What changed in this filing

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Item 1A. Risk Factors

2025-03-11 compared with 2024-03-14 · 73 added, 61 removed, 213 unchanged (39% of the section changed)

5 unchanged sentences

Shortages of sourced goods or raw materials from suppliers, interruptions in our manufacturing, and local conditions in the countries in which we operate could adversely affect our results of operations.

An interruption in any of our supply sources or facilities, such as widely occurred during 2021, could adversely affect our results of operations until alternate sources or facilities can be secured.

An interruption in any of our supply sources or facilities could adversely affect our results of operations until alternate sources or facilities can be secured.

Principal raw materials used to manufacture the Company’s products include cotton, polyester, spandex, cotton-synthetic, poly-synthetic blends, textiles, plastic, glass, fabric and metal.

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If we are unable to source our raw materials and finished products from China or if our suppliers are unable to source raw materials from China, it could significantly disrupt our business.

Furthermore, the Company and the Company’s suppliers generally source or manufacture finished goods in parts of the world that have been and may be in the future affected by economic uncertainty, political unrest, logistical challenges (such as port strikes and embargos), foreign currency fluctuations, labor disputes, health emergencies, or the imposition of duties, tariffs or other import regulations by the United States, any of which could result in additional cost or limit our supply of necessary goods and raw materials.

Even if we or our suppliers are able to source raw materials from China, we or they may face increased import duties as a result of changes in U.S.

trade policy.

See “Changes to trade regulation, quotas, duties, tariffs or other restrictions caused by the changing U.S.

and geopolitical environments or otherwise, such as those with respect to China, which may materially harm our revenue and results of operations, such as by increasing our costs and/or limiting the amount of products that we can import.”

Furthermore, the Company and the Company’s suppliers generally source or manufacture finished goods in parts of the world that have been and may be in the future affected by economic uncertainty, political unrest, logistical challenges (such as port strikes and embargos), foreign currency fluctuations, labor disputes, health emergencies, natural disasters, or the imposition of duties, tariffs or other import regulations by the United States or other countries, any of which could result in additional cost or limit our supply of necessary goods and raw materials.

See also “ Risks Relating to Our Industries - Increases in the price of finished goods, raw materials and labor used to manufacture our products could materially increase our costs and decrease our profitability.

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Our most significant trade names are BAMKO® and HPI® within the Branded Products segment, CID Resources within the Healthcare Apparel segment and The Office Gurus® within the Contact Centers segment.

Our most significant trademarks, which are critically important to the marketing and operation of Superior’s Healthcare Apparel segment, are Fashion Seal Healthcare® and Wink™.

For the year ended December 31, 2023, Fashion Seal Healthcare and Wink represented approximately 39% and 43%, respectively, of sales in that segment.

Our most significant trademarks, which are critically important to the marketing and operation of our Healthcare Apparel segment, are Fashion Seal Healthcare® and Wink®.

We cannot assure that our owned or licensed intellectual property or the operation of our business does not infringe on or otherwise violate the intellectual property rights of others.

It is possible that third parties will assert claims against us on such basis;

if they do we cannot assure you that we will be able to successfully resolve such claims.

It is possible that third parties will assert claims against us on such basis, and if they do we cannot assure that we will be able to successfully resolve such claims.

In addition, although we seek international protection of our intellectual property, the laws of some foreign countries do not allow us to protect, defend or enforce our intellectual property rights to the same extent as the laws of the United States.

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If we cannot fill customers’ orders on time, orders may be cancelled and relationships with customers may suffer, which could have an adverse effect on us, especially if the relationship is with a major customer.

Furthermore, if any of our customers experience a significant downturn in their business, or fail to remain committed to our programs or brands, the customer may reduce or discontinue purchases from us, which has happened.

Furthermore, if any of our customers experience a significant downturn in their business, or fail to remain committed to our programs or brands, the customers may reduce or discontinue purchases from us, which has happened.

The reduction in the amount of our products purchased by customers could have a material adverse effect on our business, results of operations or financial condition.

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If we experience problems with our distribution systems, our ability to meet customer expectations, manage inventory and complete sales may be harmed.

Our products are either distributed through our distribution centers in the United States or shipped directly from our vendors to our customers.

Our distribution centers and storage locations include computer-controlled and automated equipment and rely on warehouse management systems to manage supply chain fulfillment operations, which means our operations are complicated, require coordination between our distribution centers and storage locations and are subject to a number of risks related to cybersecurity, the proper operation of software and hardware, including connections between software and/or hardware, electronic or power interruptions or other system failures.

We maintain business interruption insurance, but it may not adequately protect us from the adverse effects that could result from significant disruptions to our distribution system, such as the long-term loss of customers or an erosion of our brand image.

Our products are distributed through third-party logistics centers or our own distribution centers, or are shipped directly from our vendors to our customers.

Our distribution centers and storage locations, as well as those operated by third parties, include computer-controlled and automated equipment and rely on warehouse management systems to manage supply chain fulfillment operations, which means these operations are complicated, require coordination between distribution centers and storage locations and are subject to a number of risks related to cybersecurity, the proper operation of software and hardware, including connections between software and/or hardware, electronic or power interruptions and other system failures.

We maintain business interruption insurance, but it may not adequately protect us from the adverse effects that could result from significant disruptions to our distribution systems, such as the long-term loss of customers or an erosion of our brand image.

Moreover, if we are unable to adequately staff our distribution centers to meet demand or if the cost of such staffing is higher than historical or projected costs, our results of operations could be harmed.

Our third party logistics providers face similar risks, which translates into downstream risk for us.

Operating a distribution center comes with additional potential risks, such as workplace safety issues and employment claims for the failure or alleged failure to comply with labor laws or laws respecting union organizing activities.

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To ensure adequate inventory supply, we must be able to forecast inventory needs and expenses and place orders sufficiently in advance with our suppliers and manufacturers, based on our estimates of future demand for particular products.

Our ability to forecast demand for our products has from time to time been and will continue to be affected by various factors, including unanticipated changes in general market conditions, and economic conditions or consumer confidence in future economic conditions.

Our ability to forecast demand for our products has from time to time been and will continue to be affected by various factors, including unanticipated changes in general market conditions, economic conditions, or consumer confidence in future economic conditions.

Failure to accurately forecast demand may result in inefficient inventory supply or increased costs.

In addition, if we experience increased volatility in shipping times from our suppliers and manufacturers and/or production disruptions, we may experience a shortage of products available for sale.

Alternatively, if we advance the timing of inventory shipments to mitigate perceived freight transit time volatility and/or sales below our expectations, we may experience excess inventory levels.

Inventory levels in excess of customer demand may also result in inventory write-downs or write-offs (as occurred in 2022) and the sale of excess inventory at discounted prices, which would cause our gross margin to suffer and could impair the strength and premium nature of our brands.

Further, lower than forecasted demand could also result in excess manufacturing capacity or reduced manufacturing efficiencies, which could result in lower margins.

Alternatively, if we advance the timing of inventory shipments to mitigate perceived freight transit time volatility or experience sales below our expectations, we may experience excess inventory levels.

Inventory levels in excess of customer demand may also result in inventory write-downs or write-offs and the sale of excess inventory at discounted prices, which would cause our gross margin to suffer and could impair the strength and premium nature of our brands.

Further, lower than forecasted demand could result in excess manufacturing capacity or reduced manufacturing efficiencies, which could result in lower margins.

Conversely, if we underestimate customer demand, our suppliers and manufacturers may not be able to deliver products to meet our requirements, and we may be subject to higher costs in order to secure the necessary production capacity or we may incur increased shipping costs.

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Even if we are able to acquire businesses on favorable terms, managing growth through acquisitions is a difficult process that includes:

integration and training of personnel, combining facility and operating procedures, and additional processes related to the integration of acquired businesses within our existing organization.

Unanticipated issues related to integration may result in additional expense and in disruption to our operations, and may require a disproportionate amount of our management’s attention, any of which could negatively impact our ability to achieve anticipated benefits, such as revenue and cost synergies.

Growth of our business through acquisition generally increases our operating complexity and the level of responsibility for both existing and new management personnel.

integration and training of personnel, combining facility and operating procedures, and taking additional actions related to the integration of acquired businesses within our existing organization.

Unanticipated issues related to integration may result in additional expense and disruption to our operations, and may require a disproportionate amount of our management’s attention, any of which could negatively impact our ability to achieve anticipated benefits, such as revenue and cost synergies.

Growth of our business through acquisitions generally increases our operating complexity and the level of responsibility for both existing and new management personnel.

Managing and sustaining our growth and expansion may require substantial enhancements to our operational and financial systems and controls, as well as additional administrative, operational and financial resources.

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In order to finance such acquisitions, we may need to obtain additional funds either through public or private financings, including bank and other secured and unsecured borrowings and/or the issuance of equity or debt securities.

There can be no assurance that such financings would be available to us on reasonable terms.

There can be no assurance that such financings will be available to us on reasonable terms.

Any future issuances of equity securities or debt securities with equity features may be dilutive to our shareholders.

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The measures we have in place to monitor and protect our information technology systems might not provide sufficient protection from catastrophic events, power surges, viruses, malicious software (including ransomware), attempts to gain unauthorized access to data or other types of cyber-based attacks.

As cyber-attacks become more frequent, sophisticated, damaging and difficult to predict, any such event could negatively impact our business operations, such as by product disruptions that result in an unexpected delay in operations, interruptions in our ability to deliver products and services to our customers, loss of confidential or otherwise protected information, corruption of data and expenses related to the repair or replacement of our information technology systems.

Cyber-attacks are becoming more frequent, sophisticated, damaging and difficult to predict.

Any such event or attack could negatively impact our business operations, such as through product disruptions that result in an unexpected delay in operations, interruptions in our ability to deliver products and services to our customers, loss of confidential or otherwise protected information, corruption of data and expenses related to the repair or replacement of our information technology systems, including payments made in ransomware attacks.

Compromising and/or loss of information could result in loss of sales or legal or regulatory claims which could adversely affect our revenues and profits or damage our reputation.

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territories now have data breach laws that require timely notification to affected individuals, and at times regulators, credit reporting agencies and other bodies, if a company has experienced the unauthorized access or acquisition of certain personal information.

Other state laws include the California Consumer Privacy Act, as amended (“CCPA”).

The CCPA, among other things, contains disclosure obligations for businesses that collect personal information about California residents and affords those individuals new rights relating to their personal information that may affect our ability to collect and/or use personal information.

Other states and the federal government are considering new data privacy and/or security laws.

We will continue to monitor and assess the impact of these laws, which may impose substantial penalties for violations, impose significant costs for investigations and compliance, allow private class-action litigation and carry significant potential liability for our business.

We will continue to monitor and assess the impact of these laws, and any new ones enacted, which may impose substantial penalties for violations, impose significant costs for investigations and compliance, allow private class-action litigation and carry significant potential liability for our business.

Data protection laws enacted outside of the U.S., such as the EU General Data Protection Regulation (the “GDPR”), also might apply to some of our operations or business partners.

Legal requirements in these countries relating to the collection, storage, processing and transfer of personal data/information continue to evolve.

The GDPR imposes, among other things, data protection requirements that include strict obligations and restrictions on the ability to collect, analyze and transfer EU personal data/information, a requirement for prompt notice of data breaches to data subjects and supervisory authorities in certain circumstances, and possible substantial fines for any violations (including possible fines for certain violations of up to the greater of 20 million Euros or 4% of total company revenue).

Other governmental authorities around the world have enacted or are considering similar types of legislative and regulatory proposals concerning data protection.

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Failure to comply with U.S.

and international data protection laws and regulations could result in government enforcement actions (which could include substantial civil and/or criminal penalties), private litigation and/or adverse publicity and could negatively affect our operating results and business.

data protection laws and regulations could result in government enforcement actions (which could include substantial civil and/or criminal penalties), private litigation and/or adverse publicity and could negatively affect our operating results and business.

Our business may be impacted by unforeseen or catastrophic events, including the emergence of pandemics or other widespread health emergencies, extreme weather events or other natural disasters, terrorist attacks, and other unpredicted events.

The occurrence of unforeseen or catastrophic events, such as the emergence of pandemics or other widespread health emergencies (or concerns over the possibility of such pandemics or emergencies), extreme weather events or other natural disasters, terrorist attacks, or other unpredicted events, could create economic and financial disruptions, and could lead to operational difficulties that could impair our ability to source and supply products and services and manage our businesses, and could negatively impact our customers’ ability or willingness to purchase our products and services.

Some of our locations, as well as those of our suppliers, are in locations where they are exposed to hurricanes, earthquakes, floods and other extreme weather events.

For example, our corporate headquarters is located in Florida and we have a manufacturing facility located in Haiti.

Extreme weather and geologic events could make it difficult or impossible to manufacture or deliver products to our customers (including by affecting the ability of our workers to perform at full capacity for a period of time), receive production materials from our suppliers, or perform critical functions, which could adversely affect our business globally or in certain regions.

While we multi-source many of our programs on many of our materials, which we believe better enables us to respond to these types of events, we cannot be sure that our plans will fully protect us from all such disruptions.

We are subject to international, federal, national, regional, state, local and other laws and regulations, and failure to comply with them may expose us to potential liability.

We are subject to international, federal, national, regional, state, local and other laws and regulations affecting our business, including but not limited to those promulgated under the Occupational Safety and Health Act, the Consumer Product Safety Act, the Flammable Fabrics Act, the Textile Fiber Product Identification Act, the rules and regulations of the Consumer Products Safety Commission, the Food, Drug, and Cosmetic Act, the rules and regulations of the Food and Drug Administration (FDA), the Foreign Corrupt Practices Act of 1977 (FCPA), various securities laws and regulations including but not limited to the Securities Exchange Act of 1934, the Securities Act of 1933, and the Nasdaq Stock Market LLC Rules, various labor, workplace and related laws, and environmental laws and regulations.

We are subject to international, federal, national, regional, state, local and other laws and regulations affecting our business, including but not limited to those promulgated under the Occupational Safety and Health Act, the Consumer Product Safety Act, the Flammable Fabrics Act, the Textile Fiber Product Identification Act, the rules and regulations of the Consumer Products Safety Commission, the Food, Drug, and Cosmetic Act, the rules and regulations of the Food and Drug Administration (FDA), various anti-corruption and anti-bribery laws, various securities laws and regulations including but not limited to the Securities Exchange Act of 1934, the Securities Act of 1933, and the rules of the Nasdaq Stock Market LLC, various labor, workplace and related laws, and environmental laws and regulations.

There also are multiple climate change-related laws and regulations in the United States and internationally that either have gone into effect or could go into effect.

The cost to comply with such laws and regulations could be significant and have an adverse effect on our results of operations.

Failure to comply with such laws and regulations may expose us to potential liability and have an adverse effect on our results of operations.

Our business may be impacted by non-performance by manufacturers to whom we made advance payments.

Our business may be impacted by the non-performance of manufacturers to whom we made advance payments.

We have entered into agreements with manufacturers in which we make payments for raw materials and services in advance of the shipment and delivery of finished products.

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While we believe that our employee relations are good, and very few of our employees are currently subject to collective bargaining agreements, unions have traditionally been active in the U.S.

apparel industry and recently have become more active generally.

apparel industry.

Our workforce has been subject to union organization efforts from time to time, and we could be subject to future unionization efforts as our operations expand or change.

Unionization of our workforce could increase our operating costs or constrain our operating flexibility.

Our business may be impacted by unforeseen or catastrophic events, including the emergence of pandemics or other widespread health emergencies, terrorist attacks, extreme weather events or other natural disasters and other unpredicted events.

The occurrence of unforeseen or catastrophic events, such as the emergence of pandemics or other widespread health emergencies (or concerns over the possibility of such pandemics or emergencies), terrorist attacks, extreme weather events or other natural disasters or other unpredicted events, could create economic and financial disruptions, and could lead to operational difficulties (including travel limitations) that could impair our ability to source and supply products and services and manage our businesses, and could negatively impact our customers’ ability or willingness to purchase our products and services.

Some of our locations and those of our suppliers, such as those located in the U.S., Central America and Haiti, also are exposed to hurricanes, earthquakes, floods and other extreme weather events;

the damage that such events could produce could affect the supply of our products and services.

Risks Relating to Our Industries

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Principal raw materials used to manufacture the Company’s finished goods include cotton, polyester, spandex, cotton-synthetic, poly-synthetic blends, textiles, plastic, glass, fabric and metal.

The prices we pay for these fabrics and components and our finished goods are dependent on the market price for the raw materials used to produce them, primarily cotton and chemical components of synthetic fabrics including raw materials such as chemicals and dyestuffs.

The prices we pay for these fabrics and components are dependent on the market price for the raw materials used to produce them, including cotton and chemical components of synthetic fabrics including raw materials such as chemicals and dyestuffs, in addition to any import duties imposed on those fabrics and components that are imported.

These finished goods and raw materials are subject to price volatility caused by weather, supply conditions, government regulations, economic and political climate, currency exchange rates, labor costs, and other unpredictable factors.

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We encounter competition from a number of companies in the geographic areas we serve.

Major competitors for our Branded Products segment include companies such as BDA, Inc., HALO Branded Solutions, Inc., Staples, Inc., Cimpress PLC, HH Global Group Limited and Lands’ End, Inc.

Major competitors for our Branded Products segment include companies such as BDA, Inc., HALO Branded Solutions, Inc., Staples, Inc., Cimpress PLC, HH Global Group Limited, Lands’ End, Inc.

and Workwear Outfitters, LLC.

Major competitors for our Healthcare Apparel segment include companies such as Medline Industries, Inc., Careismatic Brands, Barco Uniforms, Inc., FIGS, Inc., Encompass Medical and Standard Textile Co., Inc.

Major competitors for our Contact Centers segment include companies such as TaskUs, Transparent BPO, Concentrix + Webhelp, Focus Services, Ubiquity, CCI and RDI.

Major competitors for our Contact Centers segment include companies such as TaskUs, Inc., Transparent BPO, Concentrix + Webhelp, Focus Services LLC, Ubiquity, CCI and RDI.

We also compete with a multitude of foreign, regional and local competitors that vary by market.

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companies operate in a variety of ways.

In response to inflationary pressures, the U.S.

Federal Reserve repeatedly has raised interest rates, resulting in an increase in the cost of borrowing for us, our customers, our suppliers, and other companies relying on debt financing.

In light of continuing inflationary pressures, the Federal Reserve may decide to raise rates again.

Inflation and interest rates remain high despite recent abatements.

World events, such as the Russian invasion of Ukraine and the resulting economic sanctions, have impacted the global economy, including by exacerbating inflationary and other pressures.

In addition, the threat of a wider war in the Middle East after the Hamas terrorist attacks on Israel could affect oil prices and have other effects on the global economy.

In addition, the conflict in the Middle East could affect oil prices and have other effects on the global economy.

Both crises have potentially far-reaching impacts on energy and food markets and global trade.

An escalating war in the Middle East, prolonged inflationary conditions, high and/or increased interest rates, additional sanctions or retaliatory measures related to the Russia-Ukraine crisis, or other situations, could further negatively affect U.S.

Conflicts in the Middle East, prolonged inflationary conditions, high and/or increased interest rates, additional sanctions or retaliatory measures related to the Russia-Ukraine crisis, or other situations, could further negatively affect U.S.

and international commerce and exacerbate or prolong the period of high energy prices.

At this time, the extent and duration of these economic and political events and their effects on the economy and the Company are impossible to predict, but the impact on the Company’s business could be material.

Our manufacturing facilities and warehouses in Haiti are at risk of damage or disruption from civil unrest and other occurrences.

Our Healthcare Apparel segment relies on our manufacturing facilities and warehouses in Haiti for the manufacturing and storage of finished goods.

Our manufacturing facilities and warehouses may be damaged or our ability to use or access them may be disrupted as a result of civil unrest or other occurrences in Haiti.

Such events may interfere with our manufacturing processes, information systems, telecommunication services, and product delivery for sustained periods and may also may make it difficult or impossible for employees to reach our business locations.

Damage or destruction that interrupts our manufacturing facilities could adversely affect our reputation, our relationships with our customers, our leadership team’s ability to administer and supervise our business, and/or cause us to incur substantial additional expenditures to repair or replace damaged equipment or facilities or commence production at alternate locations.

While we currently have commercial liability insurance, our insurance coverage may not be sufficient.

Prolonged disruption of our manufacturing processes in Haiti also may entitle some of our customers to amend or terminate their contracts with us.

Worsening conditions in Haiti may also result in the displacement of native Haitians looking for refuge in neighboring Dominican Republic, which may result in the closure of roads and port access which may limit or restrict our normal and recurring business in Haiti.

Any of the above factors may adversely affect our business, results of operations and financial condition.

Changes to trade regulation, quotas, duties, tariffs or other restrictions caused by the changing U.S.

and geopolitical environments or otherwise, such as those with respect to China, may materially harm our revenue and results of operations, such as by increasing our costs and/or limiting the amount of products that we can import.

Our operations are subject to various international trade agreements and regulations, such as the Dominican Republic–Central America Free Trade Agreement (CAFTA-DR), Caribbean Basin Trade Partnership Act (CBTPA), Haitian Hemispheric Opportunity through Partnership Encouragement Act, as amended (HOPE), the Food Conservation and Energy Act of 2008 (HOPE II), the Haiti Economic Lift Program of 2010 (HELP), the African Growth and Opportunity Act (AGOA), the Middle East Free Trade Area Initiative (MEFTA) and the activities and regulations of the World Trade Organization (WTO).

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political environments will not result in a trade agreement or regulation being altered which adversely affects our company.

government may decide to impose or alter existing import quotas, duties, tariffs or other restrictions on products or raw materials sourced from those countries, which include countries from which we import raw materials or in which we manufacture our products.

In fact, effective February 4, 2025 and March 4, 2025, the U.S.

government imposed additional tariffs on certain countries, including China, from which we source products and raw materials.

It may decide to impose or alter those or other import quotas, duties, tariffs or other restrictions on countries from which we source products and/or raw materials or in which we manufacture our products, including China and countries in Latin America.

Any such quotas, duties, tariffs or restrictions could have a material adverse effect on our business, results of operations or financial condition.

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The apparel industry, including branded uniforms and healthcare, is subject to shifting customer demands and evolving fashion trends and our success is also dependent upon our ability to anticipate and promptly respond to these changes.

Failure to anticipate, identify or promptly react to changing trends or styles may result in decreased demand for our products, as well as excess inventories and markdowns, which could result in inventory write-downs which may have a material adverse effect on our business, results of operations and financial condition.

Failure to anticipate, identify or promptly react to changing trends or styles may result in decreased demand for our products, as well as excess inventories and markdowns, which could result in inventory write-downs or write-offs which may have a material adverse effect on our business, results of operations and financial condition.

In addition, if we misjudge consumer preferences, our brand image may be impaired.

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We also compete with companies that utilize emerging technologies and assets, such as artificial intelligence and chatbots.

These competitors may offer products and services that may, among other things, provide automated alternatives to the services that we provide in the marketplace or otherwise change the way that contact centers engage so as to make our outsourced customer contract management solution less attractive to existing and potential customers.

We may face increased competition from these competitors as they mature and expand their capabilities.

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• enter into certain transactions with our affiliates.

Substantially all of the operating assets of the Company are pledged as collateral under our indebtedness.

Substantially all of the operating assets of the Company are pledged as collateral under our credit agreement.

Our credit agreement requires compliance with certain financial ratios and covenants and satisfaction of specified financial tests.

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As a result, our executive officers and directors, and certain of their family members, have significant influence over the election of our Board of Directors, the approval or disapproval of any other matters requiring shareholder approval, and the affairs and policies of our company.

We have identified a material weakness in our internal control over financial reporting.

If we are unable to remediate the material weakness and otherwise maintain an effective system of internal control over financial reporting, it could result in us not preventing or detecting on a timely basis a material misstatement of the Company’s financial statements.

A material weakness is a deficiency, or combination of deficiencies, in internal control over financial reporting, such that there is a reasonable possibility that a material misstatement of the company’s annual or interim financial statements will not be prevented or detected on a timely basis.

As further disclosed in “Item 9A.

Controls and Procedures” of this Annual Report on Form 10-K, management has identified a material weakness relating to segregation of duties, change management and user access within certain proprietary information technology systems of the Contact Centers segment.

While these control deficiencies did not result in a misstatement to the consolidated financial statement, the material weakness could have resulted in a misstatement impacting account balances or disclosures that would have resulted in a material misstatement to the consolidated financial statements that would not have been prevented or detected on a timely basis.

Although we are implementing plans to remediate this material weakness, we cannot be certain of the success of the plans.

If our remedial measures are insufficient to address the material weakness, or if one or more additional material weaknesses or significant deficiencies in our internal control over financial reporting are discovered or occur in the future, or our disclosure controls and procedures are again determined to be ineffective, we may not be able to prevent or identify irregularities or ensure the fair and accurate presentation of our financial statements included in our periodic reports filed with the U.S.

Securities and Exchange Commission.

Additionally, the occurrence of, or failure to remediate, a material weakness and any future material weaknesses in our internal control over financial reporting or determination that our disclosure controls and procedures are ineffective may have other consequences that could materially and adversely affect our business, including an adverse impact on the market price of our common stock, potential actions or investigations by the U.S.

Securities and Exchange Commission or other regulatory authorities, shareholder lawsuits, a loss of investor confidence and damage to our reputation.

We have recently recognized, and may recognize in the future, impairment charges, which could materially adversely affect our financial condition and results of operations.

We have recognized, and may recognize in the future, impairment charges, which could materially adversely affect our financial condition and results of operations.

We assess our intangible assets and long-lived assets for impairment when required by generally accepted accounting principles in the United States (“GAAP”).

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• deteriorating real estate values.

If our assessment of intangible assets or long-lived assets indicates an impairment of the carrying value for which we recognize an impairment charge, this may again adversely affect our financial condition and results of operations, potentially materially so.

If our assessment of intangible assets or long-lived assets indicates an impairment of the carrying value for which we recognize an impairment charge, this may adversely affect our financial condition and results of operations, potentially materially so.

While we have remediated the material weakness identified in 2023 and 2022, we may identify a material weakness in internal control in the future, which could result in us not preventing or detecting on a timely basis a material misstatement of the Company’s financial statements.

A material weakness is a deficiency, or combination of deficiencies, in internal control over financial reporting, such that there is a reasonable possibility that a material misstatement of the Company’s annual or interim financial statements will not be prevented or detected on a timely basis.

We reported a material weakness relating to segregation of duties, change management and user access within certain proprietary information technology systems of the Contact Centers segment in 2023 and 2022.

This material weakness has been remediated as of December 31, 2024.

However, if one or more additional material weaknesses or significant deficiencies in our internal control over financial reporting are discovered or occur in the future, or our disclosure controls and procedures are determined to be ineffective, we may not be able to prevent or identify irregularities or ensure the fair and accurate presentation of our financial statements included in our periodic reports filed with the U.S.

Securities and Exchange Commission.

Securities and Exchange Commission or other regulatory authorities, shareholder lawsuits, a loss of investor confidence and damage to our reputation.

Our share price may change significantly, and our shareholders may not be able to resell shares of our common stock at or above the price they paid or at all, and they could lose all or part of their investment as a result.

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We are unable to predict the likely duration and severity of any disruption in financial markets and adverse economic conditions and the effects they may have on our business and financial condition.

Furthermore, significant or sustained inflation could have an adverse impact on our operating and general and administrative expenses.

Furthermore, increased inflation could have an adverse impact on our operating and general and administrative expenses.

Please see “ Our results of operations could be adversely affected by economic and political conditions globally and the effects of these conditions on our customers ’ businesses and levels of business activity ” above for a description of recent inflationary pressure.

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Our success is largely dependent on the skills, experience and efforts of our senior management and other key personnel.

If, for any reason, one or more senior executive or key personnel was not to remain active in our company, or if we were unable to attract and retain senior management or key personnel or our costs to do so increase significantly, our results of operations could be adversely affected.

If, for any reason, one or more senior executive or key personnel was not to remain active in our company, or if we were unable to attract and retain senior management or key personnel or our costs to do so increased significantly, our results of operations could be adversely affected.

If we are unable to accurately predict our future tax liabilities, become subject to increased levels of taxation or our tax contingencies are unfavorably resolved, our results of operations and financial condition could be adversely affected.

Changes in tax laws or regulations in the jurisdictions in which we do business, including the United States, or changes in how the tax laws are interpreted, could further impact our effective tax rate, further restrict our ability to repatriate undistributed offshore earnings, or impose new restrictions, costs or prohibitions on our current practices and reduce our net income and adversely affect our cash flows.

Changes in tax laws or regulations in the jurisdictions in which we do business, including the United States, or changes in how the tax laws are interpreted, could impact our effective tax rate, restrict our ability to repatriate undistributed offshore earnings, or impose new restrictions, costs or prohibitions on our current practices and reduce our net income and adversely affect our cash flows.

We are also subject to tax audits in the United States and other jurisdictions and our tax positions may be challenged by tax authorities.

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

What changed 10-K

Item 1A. Risk Factors