Climb Global Solutions (CLMB) risk factors, FY2025 10-K

Risks Related to our Business and Industry

1. 01We serve customers and have locations throughout the world and are subject to terrorist attacks, acts of war, natural disasters, global pandemic and other similar risks, which could materially adversely affect our business, financial condition, and results of operations28% rewritten
2. 02Changes in the information technology industry and/or economic environment may reduce demand for the products and services we sell
3. 03The IT products and services industry is intensely competitive and actions of competitors, including manufacturers of products we sell, can negatively affect our business30% rewritten
4. 04The way software products are distributed and sold is changing, and new methods of distribution and sale may emerge or expand
5. 05We offer credit to our customers and, therefore, are subject to significant credit risk
6. 06We face substantial competition from other companies52% rewritten
7. 07Our business is substantially dependent on a limited number of customers and vendors, and the loss or any change in the business habits of such key customers or vendors may have a material adverse effect on our financial position and results of operations20% rewritten
8. 08Disruptions in our information technology and data networks could affect our ability to service our clients and cause us to incur additional expenses
9. 09Failure to adequately maintain the security of our electronic systems and confidential information could materially adversely affect our business, financial condition and results of operations97% rewritten
10. 10We rely heavily on our internal information systems, which, if not properly functioning, could materially adversely affect our business
11. 11We depend on certain key personnel
12. 12Changes in our global mix of earnings, tax laws, and regulations could cause fluctuations in our effective tax rate and adversely impact financial results
13. 13We may explore additional growth through acquisitions60% rewritten
14. 14When the Company makes acquisitions, it may take on additional liabilities or not be able to successfully integrate such acquisitions
15. 15Our results of operations are subject to fluctuations in foreign currency
16. 16The terms of our debt arrangement impose restrictions on our ability to operate which in turn could negatively affect our ability to respond to business and market conditions and therefore could have an adverse effect on our business and operating results
17. 17Our variable rate indebtedness subjects us to interest rate risk, which could cause our indebtedness service obligations to increase significantly

Legal and Regulatory Risks

1. 18Our operations are subject to numerous complex federal, state, provincial, local and foreign laws and regulations in a number of areas, including labor and employment, advertising, e-commerce, tax, trade, import and export requirements, economic and trade sanctions, anti-corruption, data privacy requirements (including those under the European Union General Data Protection Regulation and the California Consumer Privacy Act), anti-competition, environmental and health and safety32% rewritten
2. 19The Company may be subject to intellectual property rights claims, which are costly to defend, could require payment of damages or licensing fees and could limit the Company's ability to use certain technologies in the future
3. 20Our business could be negatively affected as a result of the actions of activist shareholders
4. 21Changes in accounting rules, or the misapplication of current accounting rules, may adversely affect our future financial results
5. 22Changes to U.S. Tariffs, import and export controls and other trade regulations could adversely affect our business, financial condition and results of operationsNew

Financial Risks and Market Risks

1. 23Our quarterly financial results may fluctuate, which could lead to volatility in our stock price
2. 24Our goodwill and identifiable intangible assets could become impaired, which could reduce the value of our assets and reduce net income in the year in which the write-off occurs
3. 25The inability to obtain financing on favorable terms may adversely impact our business, financial position and results of operations
4. 26We have suspended quarterly dividends and may not resume paying dividends on our Common Stock, which could adversely affect the value of our Common StockNew

General Risk Factors

1. 27Global and regional economic and political conditions may have an adverse impact on our business. We are also subject to environmental laws and regulations, and may be impacted by climate change, in ways that could materially adversely affect our business
2. 28General economic weakness may reduce our revenues and profits
3. 29If we fail to maintain an effective system of internal controls or discovers material weaknesses in our internal controls over financial reporting, we may not be able to report our financial results accurately or timely or detect fraud, which could have a material adverse effect on our business
4. 30Changes in income tax and other regulatory legislation
5. 31We may be subject to litigation