This Annual Report on Form 10-K contains certain statements that are, or may be deemed to be, “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, or “Exchange Act,” and are made in reliance upon the protections provided by such acts for forward-looking statements. Such statements are not based on historical fact but are based upon numerous assumptions about future conditions that may not occur. Forward-looking statements are generally identifiable by use of forward-looking words such as “may,” “should,” “would,” “intend,” “estimate,” “will,” “potential,” “possible,” “could,” “believe,” “expect,” “intend,” “plan,” “anticipate,” “project,” and similar expressions. Readers are cautioned not to place undue reliance on any forward-looking statements made by us or on our behalf. Forward-looking statements are made based upon information that is currently available or management’s current expectations and beliefs concerning future developments and their potential effects upon us, speak only as of the date hereof, and are subject to certain risks and uncertainties. We do not undertake any obligation to publicly update or correct any forward-looking statements to reflect events or circumstances that subsequently occur, or of which we hereafter become aware. Actual events, transactions and results may materially differ from the anticipated events, transactions, or results described in such statements. Our ability to consummate such transactions and achieve such events or results is subject to certain risks and uncertainties. Such risks and uncertainties include, but are not limited to, the matters set forth below:
| • | national and international political instability fostering uncertainty and volatility in the global economy including exposure to fluctuation in foreign currency rates, interest rates, and inflation, including increases in our costs and our ability to increase prices to our customers, which may result in adverse changes in our gross profit; |
| • | significant adverse changes in, reductions in, or loss of one or more of our larger volume customers or vendors; |
| • | a possible decrease in the capital spending budgets of our customers or a decrease in purchases from us; |
| • | reliance on third-parties to perform some of our service obligations to our customers, and the reliance on a small number of key vendors in our supply chain with whom we do not have long-term supply agreements, guaranteed price agreements, or assurance of stock availability; |
| • | our ability to remain secure during a cybersecurity attack, including both disruptions in our or our vendors’ Information Technology (“IT”) systems and data and audio communication networks; |
| • | our ability to secure our own and our customers’ electronic and other confidential information, while maintaining compliance with evolving data privacy and regulatory laws and regulations; |
| • | ongoing remote work trends, and the increase in cybersecurity attacks that have occurred while employees work remotely and our ability to adequately train our personnel to prevent a cyber event; |
| • | the possibility of a reduction of vendor incentives provided to us; |
| • | our dependence on key personnel to maintain certain customer relationships, and our ability to hire, train, and retain sufficient qualified personnel; |
| • | maintaining and increasing advanced professional services by recruiting and retaining highly skilled, competent personnel, and vendor certifications; |
| • | risks relating to use or capabilities of artificial intelligence including social and ethical risks; |
| • | our ability to manage a diverse product set of solutions, including artificial intelligence (“AI”) products and services, in highly competitive markets with a number of key vendors; |
| • | our dependency on continued innovations in hardware, software, and service offerings, including AI products and services, by our vendors and our ability to partner with them; |
| • | changes in the IT industry and/or rapid changes in product offerings, including the proliferation of the cloud, infrastructure as a service (“IaaS”), software as a service (“SaaS”), platform as a service (“PaaS”), and AI; |
| • | our ability to increase the total number of customers using integrated solutions by up-selling within our customer base and gaining new customers; |
| • | our ability to increase the total number of customers who use our managed services and professional services and continuing to enhance our managed services offerings to remain competitive in the marketplace; |
| • | our ability to perform professional and managed services competently, in accordance with professional standards, and free from errors or omissions; |
| • | rising interest rates or the loss of key lenders or the constricting of credit markets; |
| • | loss of our credit facility or credit lines with our vendors may restrict our current and future operations; |
| • | domestic and international economic regulations uncertainty (e.g., tariffs, sanctions, and trade agreements); |
| • | supply chain issues, including a shortage of IT products, may increase our costs or cause a delay in fulfilling customer orders, or increase our need for working capital, or delay completing professional services, or purchasing IT products or services needed to support our internal infrastructure or operations, resulting in an adverse impact on our financial results; |
| • | exposure to changes in, interpretations of, or enforcement trends in, and customer and vendor actions in anticipation of or response to, legislation and regulatory matters; |
| • | our inability to identify acquisition candidates, perform sufficient due diligence prior to completing an acquisition, successfully integrate a completed acquisition, or identify an opportunity for or successfully complete an asset disposition, may affect our earnings; |
| • | our contracts may not be adequate to protect us as we are subject to external audits which we may not pass, and our professional and liability insurance policies coverage may be insufficient to cover a claim; |
| • | a natural disaster or other adverse event at one of our primary configuration centers, data centers, or a third-party provider location could negatively impact our business; |
| • | failure to comply with public sector contracts, or applicable laws or regulations; |
| • | our ability to raise capital, maintain or increase as needed our lines of credit with vendors or floor planning facility, obtain debt for our financing transactions, or the effect of those changes on our common stock price; |
| • | significant and rapid inflation may cause price, wage, and interest rate increases, as well as increases in operating costs that may impact the arrangements that have pricing commitments over the term of the agreement; |
| • | we may not continue to repurchase any of our common stock under our share repurchase program; |
| • | our ability to implement comprehensive plans for the integration of sales forces, cost containment, asset rationalization, systems integration, and other key strategies; |
| • | fluctuations in foreign currency exchange rates may impact our results of operation and financial position; |
| • | our ability to maintain our proprietary software and update our technology infrastructure to remain competitive in the marketplace; and |
| • | our ability to protect our intellectual property rights and successfully defend any challenges to the validity of our patents or allegations that we are infringing upon any third-party patents, and the costs associated with those actions, and, when appropriate, the costs associated with licensing required technology. |
We cannot be certain that our business strategy will be successful or that we will successfully address these and other challenges, risks, and uncertainties. For a further list and description of various risks, relevant factors, and uncertainties that could cause future results or events to differ materially from those expressed or implied in our forward-looking statements, see Part I, Item 1A, “Risk Factors” and Part II, Item 7, “Management’s Discussion and Analysis of Financial Condition and Results of Operations” sections contained elsewhere in this report, as well as other reports that we file with the Securities and Exchange Commission (“SEC”).
PART I
