XBP Europe Holdings Inc

SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS

Certain statements included or incorporated by reference in this Annual Report on Form 10-K (“Annual Report”) are not historical facts but are forward-looking statements for purposes of the safe harbor provisions under The Private Securities Litigation Reform Act of 1995. Forward-looking statements generally are accompanied by words such as “may”, “should”, “would”, “plan”, “intend”, “anticipate”, “believe”, “estimate”, “predict”, “potential”, “seem”, “seek”, “continue”, “future”, “will”, “expect”, “outlook” or other similar words, phrases or expressions. These forward-looking statements include statements regarding our industry, future events, strategy, plans, intentions, or expectations or anticipated future results and other statements that are not historical facts. These statements are based on the current beliefs and assumptions of our management and are not predictions of actual performance. These statements are subject to a number of risks and uncertainties regarding our business that may change at any time, and, therefore, our actual results may differ materially from those that we expected. The factors that may affect our results include, among others: the impact of political and economic conditions on the demand for our services; the impact of a data or security breach; the impact of competition or alternatives to our services on our business pricing and other actions by competitors; our ability to address technological development and change in order to keep pace with our industry and the industries of our clients; the impact of terrorism, natural disasters or similar events on our business; the effect of legislative and regulatory actions in the United States and internationally; the impact of operational failure due to the unavailability or failure of third-party services on which we rely; the effect of intellectual property infringement; the implementation and effects of our restructuring plan; and other factors discussed in this report under the headings “Risk Factors”, “Legal Proceedings”, “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and otherwise identified or discussed in this Annual Report. You should consider these factors carefully in evaluating forward-looking statements and are cautioned not to place undue reliance on such statements, which speak only as of the date of this report.

The forward-looking statements made by us in this report speak only as of the date of this report. We undertake no obligation to update or revise any forward-looking statements to reflect events or circumstances occurring after the date of this report, except as otherwise required by law. In addition, forward-looking statements provide our expectations, plans or forecasts of future events and views based upon information available to us as of the date of this report and while we believe such information forms a reasonable basis for such statements, such information may be limited or incomplete, and our statements should not be read to indicate that we have conducted an exhaustive inquiry into, or review of, all potentially available relevant information. These statements are inherently uncertain and you are cautioned not to unduly rely upon these statements.

Except where the context otherwise requires or where otherwise indicated, the terms “Company”, “we”, “us”, “our”, “the company,” and “our business” in this Annual Report on Form 10-K refer to XBP Europe Inc. and its subsidiaries before the Business Combination, and to XBP Europe Holdings, Inc. and its consolidated subsidiaries following consummation of the Business Combination.

SUMMARY RISK FACTORS

Our business is subject to numerous risks and uncertainties, including those described in Part I. Item 1A. “Risk Factors” in this Annual Report. You should carefully consider these risks and uncertainties when investing in our securities. The principal risks and uncertainties affecting our business include the following:

• The Company’s ability to achieve continued and sustained profitability is uncertain.

• The Company may need to raise debt or equity financing, which it may be unable to do on favorable terms or at all.

• The Company relies on ETI, which is a highly leveraged public company that faces substantial doubt about its ability to continue as a going concern.

• If the Company is unable to maintain an effective system of internal controls over financial reporting, it may not be able to accurately report its financial results in a timely manner or there may be misstatements in its financial statements (which may include material misstatements).

• If ETI no longer continues to control the Company in the future, the Company’s strategy or business may be adversely impacted.

• Historical or new adverse issues, such as litigation and missed projections, associated with the Company, ETI or its management may adversely impact the Company’s reputation, business and financial position and share price.

• Certain of the Company’s contracts are subject to rights of termination, audit and/or investigation, which, if exercised, could negatively impact the Company’s reputation and reduce the Company’s ability to compete for new contracts and have an adverse effect on its business, results of operation and financial condition.

• The Company may not be able to offset increased costs with increased fees under its contracts.

• The Company’s business process automation solutions often require long selling cycles and long implementation periods that may result in significant upfront expenses that may not be recovered.

• The Company faces significant competition, including from clients who may elect to perform their business processes in-house or invest in their own technologies in-house.

• The Company’s industry is characterized by rapid technological change and the Company may be unable to compete successfully within the industry and address such changes.

• The Company’s business could be materially and adversely affected if its intellectual property or the intellectual property ETI or its subsidiaries provided under the License Agreement is not protected or is found to infringe on the intellectual property of others.

• The Company’s revenues are highly dependent on the banking and finance industries, and any decrease in demand for business process solutions in these industries could reduce its revenues.

• The Company will not achieve revenue and profit objectives if it fails to accurately and effectively bid on (and win or renew) contracts awarded through competitive bidding processes, or, if bids are won and a contract is awarded to the Company, revenue and profit objectives may not be achieved due to a number of factors outside its control.

• The Company’s profitability is dependent upon its ability to obtain adequate pricing for its services and to improve its cost structure.

• Fluctuations in the costs of labor, paper, ink, energy, by-products and other materials and resources may adversely impact the results of the Company’s operations.

• The Company relies, in some cases, on third-party hardware, software and services, which could cause errors or failures of the Company’s services and adversely affect the Company’s business and reputation.

• The Company is subject to regular client and third-party security reviews and failure to pass these may have an adverse impact on the Company’s operations.

• Currency fluctuations among local currencies of any locations where the Company operates could have a material adverse effect on the Company’s results of operations.

• The Company’s results of operations could be adversely affected by economic and political conditions.

• If the Company is unable to attract, train and retain skilled professionals, or its labor expenses increase or otherwise comprise a larger percentage of its revenue, its business and results of operations may be materially adversely affected.

• Any failure or perceived failure to comply with laws and/or regulations, which may change from time to time, in one or more of the jurisdictions in which it operates, could subject the Company to legal actions and materially adversely affect its results of operations and financial condition.

• The invasion of Ukraine by Russia, and the financial and economic sanctions and import and/or export controls imposed on Russia by the United Kingdom, the European Union, and others, has caused, and may continue to cause, significant economic and social disruption.

• COVID-19 caused a global health crisis that caused significant economic and social disruption, and a similar public health event could impact the Company’s business adversely.

• Changes in laws or regulations, or a failure to comply with any laws and regulations, in the various jurisdictions in which Company operates may adversely affect the Company’s business, investments and results of operations and Company may incur additional expenses in order to comply with the laws of those jurisdictions.

• Cybersecurity issues, vulnerabilities, and criminal activity resulting in a data or security breach could result in risks to the Company’s systems, networks, products, solutions and services.

• The Company has a limited public float, which adversely affects trading volume and liquidity, and may adversely affect the price of the Common Stock and access to additional capital.

• The Company does not expect to declare any dividends in the foreseeable future.

• The Company is a controlled company, and thus eligible for exemptions from certain corporate governance rules of Nasdaq. You may not have the same protections afforded to stockholders of companies that are subject to such requirements.

• So long as ETI controls the Company, other holders of the Company’s Common Stock will have limited ability to influence matters requiring stockholder approval, and ETI’s interests may conflict with (or may be adverse to) the interests of the other holders of Common Stock.

• The Company will incur significant increased expenses and administrative burdens as a result of being a public company.

• The Company may not be able to comply with the continued listing standards of Nasdaq.

DEFINED TERMS

Following is a glossary of other abbreviations and acronyms that are found in this Annual Report:

“BPA” means business process automation.

“BPO” means business process outsourcing.

“BTC International”* *means BTC International Holdings, Inc., a Delaware corporation.

“Business Combination”* *means the Merger and the transactions contemplated by the Merger Agreement, collectively.

“Bylaws”* *means the bylaws of the Company.

“Cantor” means CFAC Holdings VIII, LLC.

“CF* VIII” *means CF Acquisition Corp. VIII, a Delaware corporation.

“CF* VIII Class A Common Stock” *means Class A common stock of CF VIII, par value $0.0001 per share, prior to the Business Combination.

“Charter”* *means the amended and restated certificate of incorporation of the Company.

“Closing”* *means the closing of the Business Combination.

“Closing Date”* *means November 29, 2023.

“Common Stock” means common stock, par value $0.0001 per share, of the Company.

“Company”* *means XBP Europe Holdings, Inc., a Delaware corporation f/k/a CF Acquisition Corp. VIII.

“DGCL”* *means the Delaware General Corporation Law.

“Dodd-Frank Act”* *means the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010.

“EMEA Companies”* *means XBP Europe, Inc. and its subsidiaries.

“ERP” means enterprise resource planning system.

“Exchange Act” means the Securities Exchange Act of 1934, as amended.

“ETI” means Exela Technologies, Inc., a Delaware corporation.

“Existing Holders” means the holders of CF VIII Class A Common Stock who were party to the Registration Rights Agreement dated March 11, 2021 between CF VIII and such holders.

“GAAP” means generally accepted accounting principles in the United States.

“Holder”* or *“Holders” means the Existing Holders and the New Holders and any person or entity who becomes a party to the Registration Rights Agreement.

“Indebtedness” means with respect to any Person, without duplication, any obligations, contingent or otherwise, in respect of (i) the principal of and premium (if any) in respect of all indebtedness for borrowed money, including accrued interest and any per diem interest accruals, (ii) the principal and interest components of capitalized lease obligations under GAAP, (iii) amounts drawn (including any accrued and unpaid interest) on letters of credit, bank guarantees, bankers’ acceptances and other similar instruments (solely to the extent such amounts have actually been drawn), (iv) the principal of and premium (if any) in respect of obligations evidenced by bonds, debentures, notes and similar instruments, (v) the termination value of interest rate protection agreements and currency obligation swaps, hedges or similar arrangements (without duplication of other indebtedness supported or guaranteed thereby), (vi) the principal component of all obligations to pay the deferred and unpaid purchase price of property and equipment which have been delivered, including “earn outs” and “seller notes” other than accounts payable arising in the ordinary course and (vii) breakage costs, prepayment or early termination premiums, penalties, or other fees or expenses payable as a result of the consummation of the Transactions in respect of any of the items in the foregoing clauses (i) through (vi), and

(viii) all Indebtedness of another Person referred to in clauses (i) through (vii) above guaranteed directly or indirectly, jointly or severally.

“IPO” means CF VIII’s initial public offering of CF VIII Units, which was consummated on March 11, 2021.

“JOBS Act” means the Jumpstart our Business Startups Act.

“License Agreement” means the Intercompany Confidentiality and Intellectual Property License Agreement entered into between XBP Europe, Inc. and certain affiliates of the Ultimate Parent entered into concurrently with the execution of the Merger Agreement.

“Lock-Up Agreement” means the Lock-Up Agreement entered into on October 9, 2022, by and between XBP Europe, Inc., BTC International and CF VIII.

“Merger” means the merger of Merger Sub with and into XBP Europe, Inc.

“Merger Agreement” means the Agreement and Plan of Merger, dated as of October 9, 2022, by and among CF VIII, Merger Sub, BTC International and XBP Europe, Inc. (as the terms and conditions therein may be amended, modified or waived from time to time).

“Merger Sub” means Sierra Merger Sub Inc.

“Nasdaq Listing Rule” means the Nasdaq Stock Market Listing Rule 5635.

“New Holders” means the parties listed under the New Holders on the signature page to the Registration Rights Agreement.

“Person” means any individual, firm, corporation, partnership, limited liability company, incorporated or unincorporated association, trust, estate, joint venture, joint stock company, Governmental Authority or instrumentality or other entity of any kind.

“Placement Units” means the 540,000 CF VIII Units initially issued to Cantor in the Private Placement.

“Placement Warrants” means the 135,000 Warrants underlying the Placement Units.

“Private Placement” means the private placement that closed concurrently with the closing of the IPO, on March 11, 2021, pursuant to which CF VIII issued and sold to Cantor 540,000 Placement Units, at a purchase price of $10.00 per Placement Unit, generating gross proceeds of $5.4 million.

“Private Warrants” means the Private Placement Warrants and the Forward Purchase Warrants.

“Public Warrants” means the CF VIII Warrants sold as part of the CF VIII Units in the IPO, which are currently exercisable at a price of $11.50 per share and were assumed by us in connection with the Business Combination.

“Registration Rights Agreement” means the Amended and Restated Registration Rights Agreement entered into by and among the Company, Cantor, the independent directors of CF VIII, and BTC International upon the Closing.

“Sarbanes-Oxley Act” means the Sarbanes-Oxley Act of 2002.

“SEC” means the United States Securities and Exchange Commission.

“Securities Act” means the Securities Act of 1933, as amended.

“Services Agreement” means the Services Agreement entered into upon the Closing between XBP Europe, Inc. and Exela BPA.

“Tax Sharing Agreement” means the Tax Sharing Agreement entered into upon the Closing between ETI, XBP Europe, Inc. and the Company.

“Ultimate Parent” means ETI-XCV Holdings, LLC, an indirect parent of BTC International and wholly owned subsidiary of ETI.

“Ultimate Parent Support Agreement” means the Ultimate Parent Support Agreement entered into on October 9, 2022, by and between CF VIII and Ultimate Parent.

“Warrants” means warrants to purchase shares of Common Stock.