to attract and retain new clients, or lead to litigation or governmental or regulatory proceedings in the U.S.

or foreign jurisdictions, which could result in civil or criminal penalties, including substantial monetary awards, fines and penalties, as well as disgorgement of profits.

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We may be legally liable for damages resulting from the actions of our employees, the performance of projects by our consultants or for our clients’ mistreatment of our personnel.

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due to the labor laws, tax regulations and customs of the international markets we serve.

However, changes to foreign laws governing the definition or classification of independent contractors, or judicial decisions regarding independent contractor classification, could require classification of consultants

as employees.

Such reclassification could have an adverse effect on our business and results of operations, could require us to pay significant retroactive wages, taxes and penalties, and could force us to change our contractor business model in the foreign jurisdictions affected.

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The exclusive forum provisions in our Amended and Restated Bylaws could limit our stockholders’ ability to bring a claim in a judicial forum that it finds favorable for disputes with the Company or its directors, officers or other employees.

Our Bylaws provide that, unless we otherwise consent in writing, the Court of Chancery of the State of Delaware (or, if such court does not have subject matter jurisdiction thereof, the federal district court of the State of Delaware) shall be the sole and exclusive forum for (A) any derivative action or proceeding brought on our behalf, (B) any action or proceeding asserting a claim of breach of a fiduciary duty owed by any of our current or former directors, officers or other employees to us or our stockholders, (C) any action or proceeding asserting a claim arising pursuant to any provision of the Delaware General Corporation Law, our Amended and Restated Certificate of Incorporation or Amended and Restated Bylaws, or (D) any action or proceeding asserting a claim governed by the internal affairs doctrine (the “Delaware Exclusive Forum Provision”).

The Delaware Exclusive Forum Provision is intended to apply to claims arising under Delaware state law and would not apply to claims brought pursuant to the Exchange Act or the Securities Act of 1933, as amended (the “Securities Act”), or any other claim for which the federal courts have exclusive jurisdiction.

Further, our Amended and Restated Bylaws provide that, unless we otherwise consent in writing, the federal district courts of the United States shall be the exclusive forum for the resolution of any complaint asserting a cause of action under the Securities Act (the “Federal Forum Provision”).

Our decision to adopt the Federal Forum Provision followed a decision by the Supreme Court of the State of Delaware holding that such provisions are facially valid under Delaware law and means that suits brought by stockholders to enforce any duty or liability created under the Securities Act must be brought in federal court and cannot be brought in state court.

The exclusive forum provisions in our Amended and Restated Bylaws will not relieve us of our duties to comply with the federal securities laws and the rules and regulations thereunder and, accordingly, actions by our stockholders to enforce any duty or liability created by the Exchange Act or the rules and regulations thereunder must be brought in federal courts.

Our stockholders will not be deemed to have waived our compliance with these laws, rules and regulations.

The exclusive forum provisions in our Amended and Restated Bylaws may limit a stockholder's ability to bring a claim in a judicial forum of its choosing for disputes with us or our directors, officers or other employees, which may discourage such lawsuits.

In addition, stockholders who do bring a claim in the Court of Chancery of the State of Delaware pursuant to the Delaware Exclusive Forum Provision could face additional litigation costs in pursuing any such claim, particularly if they do not reside in or near Delaware.

The court in the designated forum under our exclusive forum provisions may also reach different judgments or results than would other courts, including courts where a stockholder would otherwise choose to bring the action, and such judgments or results may be more favorable to us than to our stockholders.

Further, the enforceability of similar exclusive forum provisions in other companies’ organizational documents has been challenged in legal proceedings, and it is possible that a court could find any of our exclusive forum provisions to be inapplicable to, or unenforceable in respect of, one or more of the specified types of actions or proceedings.

If a court were to find all or any part of our exclusive forum provisions to be inapplicable or unenforceable in an action, we might incur additional costs associated with resolving such action in other jurisdictions.

Risks Related to Our Corporate and Capital Structure

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• prohibit cumulative voting in the election of directors which, if not prohibited, could allow a minority stockholder holding a sufficient percentage of a class of shares to ensure the election of one or more directors;

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• require that any action required or permitted to be taken by our stockholders must be effected at a duly called annual or special meeting of stockholders and may not be effected by any consent in writing;

• state that special meetings of our stockholders may be called only by the Chairman of the Board of Directors, by our Chief Executive Officer, by the Board of Directors after a resolution is adopted by a majority of the total number of authorized directors, or by the holders of not less than 10% of our outstanding voting stock;

• state that special meetings of our stockholders may be called only by the Chair of the Board of Directors, by our Chief Executive Officer, by the Board of Directors after a resolution is adopted by a majority of the total number of authorized directors, or by the holders of not less than 10% of our outstanding voting stock;

• establish advance notice requirements for submitting nominations for election to the Board of Directors and for proposing matters that can be acted upon by stockholders at a meeting;

• provide that certain provisions of our certificate of incorporation and bylaws can be amended only by supermajority vote (a 66 2/3% majority) of the outstanding shares.

In addition, our Board of Directors can amend our bylaws by majority vote of the members of our Board of Directors;

• provide that certain provisions of our Amended and Restated Certificate of Incorporation and Amended and Restated Bylaws can be amended only by supermajority vote (a 66 2/3% majority) of the outstanding shares.

In addition, our Board of Directors can amend our Amended and Restated Bylaws by majority vote of the members of our Board of Directors;

• allow our directors, not our stockholders, to fill vacancies on our Board of Directors;

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The terms of our Credit Facility impose operating and financial restrictions on us, which may limit our ability to respond to changing business and economic conditions.

We currently have a $175.0 million senior secured loan (the “Credit Facility”) which matures on November 12, 2026.

We are subject to various operating covenants under the Credit Facility which restrict our ability to, among other things, incur liens, incur additional indebtedness, make certain restricted payments, merge or consolidate and make dispositions of assets.

The Credit Facility also requires us to comply with financial covenants limiting our total funded debt, minimum interest coverage ratio and maximum leverage ratio.

Any failure to comply with these covenants may constitute a breach under the Credit Facility, which could result in the acceleration of all or a substantial portion of any outstanding indebtedness and termination of revolving credit commitments under the Credit Facility.

Our inability to maintain our Credit Facility could materially and adversely affect our liquidity and our business.

Our Credit Facility bears a variable rate of interest that is based on the Secured Overnight Financing Rate (“SOFR”) which may have consequences for us that cannot be reasonably predicted and may adversely affect our liquidity, financial condition, and earnings.

Borrowings under our Credit Facility bear interest at a rate per annum of either, at our election, (i) Term SOFR (as defined in the credit agreement evidencing the Credit Facility (the “Credit Agreement”)) plus a margin or (ii) the Base Rate (as defined in the Credit Agreement), plus a margin, with the applicable margin depending on our consolidated leverage ratio.

Prior to July 2, 2025, we had a $175.0 million senior secured loan (the “2021 Credit Facility”) which was scheduled to mature on November 12, 2026.

On July 2, 2025, we entered into a new credit agreement that provides for a secured revolving loan, available in an amount up to the lesser of $50.0 million and a borrowing base formula tied to eligible receivables (the “New Credit Facility”), maturing on November 30, 2029.

We are subject to various operating covenants under the New Credit Facility which restrict our ability to, among other things, incur liens, incur additional indebtedness, make certain restricted payments, merge or consolidate and make dispositions of assets.

The New Credit Facility also requires us to comply with financial covenants limiting our minimum fixed charge coverage ratio and maximum total net leverage ratio.

Any failure to comply with these covenants may constitute a breach under the New Credit Facility, which could result in the acceleration of all or a substantial portion of any outstanding indebtedness and termination of revolving credit commitments under the New Credit Facility.

Our inability to maintain our New Credit Facility could materially and adversely affect our liquidity and our business.

Our New Credit Facility bears a variable rate of interest that is based on the Secured Overnight Financing Rate (“SOFR”) which may have consequences for us that cannot be reasonably predicted and may adversely affect our liquidity, financial condition, and earnings.

Borrowings under our Credit Facility bear interest at a rate per annum of either, at our election, (i) Term SOFR (as defined in the New Credit Facility) plus a margin ranging from 1.25% to 2.5% or (ii) the Base Rate (as defined in the New Credit Facility), plus a margin ranging from 0.25% to 1.5%, with the applicable margin depending on our Consolidated EBITDA (as defined in the New Credit Facility).

Since the initial publication of SOFR, daily changes in the rate have, on occasion, been more volatile than daily changes in comparable benchmark or market rates, and SOFR over time may bear little or no relation to the historical actual or historical indicative data.

Additionally, our Credit Agreement includes a credit adjustment on SOFR due to LIBOR representing an unsecured lending rate while SOFR represents a secured lending rate.

It is possible that the

volatility of SOFR and the applicable credit adjustment could result in higher borrowing costs for us, and could adversely affect our liquidity, financial condition, and earnings.

It is possible that the volatility of SOFR and the applicable credit adjustment could result in higher borrowing costs for us, and could adversely affect our liquidity, financial condition, and earnings.

We could be negatively affected as a result of activist shareholders.

We have in the past and may in the future be subject to legal and business challenges in the operation of our company due to actions instituted by activist shareholders or others.

Responding to such actions have been and could in the future be costly and time-consuming, may not align with our business strategies and has diverted and may in the future divert the attention of the Board and management from the pursuit of our business strategies.

Perceived uncertainties as to our future direction as a result of shareholder activism may lead to the perception of a change in the direction of the business or other instability and may affect our relationships with vendors, clients and prospective and current employees and consultants.

We may be unable to or elect not to pay our quarterly dividend payment.

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We can give no assurance that dividends will be declared and paid in the future.

The failure to pay the quarterly dividend, reduction of the quarterly dividend rate or the discontinuance of the quarterly dividend could adversely affect the trading price of our common stock.

The failure to pay the

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quarterly dividend, reduction of the quarterly dividend rate or the discontinuance of the quarterly dividend could adversely affect the trading price of our common stock.

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 1A. Risk Factors