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Item 9A. Controls and Procedures

2025-03-11 compared with 2024-03-14 · 30 added, 30 removed, 146 unchanged (29% of the section changed)

2 unchanged sentences

The Company conducted an evaluation, under supervision and with the participation of the Company’s principal executive officer, Michael Benstock, and the Company’s principal financial officer, Michael Koempel, of the effectiveness of the Company’s disclosure controls and procedures (as defined in Rule 13a-15(e) and 15d-15(e) under the Exchange Act) as of the end of the period covered by this report (the “Evaluation Date”).

Based on such evaluation, the Company’s principal executive officer and principal financial officer concluded that, as of the Evaluation Date, the Company’s disclosure controls and procedures were not effective because of the material weakness in the Company’s internal control over financial reporting described below and as previously disclosed in the Company's Annual Report on Form 10-K for the year ended December 31, 2022.

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

As of December 31, 2022, management 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.

The Company determined that management’s review controls over these areas are not designed effectively to detect a material misstatement related to the completeness, accuracy, and presentation of the financial statements.

This material weakness existed as of December 31, 2023.

Notwithstanding the identified material weakness, management, including our principal executive officer and principal financial officer have determined, based on the procedures we have performed, that the consolidated financial statements included in this Annual Report on Form 10-K present fairly, in all material respects, our financial condition, results of operations and cash flows at December 31, 2023 and for the periods presented in accordance with U.S.

Based on such evaluation, the Company’s principal executive officer and principal financial officer concluded that, as of the Evaluation Date, the Company’s disclosure controls and procedures were effective to ensure that information the Company is required to disclose in its filings with the SEC under the Exchange Act is recorded, processed, summarized and reported, within the time periods specified in the SEC’s rules and forms, and to ensure that information required to be disclosed by the Company in the reports that it files or submits under the Exchange Act is accumulated and communicated to the Company’s management, including its principal executive officer and principal financial officer, as appropriate to allow timely decisions regarding required disclosure.

Changes in Internal Control over Financial Reporting

The Company’s management, under the oversight of the Audit Committee, took the following actions to remediate the material weakness relating to certain proprietary information technology systems of the Contact Centers segment identified as of December 31, 2022:

(i) deployed enhanced change management controls and reassessed approval authority levels in order to better manage access and program changes within our proprietary system;

(ii) implemented processes and controls to better identify and manage segregation of duties;

and (iii) designed and implemented additional enhanced review and monitoring controls.

Except as discussed above there were no changes in the Company’s internal control over financial reporting during the quarter ended December 31, 2024, that have materially affected, or are reasonably likely to materially affect, the Company’s internal control over financial reporting.

Management’s Report on Internal Control over Financial Reporting

7 unchanged sentences

Management conducted an evaluation of the effectiveness of the Company’s internal control over financial reporting based on the criteria set forth in Internal Control – Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission.

Based on this evaluation, and as described further above, 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.

Given the material weakness, we have concluded that internal control over financial reporting was ineffective as of December 31, 2023.

Ongoing Remediation Efforts with Respect to the Material Weakness

The Company’s management, under the oversight of the Audit Committee, has taken the following actions to remediate the material weakness relating to certain proprietary information technology systems of the Contact Centers segment identified as of December 31, 2022:

(i) deployed enhanced change management software and reassessed approval authority levels in order to better manage access and program changes within our proprietary system;

(ii) implemented processes and controls to better identify and manage segregation of duties;

and (iii) designed and implemented additional enhanced review and monitoring controls.

While the Company was able to test the design effectiveness of the enhanced controls, the material weakness will not be considered remediated until the enhanced controls operate for a sufficient period of time, and management has concluded, through testing, that the related controls are effective.

Therefore, the material weakness existed as of December 31, 2023.

The Company will monitor the effectiveness of its remediation plan and will refine its remediation plan as appropriate.

The Company’s independent registered public accounting firm, Grant Thornton LLP, has issued a report on the effectiveness of the Company’s internal control over financial reporting, which is included “Item 8.

Financial Statements and Supplementary Data” of this Annual Report on Form 10-K.

Changes in Internal Control over Financial Reporting

Except as discussed above under “Ongoing Remediation Efforts with Respect to the Material Weakness,” there were no changes in the Company’s internal control over financial reporting during the quarter ended December 31, 2023, that have materially affected, or are reasonably likely to materially affect, the Company’s internal control over financial reporting.

Based on this evaluation, management concluded that the Company’s internal control over financial reporting was effective as of December 31, 2024.

Other Information

24 unchanged sentences

Report of Independent Registered Public Accounting Firm

Consolidated Statements of Comprehensive Income (Loss) for the years ended December 31, 2023 and 2022

Consolidated Statements of Comprehensive Income for the years ended December 31, 2024 and 2023

Consolidated Balance Sheets as of December 31, 2024 and 2023

20 unchanged sentences

Severance Protection Agreement with Michael Benstock, dated November 23, 2005, filed as Exhibit 99.1 to the Registrant’s Current Report on Form 8-K filed on November 28, 2005 and incorporated herein by reference.

Severance Protection Agreement with Andrew D.

Demott, Jr., dated November 23, 2005, filed as Exhibit 99.4 to the Registrant’s Current Report on Form 8-K filed on November 28, 2005 and incorporated herein by reference.

2013 Incentive Stock and Awards Plan of the Registrant filed as Exhibit 10.1 to the Registrant’s Current Report on Form 8-K filed on May 7, 2013, and incorporated herein by reference.

11 unchanged sentences

Stock Purchase Agreement by and among CID Resources, Inc., CID Resources Holdings LLC, the Direct and Indirect Equityholders of CID Resources Holdings LLC and Superior Uniform Group, Inc., dated as of May 2, 2018, filed as Exhibit 2.1 to the Form 8-K filed on May 3, 2018 and incorporated herein by reference.

Employment Agreement, effective July 1, 2021, between Superior Group of Companies, Inc.

and Philip Koosed, filed as Exhibit 10.1 to the Registrant’s Quarterly Report on Form 10-Q for the quarter ended September 30, 2021 and incorporated herein by reference.

Employment Agreement, effective July 1, 2021, between The Office Gurus, LLC and Dominic Leide, filed as Exhibit 10.2 to the Registrant’s Quarterly Report on Form 10-Q for the quarter ended September 30, 2021 and incorporated herein by reference.

10.18.1*,†, #

Amendment, dated November 4, 2024, to Employment Agreement between The Office Gurus, LLC and Dominic Leide.

Change in Control Agreement, made as of July 8, 2021, between Superior Group of Companies, Inc.

3 unchanged sentences

Amended and Restated Performance Share Award, dated July 1, 2021, granted to Dominic Leide, filed as Exhibit 10.5 to the Registrant’s Quarterly Report on Form 10-Q for the quarter ended September 30, 2021 and incorporated herein by reference.

Performance Share Award, dated July 1, 2021, granted to Philip Koosed, filed as Exhibit 10.6 to the Registrant’s Quarterly Report on Form 10-Q for the quarter ended September 30, 2021 and incorporated herein by reference.

Restricted Stock Award, dated July 1, 2021, granted to Philip Koosed, filed as Exhibit 10.7 to the Registrant’s Quarterly Report on Form 10-Q for the quarter ended September 30, 2021 and incorporated herein by reference.

Restricted Stock Award, dated July 8, 2021, granted to Jordan Alpert, filed as Exhibit 10.8 to the Registrant’s Quarterly Report on Form 10-Q for the quarter ended September 30, 2021 and incorporated herein by reference.

2 unchanged sentences

Employment Agreement, effective July 1, 2021, between BAMKO, LLC and Jake Himelstein, filed as Exhibit 10.11 to the Registrant’s Quarterly Report on Form 10-Q for the quarter ended September 30, 2021 and incorporated herein by reference.

10.27.1*,†, #

Amendment, dated November 4, 2024, to Employment Agreement between BAMKO, LLC and Jake Himelstein.

Superior Group of Companies, Inc.

6 unchanged sentences

Credit Agreement, dated as of August 23, 2022, among Superior Group of Companies, Inc., the Guarantors party thereto, the Lenders party thereto, and PNC Bank, National Association, as administrative agent for the Lenders filed as Exhibit 10.1 to the Registrant’s Current Report on Form 8-K filed on August 24, 2022, and incorporated herein by reference.

Employment Agreement, effective February 13, 2024, between Superior Group of Companies, Inc.

and Michael Koempel, filed as Exhibit 10.1 to the Registrant’ s Current Report on Form 8-K filed on February 15, 2024, and incorporated herein by reference.

Performance Share Award, dated May 6, 2024, granted to Michael Benstock, filed as Exhibit 10.1 to the Registrant’ s Quarterly Report on Form 10-Q for the quarter ended March 31, 2024 and incorporated herein by reference.

Performance Share Award, dated May 6, 2024, granted to Michael Koempel, filed as Exhibit 10.1 to the Registrant’ s Quarterly Report on Form 10-Q for the quarter ended March 31, 2024 and incorporated herein by reference.

Restricted Stock Award, dated November 4, 2024, granted to Dominic Leide.

Restricted Stock Award, dated November 4, 2024, granted to Jake Himelstein.

Employment Agreement, effective May 13, 2022, between Superior Group of Companies, Inc.

and Catherine Beldotti Donlan.

10.40.1*,†, #

Amendment, dated February 15, 2024, to Employment Agreement between Superior Group of Companies, Inc.

and Catherine Beldotti Donlan.

Performance Share Award, dated February 15, 2024, granted to Catherine Beldotti Donlan

Employment Letter, dated February 13, 2024, between Superior Group of Companies, Inc.

and Jordan Alpert.

Code of Business and Ethical Conduct of the Registrant, filed as Exhibit 14.1 to the Form 8-K filed on August 6, 2018 and incorporated herein by reference.

Superior Group of Companies, Inc.

Insider Trading Policy.

Subsidiaries of the Registrant.

51 unchanged sentences

/s/ Todd Siegel

/s/ Robin Hensley

Todd Siegel, March 11, 2025

Robin Hensley, March 13, 2024

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

What changed 10-K

Item 9A. Controls and Procedures