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Item 1A. Risk Factors

2026-03-17 compared with 2025-02-24 · 296 added, 226 removed, 225 unchanged (70% of the section changed)

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Our business is subject to change, risks, and uncertainties, as described herein.

The risks factors that the Company considers material include, but are not limited to, the following:

The primary risk factors that the Company considers material include, but are not limited to, the following:

Company-Specific Risk Factors

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• Our profitability is dependent on our ability to obtain adequate pricing for our products and services and to improve our cost structure;

• We have outsourced a significant portion of our manufacturing operations and increasingly rely on third-party manufacturers, subcontractors, and suppliers;

• We have outsourced a material portion of our manufacturing operations and significantly rely on third-party manufacturers, subcontractors, and suppliers;

• We may not achieve the expected benefits of our restructuring and transformation plans, including Reinvention;

• Our level of indebtedness could adversely affect our financial condition and reduce our financial flexibility.

• Our level of debt could adversely affect our financial condition and reduce our financial flexibility.

Regulatory Risk Factors

• The international nature of our business subjects us to a number of risks, including unfavorable political, regulatory, and tax conditions in foreign countries;

• Tariffs or other restrictions on foreign imports could negatively impact our financial performance.

• The international nature of our business subjects us to a number of risks, including unfavorable political, regulatory, currency, and tax conditions in foreign countries;

• Tariffs or other restrictions on foreign imports have and could continue to negatively impact our financial performance.

Risks Related to our Acquisition of Lexmark

• Our acquisition of Lexmark International II, LLC (Lexmark) (the Lexmark Acquisition) may present certain risks to our business and operations if the integration process or anticipated synergies fail to meet our expectations;

• We have incurred a substantial amount of debt in connection with the financing of the Lexmark Acquisition.

Risks Related to Ownership of our Common Stock and our Warrants

• The trading price for the Warrants may bear little or no relationship to traditional valuation methods, or to the market price of our Common Stock, and therefore the trading price of the Warrants may fluctuate significantly following their issuance;

• Hedging arrangements relating to the Warrants may affect the value and volatility of our Common Stock;

• The issuance of Common Stock upon the exercise of the Warrants may depress our stock price;

• Future issuances of additional warrants may adversely affect the market price of the Warrants and the market price of our Common Stock, but there may be no adjustment to the Warrant Exercise Rate for such issuances;

• The market price for our Common Stock may be volatile and subject to future declines, and the value of an investment in our Common Stock and corresponding derivative securities may decline.

General Risk Factors

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• Our failure to maintain an adequate system of internal control over financial reporting, could adversely affect our ability to accurately report our results.

Risks Related to our Pending Acquisition of Lexmark

• The Lexmark acquisition may not be completed and the equity purchase agreement may be terminated in accordance with its terms;

• The Lexmark acquisition may present certain risks to our business and operations prior to the closing and, if consummated, after the closing;

• We will incur a substantial amount of indebtedness in connection with the financing of the Lexmark Acquisition.

• The identification of an error could result in a material weakness and subject the Company to increased regulatory scrutiny as well as adversely affect investor confidence.

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Company-Specific Risk Factors

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Our business and financial performance depend on worldwide economic conditions, which affect the demand for our products and services in the markets we serve as well as the cost and availability of inputs to our business.

Prolonged or more severe economic weakness and uncertainty, including economic slowdowns or recessions, global market volatility, rising inflation and interest rates, employment, and other adverse economic conditions, may result in decreased demand for our products and services, logistical and supply-related challenges, and increased difficulty with financial forecasting.

Prolonged or more severe economic weakness and uncertainty, including economic slowdowns or recessions, global market volatility, tariffs, government shutdowns, rising inflation, interest rates, unemployment, and other adverse economic conditions, may result in decreased demand for our products and services, logistical and supply-related challenges, and increased difficulty with financial forecasting.

Moreover, the global macroeconomy has a significant impact on interest rates, borrowing costs, and availability and cost of capital, all of which could have an adverse impact on our business.

In addition, inflation may adversely affect customers’ financing costs, cash flows, and profitability, which could adversely impact their operations and our ability to collect receivables.

Rising interest rates could have a dampening effect on overall economic activity and/or the financial condition of our customers, either or

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both of which could negatively affect customer demand for our products and our customers’ ability to repay obligations to us.

These conditions may result in reduced consumer and business confidence and spending in many countries, a tightening in the credit markets, a reduced level of liquidity in many financial markets, high volatility in credit, fixed income and equity markets, currency exchange rate fluctuations, and global economic uncertainty.

In addition, longer term disruptions in the capital and credit markets could adversely affect our access to liquidity needed for our business.

Interest rates may rise, which could have a dampening effect on overall economic activity and/or the financial condition of our customers, either or both of which could negatively affect customer demand for our products and our customers’ ability to repay obligations to us.

Adverse economic conditions may result in reduced consumer and business confidence and spending, a tightening in the credit markets, a reduced level of liquidity in financial markets, high volatility in credit, fixed-income and equity markets, currency exchange rate fluctuations, and global economic uncertainty.

In addition, long-term disruptions in the capital and credit markets could adversely affect our access to liquidity needed for our business.

If financial institutions that have extended credit commitments to us are adversely affected by the conditions of the U.S.

and international capital markets, they may become unable to fund borrowings under their credit commitments to us, which could have an adverse impact on our financial condition and our ability to borrow additional funds, if needed, for working capital, capital expenditures, acquisitions, research and development and other corporate purposes.

The global supply chain has experienced and may continue to experience pronounced disruptions impacting service providers, logistics, and the flow, cost, and availability of supplies and products.

Our business depends on its timely supply of equipment, services, and related products to meet the technical and volume requirements of our customers.

Shortages of parts, materials, and services needed to manufacture and service our products, as well as delays and unpredictability of shipments due to transportation interruptions, have adversely impacted, and may continue to adversely impact, our suppliers’ ability to meet our requirements, and in turn our ability to meet our customers’ needs.

Moreover, supply chain constraints may continue to increase costs of logistics and parts for our products, which costs we may not be able to pass on to our customers.

and international capital markets, they may become unable to fund borrowings under their credit commitments to us, which could have an adverse impact on our financial condition and our ability to borrow additional funds, for working capital, capital expenditures, acquisitions, research and development and other corporate purposes.

The global supply chain may experience pronounced disruptions impacting service providers, logistics, and the flow, cost, and availability of supplies and products.

Our business depends on its timely supply of equipment, services, and related products, including semiconductors, to meet the technical and volume requirements of our customers.

Shortages of parts, materials, and services needed to manufacture and service our products, as well as delays, have adversely impacted, and may continue to adversely impact, our suppliers’ ability to meet our requirements, and in turn our ability to meet our customers’ needs.

Moreover, supply chain constraints may increase costs for our products, which we may not be able to pass on to our customers.

We may experience further disruptions to our manufacturing operations, supply chain, and/or distribution channels in the future, and these disruptions may be prolonged.

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Although the use of hedging transactions limits our downside risk, their use may also limit future revenues.

If we fail to successfully develop new and existing products, technologies, and service offerings, we may be unable to retain current customers and gain new customers and our revenues would decline.

If we fail to successfully develop new products, technologies, and service offerings, we may be unable to retain current customers and gain new customers.

We operate in an environment of significant competition, driven by rapid technological developments, changes in industry standards, and demands of customers to become more efficient.

Our primary competitors are exerting increased competitive pressure in targeted areas and are entering new markets, and emerging competitors may introduce new technologies, business models, or other innovations.

Our competitors include large international companies, some of which have significant financial resources and compete with us globally to provide document processing products and services in each of the markets we serve.

We compete primarily on the basis of technology, performance, price, quality, reliability, brand, distribution, and customer service and support.

Our future success is largely dependent upon our ability to compete in the markets we currently serve, to promptly and effectively react to changing technologies and customer expectations, and to expand into additional market segments.

To remain competitive, we must develop or acquire new services, applications, and products and periodically enhance our existing offerings.

If we are unable to compete successfully through existing new sales channels, including new partnerships, we could lose market share and important customers to our competitors, and such loss could materially adversely affect our results of operations and financial condition.

If we are unable to compete successfully through existing and new sales channels, we could lose market share and important customers to our competitors, and such loss could materially adversely affect our results of operations and financial condition.

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The process of developing new high-technology products, software, services, and solutions, and enhancing existing hardware and software products, services, and solutions is complex, costly, and uncertain, and any failure by us to accurately anticipate customers' changing needs and emerging technological trends could significantly harm our market share, results of operations, and financial condition.

These changing market trends are also opening new, adjacent, and ancillary markets for our products, services, and software, which requires us to accurately anticipate our customers' changing needs and emerging technological trends.

Our business model requires us to commit resources before knowing whether our initiatives will result in products that are commercially successful and generate the revenues required to provide desired returns.

Changing technological trends may lead to new, adjacent, and ancillary markets for our products, services, and software, requiring us to accurately anticipate our customers' evolving needs.

In addition, our sales strategy requires us to simplify our coverage model and expand into adjacent markets with new products, services, and technology such as integrated IT infrastructure solutions, Intelligent Document Processing, multi-channel client communication services and other workplace productivity solutions.

Our ability to develop or acquire new products, services, and technologies for these adjacent markets through new or existing partners may require the investment of significant resources which may not lead to the successful development of new technologies, products, or services.

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Our ability to develop or acquire new products, services, and technologies for these adjacent markets through new or existing partners may require the investment of significant resources which may not lead to the development of successful new technologies, products, or services.

Our digital services strategy involves developing and deploying essential products and services that address the productivity challenges of a hybrid workplace and distributed workforce.

We also expect to extend our IT and digital services presence in the mid- market through organic and inorganic investments.

Our future success depends on our ability to make the investments and commit the necessary resources to execute our business strategy in this highly competitive market.

We also expect to extend our IT and digital services presence in the mid-market through organic and inorganic investments over time.

Our future success depends on our ability to make such investments and commit the necessary resources to execute our business strategy in this highly competitive market.

Despite this investment, the process of developing new products, services, and technologies is inherently complex and uncertain, and there are a number of risks to which we are subject, including the risk that our products, services, or technologies will not successfully satisfy our customers’ needs, conform to evolving preferences or technologies, or gain market acceptance, which could adversely affect our results of operations and financial condition.

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Our success depends on our ability to obtain adequate pricing for our products and services that will provide a reasonable return to our shareholders.

Changes in market conditions, including tariffs, inflation, interest rates, foreign currency exchange movements, and global supply chain disruptions, may exert pressure on the margins we obtain for our products and services.

Changes in market conditions, including tariffs, inflation, interest rates, foreign currency exchange movements, and global supply chain disruptions have and may continue to exert pressure on the margins we obtain for our products and services.

Cost-reduction and pricing actions we undertake may not prove sufficient to offset the adverse impacts of such market conditions.

Our ability to sustain and improve profit margins is dependent on a number of factors, including geography mix, our ability to continue to improve the cost efficiency of our operations, our ability to sustain pricing increases across our portfolio of products and services in a competitive and inflationary environment, our success in diversifying our suite of products and services, the additional costs imposed by supply chain disruptions, the proportion of high-end, mid and entry-level equipment sales, and IT Solutions-related equipment sales (i.e., product and services mix), post-sale revenue trends and our ability to successfully complete information technology initiatives.

If any of these factors adversely materialize or if we are unable to achieve and maintain productivity or efficiency improvements, our ability to offset labor cost inflation, potential materials cost increases and competitive price pressures would be impaired, all of which could adversely affect our results of operations and financial condition.

Supply chain disruptions and interest rate increases have increased the cost of materials and components required to manufacture our products, transportation of components and products, and labor associated with all steps of the supply chain.

Our ability to sustain and improve profit margins is dependent on a number of factors, including geographic mix, our ability to continue to improve the cost efficiency of our operations, our ability to sustain pricing increases across our portfolio of products and services in a competitive and inflationary environment, our success in diversifying our suite of products and services, the additional costs imposed by supply chain disruptions, the proportion of high-end, mid- and entry-level equipment sales, and IT Solutions-related equipment sales (i.e., product and services mix), post sale

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revenue trends, and our ability to successfully complete information technology initiatives.

If any of these adverse developments materialize or if we are unable to achieve and maintain productivity or efficiency improvements, our ability to offset labor cost inflation, potential materials cost increases and competitive price pressures would be impaired, all of which could adversely affect our results of operations and financial condition.

Supply chain disruptions and interest rate increases have increased the cost of the materials and components required to manufacture our products, transportation of components and products, and labor associated with all steps of the supply chain.

We continually review our operations with a view towards reducing our cost structure, including reducing our employee base, exiting certain businesses and/or geographies, seeking more favorable terms in our current and future supply contracts, improving process and system efficiencies, and outsourcing some internal functions.

If we are unable to control the cost of and obtain adequate pricing for our products and services or if our cost-cutting efforts negatively impact our business, it could materially adversely affect our results of operations and financial condition.

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We have outsourced a significant portion of our manufacturing operations and increasingly rely on third-party manufacturers, subcontractors, and suppliers.

We have outsourced a significant portion of our manufacturing operations to third parties, such as FUJIFILM Business Innovation Corp.

We have outsourced a material portion of our manufacturing operations and significantly rely on third-party manufacturers, subcontractors, and suppliers.

Xerox engages in global manufacturing operations, which are capital-intensive, involving long lead times, and are subject to interdependencies with customers, labor, and suppliers.

We have outsourced a material portion of our manufacturing operations to third parties, such as FUJIFILM Business Innovation Corp.

(formerly Fuji Xerox Co., Ltd.).

In the normal course of business, we regularly reevaluate our relationships with these third parties and have discussions with other third parties in order to maintain competitive tension and seek more optimal terms.

There is no guarantee that such discussions will lead to better arrangements, and our existing suppliers could react negatively to any alternative arrangements we seek to negotiate with other third parties.

In addition, we could incur significant costs in order to transition from one third-party manufacturing partner to another.

We have experienced, and may continue to experience, cost increases from our third-party manufacturing partners and we may not be able to pass on all such cost increases to our customers.

In addition, we could incur significant costs in order to transition from one third-party manufacturing partner to another and in sourcing manufacturing would be capital-intensive and require significant lead time.

We face the risk that our third-party manufacturing partners may not be able to develop or manufacture products satisfying all of our requirements, quickly respond to changes in customer demand, and obtain supplies and materials necessary for the manufacturing process.

In addition, in the normal course of business and exacerbated by supply chain disruptions, our partners may experience labor shortages and/or disruptions, transportation cost increases, materials cost increases, and/or manufacturing cost increases that could lead to higher prices for our products and/or lower reliability of our products.

In addition, our partners may experience labor shortages and/or disruptions, transportation cost increases, materials cost increases, and/or manufacturing cost increases that could lead to higher prices for our products and/or lower reliability of our products.

Further, since certain third parties to whom we have outsourced manufacturing are also our competitors in the print market, or may become competitors in the future, we could experience product disruption as a result of competitive pressures that increase the cost of the products supplied.

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We may be unable to attract and retain key personnel while our business model undergoes significant changes.

Xerox is undergoing significant changes in our business model and, accordingly, current and prospective employees may experience uncertainty about their future and may have other opportunities available to them given the competitive labor market.

Xerox is undergoing significant changes in our business model, including as a result of the Lexmark Acquisition, and, accordingly, current and prospective employees may experience uncertainty about their future and may pursue other opportunities.

Our success is dependent, among other things, on our ability to attract, develop and retain highly qualified senior management and other key employees.

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Our ability to do so also depends on how well we maintain a strong corporate culture and corporate brand that is attractive to employees.

Hiring and training of new employees has been adversely impacted by global economic uncertainty, the tight labor market caused by low unemployment, and changes to office environments and workplace trends precipitated by COVID-19.

The departure of existing key employees or the failure of potential key employees to accept employment with Xerox, despite our recruiting efforts, could have a material adverse impact on our business, financial condition, and operating results.

We may not achieve the expected benefits of our restructuring and transformation plans, including Reinvention, which may adversely affect our business.

We engage in restructuring actions, as well as other transformation efforts, such as Reinvention, in order to reduce our cost structure, manage cash flow, achieve operating efficiencies, and align our business to fit with our operating plan.

In addition, these actions are expected to simplify our organizational structure, upgrade our IT infrastructure and redesign our business processes.

As a result of these initiatives, we may experience a loss of continuity, loss of accumulated knowledge and/or inefficiency during transitional periods.

Transformation and restructuring may require a significant amount of time and focus from both management and other employees, which may divert attention from operating and growing our business.

The wide-ranging nature and number of actions underway at any point in time may become difficult for the organization to satisfactorily manage and implement, as these actions may have impacts across the organization, processes and systems that are not apparent by individual project but may have unintended consequences in the aggregate.

Furthermore, the expected savings associated with these initiatives may be offset to some extent by business disruption during the implementation phase as well as investments in new processes and systems until such time as the initiatives are fully implemented and stabilized.

Hiring and retraining new employees will continue to be a challenge due to competitive labor markets for critical skills, ongoing operating model changes, and heightened competition for leadership and digital talent.

The departure of existing key employees or the failure of potential key employees to accept employment with Xerox,

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Moreover, we are adopting new pricing strategies, distribution models, and changes in our partner models.

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despite our recruiting efforts, could have a material adverse impact on our business, financial condition, and operating results.

We may not achieve the expected benefits of Reinvention, which may adversely affect our business.

We engage in transformation and restructuring efforts such as Reinvention to reduce cost, simplify our structure, and offerings, achieve operating efficiencies, diversify our business, and facilitate the "mix shift" to increase profitability and sustainable cash flow.

Reinvention is intended to simplify our organizational structure, upgrade our IT infrastructure and redesign our business processes.

As a result of our Reinvention initiatives, we may experience disruptions, inefficiencies, or other setbacks during transitional periods.

Reinvention requires a significant amount of time and focus from both management and other employees, which may divert attention from operating and growing our business.

Furthermore, the timing and amount of project savings associated with transformation or restructuring initiatives such as Reinvention may be offset by business disruptions during the implementation phase, required initial or ongoing investments in new processes and systems or otherwise.

Moreover, we are adopting new pricing strategies, distribution models, go-to-market models, and changes in our partner models.

The market may not respond as expected to such actions.

Changes in our pricing structure or approach may not align with customer expectations or industry standards, leading to reduced demand or customer dissatisfaction.

If we fail to achieve some or all of the expected benefits of our restructuring and transformation plans, it could have a material adverse effect on our competitive position, business, financial condition, results of operations and cash flows.

If we fail to achieve some or all of the expected benefits of Reinvention, it could have a material adverse effect on our competitive position, business, financial condition, results of operations and cash flows.

Among our Reinvention initiatives is the implementation of a new Enterprise Resource Planning (ERP) system.

ERP implementations are complex, labor-intensive and time-consuming projects and involve substantial expenditures on system software and implementation activities.

ERP implementations are complex, labor-intensive and time-consuming projects.

The ERP system is critical to our ability to provide important information to our management, obtain and deliver products, provide services and customer support, send invoices and track payments, fulfill contractual obligations, accurately maintain books and records, provide accurate, timely and reliable reports on our financial and operating results, and otherwise operate our business.

ERP implementations also require transformation of business and financial processes in order to reap the benefits of the ERP system.

ERP implementations also require transformation of business and financial processes to reap the benefits of the ERP system.

Any such implementation involves risks inherent in the conversion to a new ERP, including loss of information and potential disruption to our normal operations.

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Any of these consequences could have a material adverse effect on our results of operations and financial condition.

As part of our efforts to streamline operations and reduce costs, we have offshored and outsourced certain of our operations, services and other functions through arrangements with third parties (e.g., TCS and HCL) and we will continue to evaluate additional offshoring or outsourcing possibilities in the future.

If our outsourcing partners fail to perform their obligations in a timely manner or at satisfactory quality levels or if we are unable to attract or retain sufficient personnel with the necessary skill sets to meet our offshoring or outsourcing needs, the quality of our services, products, and operations, as well as our reputation, could suffer.

As part of our efforts to streamline operations and reduce costs, in 2024 we launched a Global Business Services (GBS) organization with the goal to centralize, standardize and streamline the Company’s support and operational functions across regions, business units and service lines, thereby lowering operating costs, improving quality and enabling continuous improvement.

Historically, we have offshored and outsourced certain of our operations, services, and other functions through arrangements with third parties (e.g., TCS and HCL) and we will continue to evaluate the arrangements in the future.

Through the acquisition of Lexmark we plan to leverage their model of global capability centers in the Philippines, Hungary, and India for engineering, IT, cybersecurity, sales operations and service delivery, among other functions.

If the transition to these centers leads to disruption and the service does not meet the needs of our customers, or if we are unable to attract or retain sufficient personnel with the necessary skill sets, our reputation could suffer.

In addition, much of our offshoring takes place in developing countries and as a result may also be subject to geopolitical uncertainty.

Diminished service quality from offshoring and outsourcing could have an adverse material impact to our operating results due to service interruptions and negative customer reactions.

Our government contracts are subject to termination rights, audits, and investigations, which, if exercised, could negatively impact our reputation and reduce our ability to compete for new contracts.

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While these projects are often planned and executed as multi-year projects, government entities usually reserve the right to change the scope of or terminate these projects for lack of approved funding and/or at their convenience.

Changes in government or political developments, including budget deficits, shortfalls or uncertainties, government spending reductions (e.g., Congressional sequestration of funds under the Budget Control Act of 2011), government shutdowns, or other debt or funding constraints, could result in lower governmental sales and in our projects being reduced in price or scope or terminated altogether, which also could limit our recovery of incurred costs, reimbursable expenses and profits on work completed prior to the termination.

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governmental sales and in our projects being reduced in price or scope or terminated altogether, which also could limit our recovery of incurred costs, reimbursable expenses and profits on work completed prior to the termination.

Additionally, government agencies routinely audit government contracts.

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government, direct or indirect, is subject to specific laws and regulations with numerous and unique compliance requirements relating to formation, administration and performance of U.S.

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federal or federally funded contracts.

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We have historically funded our financing business through a combination of sales and securitizations of finance receivables, capital markets offerings, cash generated from operations and cash on hand.

Our current sourcing strategy is centered on selling existing and newly originated finance receivables under long term arrangements with financing partners.

Our ability to continue to offer customer financing and be successful in the placement of equipment, software, and IT services with customers seeking to finance those transactions through Xerox is largely dependent on our ability to source funding at a reasonable cost.

Our current sourcing strategy is centered on selling existing and newly originated finance receivables under long term arrangements with financing partners, which may impact the future revenues of the financing business.

If our credit rating declines, the credit market becomes more volatile, or other events occur that reduce the demand for, or our funding partners' ability to provide at attractive rates on, customer financing, it may adversely impact our finance business and results of operations, however, there are alternative sources of funding available to the majority of our customers, which could reduce the overall impact to the broader Xerox business.

Our level of indebtedness could adversely affect our financial condition and reduce our financial flexibility.

As of December 31, 2024, our total debt was $3.4 billion, which primarily consisted of $2.6 billion of Senior and Unsecured Debt and approximately $813 million of Secured Borrowings.

In the future, we may incur additional indebtedness for organic or inorganic growth or otherwise.

Our level of indebtedness could affect our flexibility and operations in several ways, including the following:

• a significant portion of our cash flows could be used to service our indebtedness;

• the covenants contained in the agreements governing our outstanding indebtedness may limit our ability to borrow additional funds, dispose of assets, pay dividends, and make certain investments;

• our debt covenants may also affect our flexibility in planning for, and reacting to, changes in the economy and in our industry;

Our level of debt could adversely affect our financial condition and reduce our financial and operational flexibility.

As of December 31, 2025, our total debt was $4.2 billion, which primarily consisted of $2.5 billion of unsecured debt and approximately $1.7 billion of secured borrowings.

In February 2026, Xerox Corporation entered into a joint venture arrangement with certain investors including certain funds and accounts managed by Angelo, Gordon & Co., L.P.

(collectively, TPG), under which Xerox Corporation contributed certain intellectual property and related assets, including the trademarks in respect of the Xerox brand in exchange for $ 405 million aggregate principal amount of senior secured term loans.

Refer to Note 26 – Subsequent Events in the Consolidated Financial Statements for additional information regarding the joint venture arrangement.

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In the future, we may incur additional debt.

Our debt could affect our financial and operational flexibility in several ways, including the following:

• a significant portion of our cash flows could be used to service our debt;

• the covenants contained in the agreements governing our outstanding debt may limit our ability to borrow additional funds, dispose of assets, pay dividends, and make certain investments;

• our debt covenants may inhibit our ability to plan for and react to changes in the economy and in our industry;

• our debt covenants may limit our ability to structure investments, dispositions, financings, and other transactions as well as our treasury operations;

• a high level of debt could lead to a decrease in our credit rating, which could result in increased borrowing costs and/or impair our ability to obtain new financing and impact contracting terms with vendors, suppliers, customers service providers, and other third parties;

• a high level of debt would increase our vulnerability to general adverse economic and industry conditions;

• a high level of debt may place us at a competitive disadvantage compared to our competitors that may be less leveraged and therefore may be able to take advantage of opportunities that our indebtedness would prevent us from pursuing;

• a high level of debt may impair our ability to obtain additional financing in the future for working capital, capital expenditures, debt service requirements, acquisitions, or general corporate or other purposes.

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The effect of inflation on interest rates could increase our financing costs over time, either through near-term borrowings on our ABL and TLB, refinancing of our existing borrowings, or the issuance of new debt.

In addition to our debt service obligations, our operations require substantial expenditures on a continuing basis.

Our ability to make scheduled debt payments, to refinance our obligations with respect to our indebtedness and to fund capital and non‑capital expenditures necessary to maintain the condition of our operating assets and properties, as well as to provide capacity for the growth of our business, depend on our financial and operating performance.

We may not be able to generate sufficient cash flows to pay the interest on our debt, and future

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working capital borrowings or debt or equity financing may not be available to pay or refinance such debt at attractive rates or at all.

Moreover, our operations require substantial expenditures on a continuing basis.

Our ability to service debt make scheduled debt payments, refinance our obligations with respect to our debt, and fund capital and non‑capital expenditures necessary to maintain the condition of our operating assets and properties, as well as to provide capacity for the continuity and growth of our business, depend on our financial and operating performance.

If we are unable to generate sufficient cash flows to repay our debt when due, we may not be able to pay or refinance such debt at attractive rates or at all.

We need to maintain adequate liquidity in order to meet our operating cash flow requirements, repay maturing debt and meet other financial obligations, such as payment of dividends to the extent declared by our Board of Directors.

If we fail to comply with the covenants contained in our various debt agreements, it may adversely affect our liquidity, results of operations, and financial condition.

Our liquidity is a function of our cash on-hand and our ability to successfully generate cash flows from a combination of efficient operations and continuing operating improvements, access to capital markets and funding from third parties, which includes securitizations and sales of our finance receivables.

Our liquidity is a function of our cash on-hand, our ability to successfully generate cash flows from a combination of efficient operations and continuing operating improvements, availability under our $425 million asset-based revolving credit facility (the ABL), access to capital markets and funding from third parties, which includes securitizations and sales of our finance receivables.

We believe our liquidity (including operating and other cash flows that we expect to generate) will be sufficient to meet operating requirements as they arise;

however, our ability to maintain sufficient liquidity going forward will be subject to the general liquidity of and on-going changes in the credit markets as well as general economic, financial, competitive, legislative, regulatory, and other market factors that are beyond our control.

Our $425 million asset-based revolving credit agreement (the ABL), dated as of May 22, 2023, with Citibank, N.A., as administrative agent and collateral agent, and the lenders and issuing banks party thereto, as amended, contains a fixed charge coverage ratio of 1x, as defined in the ABL, measured as of the last day of each fiscal quarter during which excess availability is less than an amount equal to the greater of (A) $31.875 million and (B) 10% of the Line Cap (the lesser of the aggregate amount of Revolving Commitments and the then-applicable Borrowing Base).

Both the ABL and our $550 million term loan B credit agreement, dated as of November 17, 2023, with Jefferies Finance LLC as administrative agent and collateral agent, and the lenders party thereto (the TLB), are supported by guarantees from us and certain US, Canadian, English, German and Belgian subsidiaries, and by security interests in substantially all of our and such US, Canadian and English, German and Belgian subsidiaries’ assets, subject to certain exceptions.

The ABL, the TLB and the indenture governing our 2029 Notes also impose operating and financial restrictions on us and may limit our ability to engage in acts that may be in our best interest, including restrictions on our ability to:

however, in addition to generating cash flows from our operations, our ability to maintain sufficient liquidity going forward will be subject to the general liquidity of and on-going changes in the credit markets as well as general economic, financial, competitive, legislative, regulatory, and other market factors that are beyond our control.

Our ABL, is governed by that certain Credit Agreement dated as of May 22, 2023, by and among Xerox Corporation, as borrower, Xerox Holdings Corporation, certain of Xerox Corporation's subsidiaries, as guarantors, Citibank, N.A., as administrative agent and collateral agent, and the lenders and issuing banks party thereto, as amended, contains a fixed charge coverage ratio of 1x, as defined in the ABL, measured as of the last day of each fiscal quarter during which excess availability is less than an amount equal to the greater of (A) $31.875 million and (B) 10% of the Line Cap (the lesser of the aggregate amount of Revolving Commitments and the then-applicable Borrowing Base).

Both the ABL and our First Lien Term Loan Credit Agreement, dated as of November 17, 2023, by and among Xerox Corporation as borrower, Xerox Holdings Corporation, certain of Xerox Corporation's subsidiaries, as guarantors, with Jefferies Finance LLC as administrative agent and collateral agent, and the lenders party thereto, as amended (the TLB), are supported by guarantees from us and certain US, Canadian, English, German and Belgian subsidiaries, and by security interests in substantially all of our and such US, Canadian and English, German and Belgian subsidiaries’ assets, subject to certain exceptions.

The ABL, the TLB and the indentures governing our 13.00% Senior Notes due 2026, 5.50% Senior Notes due 2028, 8.88% Senior Notes due 2029, 13.00% Senior Notes due 2030, 10.25% Senior Notes due 2030, 3.75% Convertible

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Senior Notes due 2030, 13.50% Senior Notes due 2031, 4.80% Senior Notes due 2035, and 6.75% Senior Notes due 2039 and the Secured Promissory Note issued in favor of ITsavvy Holdings, LLC and maturing on January 30, 2026 (the 2026 ITsavvy Note) (collectively, the Notes) also impose operating and financial restrictions on us and may limit our ability to engage in acts that may be in our best interest, including restrictions on our ability to:

pay dividends, make other distributions in respect of, or repurchase or redeem capital stock;

incur additional indebtedness and guarantee indebtedness;

incur additional debt and guarantee debt;

prepay, redeem, or repurchase certain debt;

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or enter into joint ventures.

Failure to comply with material provisions or covenants in the ABL, the TLB, the 2029 Notes or our other debt agreements, including our secured financing agreements in connection with our securitization transactions and the indentures governing our outstanding notes, could have a material adverse effect on our liquidity, results of operations, and financial condition.

Failure to comply with material provisions or covenants in the ABL, the TLB, the Notes or our other debt agreements could have a material adverse effect on our liquidity, results of operations, and financial condition.

A default under certain of our debt agreements may allow our creditors to accelerate the applicable obligations and result in the acceleration of other obligations to which a cross-acceleration or cross-default provision applies.

In addition, an event of default under the ABL and the TLB would permit the lenders thereunder to terminate all commitments to extend credit.

Furthermore, if we were unable to repay the amounts due and payable under the ABL and the TLB, the lenders could proceed against the collateral granted to them to secure the obligations under the ABL and the TLB.

If any of our creditors accelerate the repayment of applicable indebtedness, we and our subsidiaries may not have sufficient assets to repay that indebtedness.

Our credit rating or macroeconomic conditions, including the credit market environment, could impact the terms and conditions associated with any new indebtedness available to us, and may result in higher borrowing costs and may contain covenants that would place greater restrictions on how we can run our businesses and/or limit our ability to take certain actions that might otherwise be beneficial to the Company and/or its shareholders, customers, suppliers, partners, and/or lenders.

In addition, an event of default under the ABL would permit the lenders thereunder to terminate all commitments to extend credit.

Furthermore, if we were unable to repay the amounts due and payable under the ABL, the TLB, the 10.25% Senior Notes due 2030, the 13.50% Senior Notes due 2031, or the 2026 ITsavvy Note, the lenders could proceed against the collateral granted to them to secure the obligations thereunder.

If any of our creditors accelerate the repayment of applicable debt, we and our subsidiaries may not have sufficient assets to repay that debt.

Our products and services may be affected by design and manufacturing defects that could materially adversely affect our business, financial condition, and results of operations.

Our products and services, or those of our OEM customers in which our products are installed, could be affected by design and manufacturing defects.

There can be no assurance we will be able to detect and fix all issues and defects in our products and services, and may have limited ability to respond to those impacting our OEM customers.

Failure to do so can result, and in the past has resulted in recalls, product replacements or modifications, and may cause reputational harm, and significant warranty and other expenses, which could have a material adverse impact on our business, financial condition and results of operations.

If our products malfunction or contain errors or defects, we could also be subject to significant liability for personal injury and property damage and, under certain circumstances, could be subject to a judgment for punitive damages.

We maintain insurance against accident-related risks involving our products.

However, there can be no assurance that such insurance would be sufficient to cover the cost of litigation or damages to others or that such insurance will continue to be available at commercially reasonable rates.

In addition, insurance coverage may not cover awards of punitive damages and may not cover the cost of associated legal fees and defense costs, which could result in lower margins.

If we are unable to maintain sufficient insurance to cover product liability costs or if our insurance coverage does not cover the award, this could have a material adverse impact on our business, financial condition and results of operations.

Our financial condition and results of operations could be adversely affected by employee benefit-related funding requirements.

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The current unfunded or underfunded status of these plans is a significant factor in determining the ongoing future contributions we will be required to make to these plans.

Accordingly, we expect to have additional funding requirements in future years, and we may make additional,

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voluntary contributions to the plans.

Accordingly, we expect to have additional funding requirements in future years, and we may make additional, voluntary contributions to the plans.

Depending on our cash position at the time, any such funding or contributions to our defined benefit plans could impact our operating flexibility and financial position, including adversely affecting our cash flow for the quarter in which such funding or contributions are made.

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In developing new technologies and products and maintaining our product portfolio, we rely upon patent, copyright, trademark, and trade secret laws in the United States and similar laws in other countries, and a combination of confidentiality, license, assignment and other agreements with our employees, customers, suppliers and other parties, to establish and maintain our intellectual property rights in technology and products used in our operations.

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However, various events outside of our control may pose a threat to our intellectual property rights, as well as to our products and services.

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Further, we routinely apply for patents to protect innovative ideas in our technology, but we may not always be successful in obtaining patent grants from these applications.

We also pursue registration of copyrights, trademarks, and domain names in numerous jurisdictions, but doing so may not always be successful or cost-effective.

Certain trademarks, including the "Xerox" brand, are critical to our competitive position, customer recognition, and the marketing of our products and services worldwide.

We pursue registration of copyrights, trademarks, and domain names in numerous jurisdictions, but doing so may not always be successful or cost-effective.

The scope and cost of maintaining and enforcing a global trademark portfolio this size and significance are substantial, and there can be no assurance that our efforts to register, maintain, and protect our trademarks will be effective in all jurisdictions.

The laws of certain countries may not protect our proprietary rights to the same extent as the laws of the United States and we may be unable to protect our proprietary technology adequately against unauthorized third-party copying or use, which could adversely affect our competitive position.

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If we fail to accurately anticipate and meet our customers' needs through the development of new products, technologies, and service offerings or if we fail to adequately protect our intellectual property rights, we could lose market share and customers to our competitors, which could materially adversely affect our results of operations and financial condition.

Failure to meet CSR expectations or standards or achieve our CSR goals could adversely affect our business, results of operations, financial condition, or stock price.

There has been a continued focus from regulators and stakeholders on corporate social responsibility (CSR) matters, including greenhouse gas emissions and climate-related risks;

responsible sourcing and supply chain;

human rights and social responsibility;

and corporate governance and oversight.

In the European Union, the Corporate Sustainability Reporting Directive (CSRD) expands the scope of companies required to publicly report CSR-related information and defines the CSR-related information that companies are required to report in accordance with European Sustainability Reporting Standards (ESRS).

Additionally, in October 2023, and subsequently in 2024, California enacted a series of laws requiring companies with revenues of over $1 billion who conduct business in California to disclose their Scope 1, 2 & 3 Greenhouse gas emissions and provide other relevant disclosures related to carbon offsets.

Other mandatory CSR-related disclosures include the Conflict Minerals Reporting in the U.S., Transparency in Supply Chain Act in California, the Modern Slavery Act in the UK

The Shared Services and License Agreement (the SSLA) entered pursuant to the joint venture arrangement with certain investors including certain funds and accounts managed by Angelo, Gordon & Co., L.P.

may be terminated by XRX Brandco LLC upon certain events of default, in which case the Company’s right to use the certain intellectual property, including the “Xerox” brand, would terminate, which could have a material adverse effect on our business.

Additionally, with trademark ownership residing in XRX Brandco LLC, our ability to independently enforce our trademark rights or sublicensing may be constrained by the terms of the SSLA, which could limit our flexibility in responding to competitive threats or pursuing business opportunities.

Refer to Note 26 – Subsequent Events in the Consolidated Financial Statements for more information about the joint venture arrangement.

Failure to meet evolving corporate social responsibility expectations, standards, or goals could adversely affect our business, results of operations, financial condition, or stock price.

There has been increased focus from regulators and stakeholders on corporate social responsibility (CSR) matters, including climate-related risks and greenhouse gas emissions, responsible sourcing and supply chain practices, human rights, and corporate governance.

CSR-related regulatory requirements continue to expand and evolve globally, including in the European Union under the Corporate Sustainability Reporting Directive (CSRD) and European Sustainability Reporting Standards (ESRS), in the United States at the federal and state level, and in other jurisdictions where we operate.

The scope, interpretation, timing, and implementation of these laws and regulations remain subject to uncertainty, evolving guidance, and potential legal challenges.

Differences among regulatory regimes may increase compliance complexity, require additional systems and controls, and limit comparability across jurisdictions.

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and Canada, and the Law on Child Labour Due Diligence in The Netherlands.

There are also a number of voluntary reporting schemes that provide a framework to report CSR-related information.

In 2021, Xerox voluntarily announced its 2040 net zero goal to meet growing expectations of companies to reduce GHG emissions.

Xerox recognizes these goals are subject to risks and uncertainties depending on global climate change, economic conditions, and other factors outside of our control.

Xerox also recognizes transitional risks associated with changes in voluntary standards and customer preferences in connection with concerns about climate change.

If Xerox is unable to offer products that are as energy efficient as our competitors, there is a risk of reduced demand for our products and reduced market share.

Inability, or a perception of inability, to achieve progress toward our environmental goals could adversely impact our business or damage our reputation.

Damage to our reputation may reduce demand for our products and services and thus have an adverse effect on our future financial results and our stock price, as well as require additional resources to rebuild our reputation.

Given our commitment to CSR, we actively engage external and internal stakeholders to manage these issues and have established and publicly announced certain goals, commitments, and targets which we may refine or even expand further in the future.

These goals, commitments, and targets reflect our current plans and aspirations and are not guarantees that we will be able to achieve them.

Evolving stakeholder expectations and our efforts and ability to manage these issues, provide updates on them, and accomplish our goals, commitments, and targets present numerous operational, regulatory, reputational, financial, legal, and other risks, any of which may be outside of our control or could have a material adverse impact on our business, including on our reputation and stock price.

Further, there is uncertainty around the accounting standards, corporate social responsibility, and climate-related disclosures associated with emerging laws and reporting requirements and the related costs to comply with the emerging regulations.

Our failure or perceived failure to achieve our CSR goals, maintain CSR practices, or comply with emerging CSR regulations that meet evolving regulatory or stakeholder expectations could harm our reputation, adversely impact our ability to attract and retain customers and talent, and expose us to increased scrutiny from the investment community and enforcement authorities.

Increased focus and activism on CSR topics may hinder our access to capital, as investors may reconsider their capital investment as a result of their assessment of our CSR practices.

Our reputation also may be harmed by the perceptions that our stakeholders have about our action or inaction with regards to CSR-related issues.

Damage to our reputation and loss of brand equity may cause customers to choose to stop purchasing our products and services, purchase products and services from another company or a competitor, or refuse to renew existing contracts, ultimately reducing demand for our products and services and thus have an adverse effect on our future financial results and stock price, as well as require additional resources to rebuild our reputation.

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particularly with respect to Scope 3 greenhouse gas emissions and supply-chain-related requirements, may require the use of estimates, assumptions, and third-party data that may be incomplete, inaccurate, or inconsistent, and may result in increased costs, operational burdens, or enforcement risk.

In addition, evolving climate-related regulations and market expectations may expose us to transition risks, including risks related to changes in laws and regulations, customer preferences, technology, and the availability and cost of energy and other inputs.

In 2021, Xerox voluntarily announced its 2040 net zero goal.

Achievement of this and other CSR-related goals depends on factors outside our control, including economic conditions, technological developments, regulatory changes, customer preferences, and actions by suppliers and partners.

Our strategies, targets, and timelines may evolve over time, and progress may vary from period to period.

If we are unable, or are perceived to be unable, to achieve progress toward our environmental goals, or if our products are not viewed as sufficiently energy efficient relative to those of competitors, demand for our products and services may decline, our market share may be reduced, and our reputation may be harmed.

CSR-related disclosures may expose us to increased litigation, regulatory, and enforcement risk, including claims alleging misstatements, omissions, or “greenwashing,” particularly where such disclosures rely on evolving standards, estimates, or third-party information.

Even voluntary disclosures may be subject to scrutiny or challenge by investors, regulators, and other stakeholders.

CSR-related initiatives and disclosures may also expose us to political and reputational risks.

In the United States, differing views regarding CSR, ESG, and climate-related matters may result in criticism, loss of business, boycotts, restrictions on public-sector contracting, or other adverse impacts, regardless of whether we increase, decrease, or maintain our current level of CSR-related activities or disclosures.

Failure, or perceived failure, to meet evolving CSR expectations or regulatory requirements may harm our reputation, adversely affect our ability to attract and retain customers and talent, increase scrutiny from investors and regulators, and limit access to capital.

Damage to our reputation or brand may reduce demand for our products and services, adversely affect our financial results and stock price, and require additional resources to address.

We provide certain CSR and sustainability-related information in this Annual Report on Form 10-K and in other voluntary disclosures that may not be considered material under U.S.

federal securities laws and may be based on frameworks, methodologies, and definitions of materiality that differ from those applicable to SEC filings.

These methodologies, metrics, assumptions, and boundaries may change over time and may differ from those used by other companies, which may limit the usefulness of such disclosures and period-to-period comparability.

Regulatory Risk Factors

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If our future revenues, costs, and results of operations are significantly affected by economic or political conditions abroad and we are unable to effectively hedge these risks, they could materially adversely affect our results of operations and financial condition.

Tariffs or other restrictions on foreign imports could negatively impact our financial performance.

Our business, results of operations and financial condition may be negatively impacted by a potential increase in the cost of our products as a result of new or incremental trade protection measures, such as increased import tariffs or import or export restrictions or the revocation or material modification of trade agreements.

Our business, results of operations and financial condition have and may continue to be negatively impacted by such tariffs and any potential increase in the cost of our supplies or end-products as a result of new or incremental trade protection measures, such as increased import tariffs or import or export restrictions or the revocation or material modification of trade agreements.

administration has considered and announced potential tariffs on imports from Canada, Mexico and China as well as other jurisdictions.

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Significant judgment is required to determine and estimate worldwide tax liabilities.

Our provision for income taxes and effective tax rates could be affected by numerous factors, including changes in applicable tax laws, interpretations of applicable tax laws, amount and composition of pre-tax income in jurisdictions with differing tax rates, and valuation of deferred tax assets.

Our provision for income taxes and effective tax rates could be affected by numerous factors, including changes in applicable tax laws, interpretations of applicable tax laws, the amount and composition of pre-tax income in jurisdictions with differing tax rates, and valuation of deferred tax assets.

We monitor U.S.

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We are subject to breaches of our security systems, cyber-attacks, and service interruptions, which could expose us to liability, litigation, regulatory action and damage our reputation.

We have implemented and maintain security measures and safeguards, which we believe to be reasonable, to protect our information systems and our confidential information, including personal information, and that of our customers, clients and suppliers that is held or processed by us, against unauthorized access or disclosure and to prevent, detect, contain, respond to, and mitigate security-related threats and potential incidents.

We undertake ongoing improvements to ensure the security of our systems, connected devices, and information-sharing products in order to minimize potential vulnerabilities, in accordance with industry and regulatory standards.

Despite such efforts, our safeguards may fail or we may be subject to breaches of our security resulting in unauthorized access to our facilities or information systems and the information we are trying to protect.

We have implemented and maintain security measures and safeguards, which we believe to be reasonable, to protect our information systems and our confidential and sensitive information that we hold, including the personal information of our employees, customers, clients, suppliers and other third parties, against unauthorized access or disclosure and to prevent, detect, contain, respond to, and mitigate security-related threats and potential incidents.

We regularly assess and seek to improve the security of our systems, connected devices, and information-sharing products in order to minimize potential vulnerabilities, in accordance with industry and regulatory standards.

Despite such efforts, we may be subject to breaches of our security resulting in unauthorized access to our facilities or information systems and the information contained therein or stored thereon.

Moreover, our business or operations may be affected in the event our customers, clients and suppliers experience data security incidents, cyber-attacks or extended interruptions of their services or systems.

Our operations depend on the use of various information systems, including those that may have reached their end-of-life, and may contain unpatched vulnerabilities.

Unpatched vulnerabilities in our systems and the utilization of end-of-life systems may expose us to increased cybersecurity risks, including unauthorized access, data breaches, and operational disruptions.

Our operations depend on the use of various information systems, including legacy systems for which patches may not be readily available.

Unpatched vulnerabilities in our systems and the utilization of end-of-life systems may expose us to increased cybersecurity risks, including

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absence of vendor support for end-of-life systems may impede our ability to promptly address and remediate security issues, potentially leading to extended downtime, data breaches, and financial losses.

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unauthorized access, data breaches, and operational disruptions.

The absence of vendor support for end-of-life systems may impede our ability to promptly address and remediate security issues, potentially leading to extended downtime, data breaches, and financial losses.

Moreover, we may be required to dedicate new or additional resources to maintain the secure operation of legacy systems and/or to respond to vulnerabilities in such systems, which may impact our operations and financial condition.

Additionally, the third-party software, or applications we utilize may possess inherent vulnerabilities or design, manufacturing, or operational defects when implemented intentionally or unintentionally in a manner that could compromise the security of our information systems.

Increased adoption of remote work has also increased possible attack surfaces on our information systems.

The techniques used to obtain unauthorized access are constantly changing, are becoming increasingly sophisticated and often are not recognized until after an exploitation of information has occurred.

Therefore, we may be unable to anticipate these techniques or implement sufficient preventative measures, or to timely detect and remediate harms caused by such techniques.

The techniques used to obtain unauthorized access are constantly changing, are becoming increasingly sophisticated, including as a result of AI tools, and often are not recognized until after a threat actor has successfully used them to gain unauthorized access to a system.

We may be unable to anticipate these techniques or implement sufficient preventative measures, or to timely detect and remediate harms caused by such techniques.

Threat actors regularly attempt and, from time to time, have been successful in breaching our security controls, to gain access to our information and infrastructure through various techniques, including phishing, ransomware, account compromise, and other targeted attacks.

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We may also find it necessary to make significant further investments to protect this information and our infrastructure.

These investments, and costs we incur in connection with security incidents, could be material.

While we do not believe any cybersecurity incidents to date have resulted in any material impact on our business, operations or financial results or our ability to service our customers or run our business, incidents resulting in unauthorized access to our facilities or information systems, or those of our suppliers, or accidental loss or disclosure of proprietary or confidential information about us, our clients or our customers could result in, among other things, a total shutdown of our systems that would disrupt our ability to conduct business or pay vendors and employees, violations of applicable privacy and other data protection laws, significant legal and financial exposure, damage to our reputation, and a loss of investor confidence in our security measures.

These investments, and any costs we incur in connection with security incidents, could be material.

While we do not believe any cybersecurity incidents to date have resulted in any material impact on our business, operations or financial results or our ability to service our customers or run our business, incidents resulting in unauthorized access to our facilities or information systems, or those of our suppliers, or accidental loss or disclosure of proprietary or confidential information about us, our clients or our customers could result in, among other things, a total shutdown of our systems that would disrupt our ability to conduct business or pay vendors and employees, violations of applicable privacy and other data protection laws, significant legal and financial exposure, damage to our reputation or brand, and a loss of investor confidence in our security measures.

Additional impacts from cybersecurity incidents could include remediation costs to our customers or business partners, such as liability for stolen assets or information, repairs of system damage, and incentives for continued business;

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We are subject to laws of the United States and foreign jurisdictions relating to the privacy and protection of personal information, and failure to comply with those laws could subject us to legal actions and negatively impact our operations.

We receive, process, transmit and store information relating to identifiable individuals, both in our role as a technology provider and as an employer.

As a result, we are subject to numerous privacy and data protection laws and regulations in the United States (both federal and state) and foreign jurisdictions.

The global regulatory landscape regarding the protection of personal information is evolving and increasingly complex, and U.S.

(federal and state) and foreign governments have enacted, and are considering further enacting, legislation and regulations related to privacy and data protection.

We expect to see an increase in, or changes to, the data protection and privacy laws, regulations and standards.

For example, the California Consumer Privacy Act of 20-18 (CCPA), regulates businesses’ processing of personal information, which is defined broadly enough to include online identifiers provided by individuals’ devices, applications, and protocols (such as IP addresses, mobile application identifiers and unique cookie identifiers) and individuals’ location data.

The CCPA, which went into effect on January 1, 2020, instituted a new privacy framework in the U.S.

for covered businesses by, among other requirements, establishing certain rights for consumers in California to protect their personal information (including rights of deletion of and access to personal information), imposing special rules on the collection of consumer data from minors, creating new notice obligations and new limits on the “sale” of personal information, and creating a new and potentially severe statutory damages framework for violations of the CCPA and for businesses that fail to implement reasonable security procedures and practices to prevent data breaches.

The CCPA also offers the possibility for a consumer to recover statutory damages for certain violations and could expose our company to additional risks of individual and class-action lawsuits even though the statute’s private right of action is limited in

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The California Privacy Rights Act of 2020 (CPRA), which took effect on January 1, 2023, amended and expanded upon the CCPA to impose additional notice, access, objection, limitation of use, nondiscrimination, and other obligations and restrictions with regards to the processing of sensitive data and the disclosure (or “sharing”) of data to third parties, which does not constitute a “sale”.

We receive, process, transmit and store information relating to identifiable individuals in connection with our products, services and employment operations.

As a result, we are subject to numerous and evolving privacy and data protection laws and regulations in the United States (both federal and state) and foreign jurisdictions.

The global regulatory landscape regarding the protection of personal information continues to expand and become increasingly more complex.

Federal and state governments in the U.S., as well as foreign governments, have enacted, and continue to consider, enacting new legislation and regulations related to the collection, use, disclosure and security of personal information.

We expect to see an increase in, or changes to, these data protection and privacy laws, regulations and standards.

For example, the California Consumer Privacy Act of 2018, as amended by the California Privacy Rights Act of 2020 (collectively, CCPA), grants California residents extensive rights over their personal information and imposes detailed requirements on businesses, including related to notice, access, deletion, limits on certain data uses and disclosures, and limitations on the use of sensitive data.

Several other U.S.

states have also enacted, and more are considering enacting, their own data privacy laws.

These laws generally grant individuals a range of new privacy rights and protections relating to their personal data, and impose obligations on businesses processing such data.

The lack of harmonization among the existing and proposed laws and regulations may create additional compliance costs for us and our industry partners, though efforts taken toward compliance with other privacy laws will likely be applicable to many elements of the newly enacted state statutes.

states have also enacted, and more are considering enacting, similar laws.

These laws also create new enforcement mechanisms and the potential for statutory damages in the event of certain violations or data breaches.

The lack of harmonization among the existing and proposed laws and regulations results in a growing and often inconsistent regulatory patchwork that may increase compliance costs and operational

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complexity for us and our industry partners, though efforts taken toward compliance with other privacy laws will likely be applicable to many elements of the newly enacted laws and regulations.

Although we have attempted to mitigate certain risks posed by these laws, we cannot predict with certainty which jurisdictions may enact new laws, or the effect of these laws and their implementing regulations on our business.

Laws governing personal data in Europe may have a similar effect on our Company.

For example, the General Data Protection Regulation (GDPR) enhances data protection obligations for controllers of such data and for service providers processing the personal data of individuals in the European Economic Area.

It also provides certain rights, such as access and deletion, to the individuals about whom the personal data relates.

Non-compliance with the GDPR can trigger steep fines of up to the greater of EUR 20 million or 4% of total worldwide annual revenue.

Continuing to maintain compliance with the requirements of the GDPR and other similar foreign laws, including monitoring and adjusting to rulings and interpretations by supervisory authorities and/or courts of competent jurisdiction, may affect our approach to compliance and requires significant ongoing time, resources and expense, as will the effort to monitor whether additional changes to our business practices and our backend configuration are needed, all of which may increase operating costs, or limit our ability to operate or expand our business.

Furthermore, we are also subject to similar laws related to data protection in other jurisdictions, such as the Personal Information Protection and Electronic Documents Act (PIPEDA) in Canada, and the General Data Protection Law (LGDP) in Brazil.

These laws and other obligations may be interpreted and applied in a manner that is inconsistent across jurisdictions, or which do not align with our existing data management practices or features of our systems and services.

If so, we could be required to fundamentally change our business activities and practices or modify our products, which could have an adverse effect on our business.

We may be unable to make such changes and modifications in a commercially reasonable manner or at all, and our ability to develop new products and features could be limited.

Changes to existing laws, introduction of new laws in this area, failure to comply with existing laws that are applicable to us, or an increase in enforcement activity by governments or private parties may subject us to, among other things, additional costs or changes to our business practices, liability for monetary damages, fines and/or criminal prosecution, unfavorable publicity or other reputational harm, restrictions on our ability to obtain and process information and allegations by our customers and clients that we have not performed our contractual obligations, any of which may have a material adverse effect on our profitability and cash flow.

The use or anticipated use of artificial intelligence (AI) technologies, including generative AI, by us or third parties, may increase or create new regulatory or operational risks.

Outside the U.S., data privacy and protection laws governing personal data may have a similar effect on our Company.

For example, the European Union’s General Data Protection Regulation (GDPR) and similar foreign laws, such as the GDPR as assimilated into United Kingdom law (UK GDPR), Personal Information Protection and Electronic Documents Act (PIPEDA) in Canada, and the General Data Protection Law (LGDP) in Brazil, impose strict requirements on the processing and transfer of personal data and authorize significant penalties for non-compliance.

Maintaining compliance with the GDPR and other foreign privacy laws requires that we monitor regulatory and judicial developments and may necessitate changes to our compliance approach, business practices or system configurations.

These efforts may demand significant time, resources and expense and may increase our operating costs or limit our ability to operate or expand our business.

Because these laws may be interpreted or applied inconsistently across jurisdictions, or may not align with our existing data management practices or features of our systems and services, we could be required to modify our products or fundamentally change aspects of our operations, which could have an adverse effect on our business.

We may be unable to implement such changes in a commercially reasonable manner, or at all, which could limit our ability to develop new products and features.

Changes in applicable laws, the introduction of new laws, failure to comply, or increased regulatory or privacy enforcement could result in additional costs, operational changes, monetary damages, fines, reputational harm, restrictions on our ability to process data, or allegations of nonperformance under customer contracts, any of which could materially adversely effect on our profitability and cash flow.

The use or anticipated use of technologies, including generative AI, by us or third parties, may increase or create new regulatory or operational risks.

AI technologies offer numerous potential benefits, such as creating or increasing operational efficiencies, and we expect the use of AI and generative AI by us, third parties on our behalf, and other market actors, including our competitors, to increase.

However, the deployment of such technologies also poses certain risks, including that they may be misused, or the models or datasets on which the models are trained may be flawed or otherwise may function in an unexpected manner or lead to unexpected or unintended outcomes.

The relative newness of the technology, the speed at which it is being adopted, and the paucity of laws, regulations or standards expressly and specifically governing its use increases these risks.

The speed at which it is being adopted and the uncertainty regarding the scope and details of laws, regulations or standards governing its use, combined with the growing interest by various legislatures and regulators to address the development and deployment of AI technologies in a manner which may not be consistent across jurisdictions, increases these risks.

Any such misuse or any deficiencies in, or failure of, the models or AI systems could expose us to legal or regulatory risk, damage customer relationships or cause reputational harm.

Our competitors may also adopt AI or generative AI more quickly or more effectively than we do, which could cause competitive harm.

We are subject to numerous environmental laws, regulations, and procurement initiatives and failure to comply could result in substantial costs, including cleanup costs, fines, civil or criminal sanctions, third-party damage or personal injury claims, or limited market access.

Continuing political and social attention to the issue of climate change has led to existing and proposed international agreements, as well as national, state, local, and foreign legislative, regulatory, and procurement initiatives directed at requiring companies to disclose and limit greenhouse gas emissions in the countries, states, and territories in which we operate.

Laws, regulatory actions, international agreements, such as the Paris Agreement, and other

We are subject to extensive environmental laws, regulations, and procurement requirements, and failure to comply could result in increased costs, liabilities, or loss of market access.

Our operations and products are subject to a broad and evolving range of international, federal, state, local, and foreign environmental laws, regulations, and procurement initiatives.

These requirements address, among other things, climate change and greenhouse gas emissions, chemical usage, product design and energy efficiency, waste management, and product end-of-life responsibilities.

Failure to comply with applicable requirements could result in substantial costs, including remediation expenses, fines, civil or criminal penalties, third-party claims, or limitations on our ability to sell products in certain markets.

Increased political and regulatory focus on climate change has led to existing and proposed international agreements and national, state, and foreign initiatives requiring companies to disclose and, in some cases, limit greenhouse gas emissions.

Compliance with climate-related laws and regulations, including evolving disclosure, reporting, and procurement requirements, may increase our costs, impose operational constraints, limit product availability, or increase our compliance burden.

The ultimate impact of these requirements remains uncertain and may depend on future regulatory developments and interpretations.

Our products and operations are also subject to chemical and materials regulations across the jurisdictions in which we operate, including restrictions on the types and amounts of substances that may be used in electronic equipment and supplies.

For example, we are subject to the EU Registration, Evaluation, Authorization and Restriction of Chemicals (REACH) regulation and the U.S.

Toxic Substances Control Act (TSCA), among other similar regimes.

These and comparable programs require significant data collection, supply-chain coordination, testing, and

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initiatives to address concerns about climate change and greenhouse gas emissions could negatively impact our business, results of operations, and financial condition, including, among other things, by limiting the availability of our products, increasing the cost to obtain or sell those products, and increasing our reporting burden and cost of compliance.

Though the ultimate impact of these and similar initiatives is not yet fully known, compliance with such proposed or newly adopted disclosure initiatives may incur significant costs.

Our operations and our products are subject to environmental regulations in each of the jurisdictions in which we conduct our business and sell our products.

Restrictions on the types and amounts of chemicals that may be present in electronic equipment or other items that we use or sell continue to proliferate, requiring substantial data gathering, analysis, and reporting throughout the supply chain.

Ongoing research and review of chemicals used in our products could lead to further restriction of common chemicals in office equipment and supplies.

In the European Union (EU), for example, we are subject to “REACH” Regulation (Registration, Evaluation, Authorization and Restriction of Chemicals), a broad initiative that requires parties throughout the supply chain to register, assess, and disclose information regarding many chemicals in their products.

Depending on the types, applications, forms, and uses of chemical substances in various products, REACH and similar regulatory programs in the EU and other jurisdictions could lead to restrictions and/or bans on certain chemical usage.

In the United States, the Toxics Substances Control Act (TSCA) authorizes the U.S.

Environmental Protection Agency to regulate and screen all chemicals produced or imported into the United States.

Xerox continues its efforts toward monitoring and evaluating the applicability of these and numerous other legislative initiatives in a continuous effort to develop and enable compliance strategies.

As these and similar initiatives and programs become regulatory requirements throughout the world and/or are adopted as public or private procurement requirements, we must comply.

Failure to comply could result in the company being subject to potential liability and facing market access limitations that could have a material adverse effect on our operations and financial condition.

Other potentially relevant regulatory initiatives throughout the world include various efforts to limit energy use in product manufacturing and other environment-related programs impacting products and operations, such as those associated with climate change accords, agreements, and regulations.

For example, the EU Ecodesign for Sustainable Products Regulation (ESPR) requires specified classes of products to achieve certain design and/or performance standards in connection with energy use and other environmental parameters and impacts.

The EU ESPR is part of the EU Circular Economy Action Plan (CEAP), which introduced legislative and non-legislative measures focusing on how products are designed, promoting circular economy processes, encouraging sustainable consumption, and ensuring waste is prevented.

The implementation of the CEAP is expected to impact how companies prove environmental claims and the materials used, including chemicals and plastics, in products that are placed on the EU market.

Environmentally driven procurement requirements also voluntarily adopted by customers in the marketplace (e.g., U.S.

EPA EnergyStar, EPEAT, and EU Green Public Procurement) are constantly evolving and becoming more stringent, presenting further market access challenges if our products fail to conform.

Various countries and jurisdictions have adopted, or are expected to adopt, requirements clarifying manufacturer roles and responsibilities related to the recovery of products that were placed on the market and remediation of by-products of the manufacturing process.

For example, jurisdictions have adopted or are expected to adopt, programs that make producers of certain goods (e.g., electrical goods, including computers and printers) and/or packaging materials responsible for related reporting, fees, and end-of-life management of the products.

If we are unable to meet such “extended producer responsibility” (EPR) requirements in a cost-effective manner, it could materially adversely affect our results of operations and financial condition.

Further, Xerox is party to, or otherwise involved in, proceedings in a limited number of locations brought by governmental authorities and other third parties under the federal Comprehensive Environmental Response, Compensation and Liability Act (CERCLA), known as "Superfund," or state law equivalents, in which the primary relief sought is the cost of past and/or future remediation of contamination related to such sites, including impacts attributable to third parties, as well as at third-party sites to which we sent wastes.

The nature of financial exposure depends on a variety of factors, including changes in laws, known contamination, and discovered contamination that was previously unknown.

Regulatory requirements related to sustainability reporting have been adopted in the EU that, due to our revenues and employee headcounts in the EU, apply or may apply to us when effective, including the EU Corporate Sustainability Reporting Directive (CSRD), EU Taxonomy, and the EU Corporate Sustainability Due Diligence Directive (CSDDD).

The EU’s CSRD introduces new compliance requirements that may impact our operations and financial reporting.

The CSRD mandates detailed reporting on environmental, social, and governance factors, and requires an audit (assurance) of the reported information.

Potential risks include increased compliance costs, operational challenges in data collection, reputational risk, and market access impacts.

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reporting, and may result in restrictions or bans on certain substances, increased costs, or product redesign requirements.

We are further subject to regulations and customer procurement requirements relating to product energy efficiency, environmental performance, and circular economy objectives, including EU product design and sustainability initiatives and voluntary or mandatory procurement standards such as Energy Star, EPEAT, and EU Green Public Procurement.

These requirements are subject to change and may become more stringent over time, which could limit market access or require additional investment if our products do not meet applicable criteria.

Various jurisdictions have adopted, or are expected to adopt, extended producer responsibility (EPR) and similar regimes that impose obligations relating to product and packaging take-back, recycling, reporting, fees, and waste management.

If we are unable to meet these requirements in a cost-effective manner, our results of operations and financial condition could be adversely affected.

In addition, we are involved in a limited number of environmental proceedings under federal, state, and foreign laws, including matters under the Comprehensive Environmental Response, Compensation and Liability Act (CERCLA) and similar statutes, relating to remediation of contamination at certain sites.

Our potential liability in such matters depends on numerous factors, including changes in law, the nature and extent of contamination, and the involvement of third parties.

Regulatory requirements relating to environmental compliance and reporting have also been adopted or expanded in certain jurisdictions, including in the European Union.

Compliance with these requirements may increase costs, require additional systems and controls, and expose us to operational, financial, or reputational risk.

Risks Related to our Acquisition of Lexmark

We may be unable to realize the benefits from the Lexmark Acquisition

In July 2025, we completed the acquisition of Lexmark.

The combination of independent businesses is a complex, costly, and time-consuming process that requires significant management attention and resources.

The integration process may disrupt the affected businesses and, if implemented ineffectively, could limit the expected benefits thereof.

The failure to meet the challenges involved in integrating such businesses and to realize the anticipated benefits could cause an interruption of, or loss of momentum in, the activities of the combined company and could adversely affect the results of operations of the combined Company.

Although we expect to realize significant cost-savings and synergies in connection with the Lexmark Acquisition and we also expect to realize significant incremental revenues and other benefits resulting from, among other things, consolidation of our and Lexmark’s businesses, including various functions and systems, no assurance can be given that these anticipated benefits will be realized in whole or in part or on a timeframe that is consistent with our expectations.

Although we believe these benefits are achievable, our ability to achieve them in the amounts and on the timeframe expected is subject to various assumptions by our management based on expectations that are subject to costs that could offset all or a portion of such synergies.

Failure to timely realize the expected cost-savings from the Lexmark Acquisition could have an adverse effect on our financial results and prospects.

Moreover, our ability to realize the anticipated benefits of the Lexmark Acquisition, including anticipated synergies, will depend, to a large extent, on our ability to integrate Lexmark’s business into our existing operations.

Although certain of Lexmark’s operations overlap with our historical operations, Lexmark’s business involves certain activities in which we were not engaged immediately prior to the Lexmark Acquisition, such as print hardware manufacturing.

We are exposed to operational, competitive, contractual, regulatory, and other risks associated with Lexmark’s manufacturing activities.

Moreover, Lexmark has significant operations in Asia and other geographies where we currently do not have a significant presence.

Any failure in our ability to transition to new geographies or to realize the anticipated benefits of Lexmark’s customer relationships could harm our brand, prospects, operating results, and financial condition, and could have an adverse effect on our business.

By virtue of our expansion into new geographies, we will be subject to new political, economic, legal, operational, regulatory and other risks that are inherent in operating in a foreign country, including risks of possible price controls, capital controls, exchange controls, inflation controls, licensing requirements, and other restrictive governmental actions.

Additionally, as of December 31, 2025, approximately 8% of Lexmark’s permanent employees, who were employed in France, Argentina, Spain, Italy, Portugal, Sweden, Finland, Austria and Brazil were covered by collective bargaining agreements, which are generally national or industry-wide agreements.

As of December 31, 2025, Lexmark was in the process of registering a labor union for approximately 30 employees located in Shenzhen, China.

If we encounter difficulties with renegotiations or renewals of collective bargaining agreements or are

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Risks Related to our Pending Acquisition of Lexmark

The Lexmark acquisition may not be completed and the equity purchase agreement may be terminated in accordance with its terms.

The closing of our acquisition of Lexmark remains subject to the satisfaction or waiver of certain closing conditions, including regulatory approvals and the approval of the shareholders of Ninestar Corporation, a shareholder of the seller.

These conditions to the completion of the transaction, some of which are beyond the control of us and/or Lexmark, may not be satisfied or waived in a timely manner or at all;

accordingly, the Lexmark acquisition may be delayed or not completed.

Additionally, either we or Lexmark may terminate the equity purchase agreement under certain circumstances, subject to the payment of a “termination fee” in certain cases, including if the acquisition does not occur as a result of the failure to obtain the consent of the shareholders of Ninestar Corporation.

In such circumstances, and subject to certain other conditions, Lexmark is required to reimburse us (in the case of failure to obtain consent from the shareholders of Ninestar Corporation), and we are required to reimburse Lexmark (in the case of our failure to obtain certain regulatory approvals) for up to $30 million of documented out-of-pocket expenses.

The Lexmark acquisition may present certain risks to our business and operations prior to the closing and, if consummated, after the closing.

• Our business and operations are subject to various risks related to the Lexmark acquisition prior to closing, including:

• our operations may be restricted by the terms of the equity purchase agreement, which may cause us to forgo otherwise beneficial business opportunities;

• the proposed transaction may disrupt our current business plans and operations;

• our management’s attention may be directed toward the completion of the Lexmark acquisition and diverted away from our day-to-day business operations;

• legal proceedings may be instituted against us, Lexmark or others following announcement of the proposed transaction;

• we may incur significantly higher transaction costs than we currently anticipate, such as legal, financing and accounting fees, and other costs, fees, expenses and charges related to the Lexmark acquisition, whether or not the transaction is completed;

• the Lexmark acquisition may not be completed, which may have an adverse effect on our stock price and future business and financial results.

In addition, in the event the Lexmark acquisition is consummated, certain risks may continue to exist after the closing of the Lexmark acquisition, including, among other things, risks that:

• the future results of the combined company will suffer if the combined company does not effectively manage its operations following the closing of the transaction;

• the parties may fail to successfully combine the businesses in a manner that permits the combined company to realize the benefits of the proposed transaction, including operational and financial opportunities and cost synergies;

• Lexmark’s liabilities and/or contractual or other obligations could be greater than expected;

• we may not be able to successfully integrate Lexmark’s business with our business on a timely basis.

We will incur a substantial amount of indebtedness in connection with the financing of the Lexmark Acquisition.

We expect to finance the Lexmark Acquisition by incurring third-party indebtedness and issuing notes.

We face risks associated with increases in overall indebtedness.

We cannot guarantee that the combined business will be able to generate sufficient cash flow to service and repay this indebtedness, or that we will be able to refinance such indebtedness on favorable terms, or at all.

If we are unable to service our indebtedness and fund our operations, we may be forced to, among other things, reduce or delay capital expenditures, seek additional capital, sell assets, or refinance our indebtedness.

Any such action may not be successful, and we may be unable to service such indebtedness.

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unsuccessful in those efforts, we could incur additional costs and experience work stoppages.

Union actions at suppliers also can affect us.

Any delays or work stoppages could adversely affect the ability to perform under contracts, which could negatively impact our results of operations, cash flows and financial condition.

In addition, the integration may result in material unanticipated problems, expenses, liabilities, competitive responses, loss of customer and other business relationships, and diversion of management’s attention.

The difficulties of combining the operations of the companies include, among others:

• the diversion of management’s attention to integration matters;

• difficulties in achieving anticipated cost savings, synergies, business opportunities and growth prospects from the combination;

• difficulties in integration of operations and systems;

• conforming standards, controls, procedures, and accounting and other policies as well as corporate cultures and compensation structures;

• potential unknown liabilities, adverse consequences, and unforeseen expenses;

• challenges in attracting and retaining key personnel.

Many of these factors will be outside of our control and any one of these factors could result in increased costs, decreases in the amount of expected revenues, and additional diversion of management’s time and energy, which could materially adversely impact the business, financial condition and results of operations of the combined company.

In addition, even if the businesses are integrated successfully, the full benefits thereof, including expected synergies, cost savings, and revenue growth may not be realized.

The benefits may not be realized or achieved within the anticipated time frame, or at all.

Further, additional unanticipated costs may be incurred in connection with the integration of the businesses.

All of these factors could decrease or delay the expected accretive effect of any acquisition, including the Lexmark Acquisition, and negatively impact the combined company’s business, operating results and financial condition.

As a result, we cannot provide any assurance that our acquisitions, including the Lexmark Acquisition will result in the realization of the expected benefits thereof.

The amounts of anticipated cost savings and anticipated expenses related thereto are forward-looking statements within the meaning of applicable securities laws, and are based on our current estimates, but they involve risks, uncertainties, assumptions and other factors that may cause actual results, performance or achievements to be materially different from those described herein.

Assumptions relating to the plans and amounts related thereto involve subjective decisions and judgments with respect to, among other things, the estimated impact of certain operational adjustments, including marketing efficiency, labor management, material input cost fluctuations, transition costs and other cost and savings adjustments, as well as future economic, competitive, industry and market conditions and future business decisions, all of which are inherently uncertain and may be beyond the control of our management.

Although our management believes these estimates and assumptions to be reasonable, any of the assumptions could be inaccurate, and there can be no assurance that the estimates described herein will prove to be accurate or that the objectives and plans expressed will be achieved.

Neither our independent auditor nor any other independent accountant, has examined, compiled or performed any procedures with respect to these amounts, nor have they expressed any opinion, or any other form of assurance, on such information or their achievability.

Accordingly, there can be no assurance that the anticipated cost savings, incremental revenues and other benefits will be realized or that the impact of the efforts to achieve such cost savings, incremental revenues will not be significantly different than currently anticipated.

We undertake no obligation to update or otherwise revise or reconcile our expectations regarding its cost savings efforts whether as a result of new information, future events or otherwise.

We incurred a substantial amount of debt in connection with the financing of the Lexmark Acquisition.

The Lexmark Acquisition was financed with a combination of cash on hand and debt, which resulted in an increase in our overall debt.

We are required to maintain sufficient liquidity (cash on hand, cash generated by operations and access to the ABL) and/or have access to capital to service and repay such debt when due.

If liquidity is not sufficient to service our debt we may be forced to, among other things, reduce or delay capital expenditures, seek additional capital, sell assets, or refinance our debt.

Any such action may not be successful, and we may be unable to service such debt.

Any of the above risks could have a material adverse effect on our business, financial condition, results of operation, cash flows and/or stock price.

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Risks Related to Ownership of our Common Stock and our Warrants

The trading price for the Warrants may bear little or no relationship to traditional valuation methods, or to the market price of our Common Stock, and therefore the trading price of the Warrants may fluctuate significantly following their issuance.

The trading price of the Warrants may have little or no relationship to, and may be significantly lower, or at times higher, than the price that would otherwise be established using traditional indicators of value, such as our future prospects and those of our industry in general;

future potential revenues, earnings, cash flows, and other financial and operating information, or multiples thereof;

market prices of securities and other financial and operating information of companies similar to ours;

and the views of research analysts.

Potential investors should not buy Warrants in the open market unless they are willing to take the risk that the trading price of the Warrants could fluctuate and decline significantly.

Hedging arrangements relating to the Warrants may affect the value and volatility of our Common Stock.

In order to hedge their financial positions, a warrant holders may enter into hedging transactions with respect to our Common Stock, may unwind or adjust hedging transactions and may purchase or sell large blocks of our Common Stock in one or more market transactions.

The effect, if any, of these activities on the trading price of our Common Stock will depend in part on market conditions and cannot be known in advance, but any of these activities could adversely affect the value and price volatility of our Common Stock.

The issuance of Common Stock upon the exercise of the Warrants may depress our stock price.

We could issue up to 82,463,860 shares of Common Stock in connection with the exercise of the Warrants, which would collectively be an approximately 64% increase from our current number of shares of Common Stock outstanding.

The issuance of such additional shares of Common Stock and the resale of such shares on the open market after their issuance, or the perception that such sales could occur, could result in significant downward pressure on the price of our shares of Common Stock.

Further, any increase in the number of shares underlying each Warrant may result in further downward pressure on the price of our shares of Common Stock.

Future issuances of additional warrants may adversely affect the market price of the Warrants and the market price of our Common Stock, but there may be no adjustment to the Warrant Exercise Rate for such issuances.

Without the consent of any Warrant holder, we may issue additional warrants with the same or different terms as the Warrants.

We may issue such additional warrants through a sale or other distribution to holders of our Common Stock and other holders of our securities.

Any issuance, sale or distribution by us of any rights, options or warrants to purchase our Common Stock will not result in an adjustment to the Warrant Exercise Rate for any Warrant.

The issuance, sale or distribution of substantial amounts of such additional warrants, or the perception that such issuances, sales or distributions may occur, could adversely affect the trading price of the Warrants and the market price of our Common Stock.

The market price for our Common Stock may be volatile and subject to future declines, and the value of an investment in our Common Stock and corresponding derivative securities may decline.

The market price of our shares of Common Stock may be volatile.

Fluctuations in our stock price may be unrelated to or not otherwise reflect our historical financial performance and condition and prospects.

The stock market in general can experience considerable price and volume fluctuations due to changes in general economic conditions or other factors beyond our control, which could impact the future market price of our shares of Common Stock.

These broad market fluctuations may adversely affect the market price of our Common Stock and, in turn, the value of the Warrants.

We cannot assure you that the market price of our shares of Common Stock will not be volatile or decline significantly in the future.

General Risk Factors

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We have various contingent liabilities that are not reflected on our balance sheet, including those arising as a result of being involved in a variety of claims, lawsuits, investigations, and proceedings including as discussed in Note 20 - Contingencies and Litigation in the Consolidated Financial Statements.

Should developments in any of these matters cause a change in our determination as to an unfavorable outcome and result in the need to recognize a material accrual or materially increase an existing accrual, or should any of these matters result in a final adverse judgment or be settled for significant amounts above any existing accruals, it could have a material adverse effect on our results of operations, cash flows and financial position in the period or periods in which such change in determination, judgment or settlement occurs.

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on our results of operations, cash flows and financial position in the period or periods in which such change in determination, judgment or settlement occurs.

Due to the international scope of our operations, we are subject to a complex system of commercial and trade regulations around the world.

With respect to the war in Ukraine, in the first quarter 2022, we halted shipments to Russia and Belarus when sanctions were imposed, and we completed the sale of all Russian operations in 2023.

With respect to the war in Ukraine, in 2022, we halted shipments to Russia and Belarus when sanctions were imposed, and we completed the sale of all Russian operations in 2023.

Recent years have seen an increase in the development and enforcement of laws regarding trade compliance and anti-corruption, such as the U.S.

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If we cannot provide reliable financial reports or prevent material fraud, our reputation and operating results would be harmed.

We maintained effective internal control over financial reporting as of December 31, 2024, as further described in Part II “Item 9A—Controls and Procedures.” Our efforts to develop and maintain our internal controls and to remediate any material weaknesses in our controls may not be successful, and we may be unable to maintain adequate controls over our financial processes and reporting in the future, including future compliance with the obligations under Section 404 of the Sarbanes-Oxley Act of 2002.

We maintained effective internal control over financial reporting (ICFR) as of December 31, 2025, as further described in Part II “Item 9A - Controls and Procedures.” Our efforts to develop and maintain our internal controls and, if applicable, to remediate any material weaknesses in our controls may not be successful, and we may be unable to maintain adequate controls over our financial processes and reporting in the future, including future compliance with the obligations under Section 404 of the Sarbanes-Oxley Act of 2002.

Any failure to develop or maintain effective controls, or difficulties encountered in their implementation, including those related to acquired businesses, or other effective improvement of our internal controls could harm our operating results, including those related to acquired businesses or reliance on third-party service providers for the execution of key financial, operational, and compliance controls could harm our operating results.

Ineffective internal controls could also cause investors to lose confidence in our reported financial information.

In connection with the preparation of this Annual Report on Form 10-K, an error in the preliminary purchase price allocation related to the Lexmark Acquisition was identified, including the classification of certain acquired assets and liabilities assumed.

The error reflected information and analysis associated with facts and circumstances that existed as of the acquisition date and resulted in an adjustment to previously reported amounts.

We corrected the error in our Consolidated Financial Statements, as discussed further in Note 6 – Acquisitions and Divestitures in the Consolidated Financial Statements.

As disclosed in Part II, Item 9A – Controls and Procedures – Management’s Report on Internal Control over Financial Reporting (ICFR), the management of Xerox Holdings Corporation elected to exclude Lexmark from its ICFR assessment as of December 31, 2025, as Lexmark was acquired by the Company during the third quarter of 2025.

As it relates to this error, management evaluated the error, the design, and the operating effectiveness of the related controls, and concluded that the error was limited to the accounting for contract assets and contract liabilities, specifically related to the implementation of and transition to a new general ledger prior to the acquisition.

Accordingly, management concluded that its ICFR remained effective as of December 31, 2025, and that the error did not result from a material weakness.

In reaching this conclusion, management considered the nature of the error, the controls in place over business combination accounting, and the fact that the error was identified through the operation of those controls.

If additional information becomes available during the measurement period, which concludes on June 30, 2026, or if similar errors are identified in future acquisitions or complex transactions, the Company may be required to record further adjustments or revise previously issued financial information.

Any such adjustments, revisions, regulatory inquiries, or investor concerns could adversely affect our reputation, increase our compliance costs, and have a negative impact on the market price of our common stock.

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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