This Quarterly Report on Form 10-Q may contain 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, including the following:

Our business and results of operations are subject to risks and uncertainties, many of which are beyond our ability to control or predict. Because of these risks and uncertainties, actual results may differ materially from those expressed or implied by forward-looking statements, and investors are cautioned not to place undue reliance on such statements, which speak only as of the date thereof. Important factors that could cause actual results to differ materially from our expectations and may adversely affect our business and results of operations, include, but are not limited to, those items described herein or set forth in the Form 10-K for the fiscal year ended December 31, ~~2020~~2021 filed with the Securities and Exchange Commission ("SEC") on March ~~16, 2021~~14, 2022 and this Quarterly Report on Form 10-Q for the quarter ended ~~September 30, 2021.~~March 31, 2022. Unless otherwise noted in this report, any description of "us," "we," or "our," refers to ~~StarTek,~~Startek, Inc. ("Startek") and its subsidiaries.

In accordance with the SEC's expanded definition of Smaller Reporting Companies effective September 10, 2018, Startek qualifies for Smaller Reporting Company status. As such, it has decided to take advantage of the relief provided from Part 1, Item 3.

As of March 31, 2022 and December 31, 2021, there were 40,281,045 and 40,480,627 shares outstanding respectively of Common Stock, net off treasury stock.

Unless otherwise noted in this report, any description of "us," "we," or "our," refers to ~~StarTek,~~Startek, Inc. and its subsidiaries (the "Company"). Financial information in this report is presented in U.S. dollars.

Startek is a leading global provider of technology-enabled business process management solutions. The Company provides omni-channel customer experience, digital transformation, and technology services to some of the finest brands globally. Startek is committed to impacting clients’ business outcomes by focusing on enhancing customer experience and digital enablement across all touchpoints and channels. Startek has more than ~~46,000~~43,000 CX experts globally spread across 4638 delivery campuses in 13 countries. The Company services over ~~200~~190 clients across various industries such as Banking and Financial Services, Insurance, Technology, Telecom, Healthcare, Travel and Hospitality, Consumer Goods, Retail, and Energy and Utilities.

The Company offers a repository of digital and omnichannel solutions based on decades of experience in driving growth by putting the customer at the center of our business. Because no one solution fits all, we have crafted solution delivery to suit various industries. Startek has delivery campuses across India, United States, Malaysia, Philippines, Australia, South Africa, Canada, Honduras, Jamaica, Kingdom of Saudi Arabia, Argentina, Peru, and Sri Lanka.

The accompanying consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America ("~~US-GAAP"~~U.S. GAAP") for interim financial information and instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all information and footnotes required by ~~US-GAAP~~U.S. GAAP for complete financial statements.

These consolidated financial statements reflect all adjustments (consisting only of normal recurring entries, except as noted) which, in the opinion of management, are necessary for fair presentation. The results of operations for interim periods are not necessarily indicative of full-year results.

The consolidated financial statements ~~reflect~~include the ~~financial results~~accounts of Startek, Inc and its all subsidiaries ~~that are more than~~ ~~50%~~ ~~owned and~~ over which the Company exerts control. When the Company does not have majority ownership in an entity but exerts significant influence over that entity, the Company accounts for the entity under the equity method of accounting. All intercompany balances are eliminated on consolidation. Where our ownership of a subsidiary was less than 100%, the non-controlling interest is reported in our consolidated balance sheet. The non-controlling interest in our consolidated net income is reported as "Net income ~~(loss)~~ attributable to non-controlling interests" in our consolidated statement of income (loss).

As of December 31, ~~2020,~~2021, the consolidated balance sheet included herein was derived from the audited financial statements as of that date but does not include all disclosures including notes required by ~~US-GAAP.~~U.S. GAAP. As such, the information included in this quarterly report on Form 10-Q should be read in conjunction with the consolidated financial statements and accompanying notes included in our Annual Report on Form 10-K for the year ended December 31, ~~2020~~2021.

The figures for the corresponding previous year have been regrouped/reclassified wherever necessary, to make them comparable.

The preparation of consolidated financial statements in accordance with U.S. GAAP requires management to make estimates and assumptions that affect the amounts reported in the consolidated financial statements. Significant items subject to such estimates and assumptions include the useful lives of property, plant and equipment, intangibles, impairment of goodwill, valuation allowances for deferred tax assets, leases, ~~and~~ provision for doubtful debts and restructuring costs. Management believes that the estimates used in the preparation of the consolidated financial statements are ~~reasonable, and management has made assumptions about the possible effects of the novel coronavirus (“COVID-~~~~19”~~~~) pandemic on critical and significant accounting estimates.~~reasonable. Although these estimates are based upon management’s best knowledge of current events and actions, actual results could differ from these estimates. Any changes in estimates are adjusted prospectively in the Company’s consolidated financial statements.

The Company utilizes a five-step process given in ASC 606, for revenue recognition that focuses on the transfer of control, rather than the transfer of risks and rewards. It also provided additional guidance on accounting for contract acquisition and fulfillment costs. Refer to Note 4 on ~~"Revenue from Contracts with Customers"~~"Revenue" for further information.

We determine if an arrangement is a lease at inception. Operating leases are included in right-of-use (“ROU”) assets, current maturity of operating lease liabilities, and operating lease liabilities in our consolidated balance sheet. Finance leases are included in property plant and equipment, long-term debt, accrued expenses, and other current liabilities in our consolidated balance sheet.

ROU assets represent our right to use an underlying asset for the lease term and lease liabilities represent our obligation to make lease payments arising from the lease. Operating lease ROU assets and liabilities are recognized at the commencement date based on the present value of remaining lease payments over the balance lease term. As most of our leases do not provide an implicit rate, we use our incremental borrowing rate based on the information available at the date of initial application on determining the present value of lease payments. The operating lease ROU asset also includes any lease payments made and excludes lease incentives. Our lease terms may include options to extend or terminate the lease when it is reasonably certain to exercise that option. Lease expense is recognized on a straight-line basis over the lease term.

ASC 842 requires an entity to apply the guidance on impairment of long-lived assets in ASC 360 to right-of-use assets. Therefore, right-of-use assets must be monitored for impairment, like other long-lived nonfinancial assets, regardless of whether the lease is an operating lease or a finance lease. When impairment indicators exist, an asset (asset group) should be tested to determine whether there is an impairment.

The Company elected the practical expedient permitted under the transition guidance under Topic 842, which among other matters, allowed the Company (i) not to apply the recognition requirements to short-term leases (leases with a lease term of 12 months or less), (ii) not to reassess whether any expired or existing contracts are or contain leases, (iii) not to reassess the lease classification for any expired or existing leases, and (iv) not to reassess initial direct costs for any existing leases. Refer to Note 13, "Leases" for additional information.

We have lease agreements with lease and non-lease components, which are generally accounted for separately.

~~The Company accounts for business combinations under the acquisition method of accounting in accordance with ASC~~ ~~805,~~ Business Combinations, by recognizing identifiable tangible and intangible assets acquired, liabilities assumed, and non-controlling interests in the acquired business at their fair values. The excess of the cost of the acquired business over the fair value of the identifiable tangible and intangible assets acquired and liabilities assumed is recorded as goodwill. Acquisition-related costs are expensed as incurred.

Goodwill represents the cost of acquired businesses in excess of the fair value of identifiable tangible and intangible net assets purchased. Goodwill is not amortized but is tested for impairment at least on an annual basis on December 31, based on a number of factors, including operating results, business plans, and future cash flows. The Company performs an assessment of qualitative factors to determine whether the existence of events or circumstances leads to a determination that it is more likely than not that the fair value of a reporting unit is less than its carrying amount. Based on the assessment of events or circumstances, the Company performs a quantitative assessment of goodwill impairment if it determines that it is more likely than not that the fair value of a reporting unit is less than its carrying amount. If, based on the quantitative impairment analysis, the carrying value of a reporting unit exceeds the fair value of reporting units, an impairment loss is recognized in an amount equal to the excess. In addition, the Company performs a quantitative assessment of goodwill impairment between annual tests if an event occurs or circumstances change that would be more likely than not reduce the fair value of a reporting unit below its carrying amount. Refer to Note 3 for information and related disclosures.

Intangible assets acquired in a business combination were recorded at fair value at the acquisition date using generally accepted valuation methods appropriate for the type of intangible asset. Intangible assets with definite lives are amortized over the estimated useful lives and are reviewed for impairment at least annually, or more frequently if indicators of impairment arise. ~~Refer to Note~~ 3 ~~on "Goodwill and Intangible assets" for further information.~~

The Company has operations in Argentina and its functional currency has historically been the Argentine Peso. The Company monitors inflation rates in countries where it operates as required by USU.S. GAAP. Under ASC 830-10-45-12, an economy must be classified as highly inflationary when the cumulative three-year rate exceeds 100%. Considering the inflation data of Argentina, the Company has considered Argentina to be highly inflationary beginning on July 1, 2018. In accordance with ASC 830, the functional currency of the Argentina business has been changed to USD, which requires re-measurement of the local books to USD. Exchange gains and losses are recorded through net income instead of through other comprehensive income as had been done historically. Translation adjustments from periods prior to the change in functional currency were not removed from equity.

Investment in ~~equity-accounted~~equity accounted investee is an entity over which the Company has significant influence and which is neither a subsidiary nor a joint arrangement. Significant influence is the power to participate in ~~the investee's~~ financial and operating policy decisions of the investee but is not control or joint control over those policies.

Investment in ~~equity-accounted investee is~~equity accounted investees are accounted for using ~~the~~ equity method of accounting. Under the equity method, the investment in ~~equity-accounted investees~~equity accounted investee is initially recognized at cost and adjusted thereafter for the ~~post-acquisition~~post acquisition changes in the Company’s share of net assets of the ~~equity-accounted~~equity accounted investees. Goodwill relating to an investment in ~~equity-accounted~~equity accounted investees, if any, is included in the carrying amount of the investment and is neither amortized nor individually tested for impairment.

In case of Limited Partnerships Investments, there is a specific SEC staff guidance which is included in ASC 323-30-S99-1 which provides that investments in all limited partnerships should be accounted for pursuant to paragraph 970-323-25-6. That guidance requires the use of the equity method unless the investor's interest "is so minor that the limited partner may have virtually no influence over partnership operating and financial policies."

The consolidated statement of income ~~(loss)~~ reflects the Company’s share of the results of operations of the ~~equity-accounted~~equity accounted investees. When there has been a change recognized directly in the equity of the ~~equity-accounted~~equity accounted investees, the Company recognizes its share of any changes and discloses this, when applicable, in the statement of stockholders' equity. Unrealized gains and losses resulting from transactions between the Company and the ~~equity-accounted investment~~equity accountedinvestment are eliminated to the extent of the interest in the ~~equity-accounted~~equity accounted investees. The Company’s share of profit/loss of ~~equity-accounted investees~~equity accounted investee is shown on the face of the consolidated statement of income (loss).

The financial statements of the ~~equity-accounted investee~~equity accounted investees are prepared for the same reporting period as the Company. When necessary, adjustments are made to bring the accounting policies in line with those of the Company. After ~~the~~ application of the equity method, the Company determines at each reporting date whether there is any objective evidence that the investment in ~~equity-accounted investees~~equity accounted investee is impaired, if there has been other than a temporary decline in carrying value. If this is the case, the Company calculates the amount of impairment as the difference between the recoverable amount of the associate and its carrying value and recognizes the amount in the ~~‘share~~'share of ~~income/~~profit (loss) of ~~equity-accounted investees'~~equity accounted investee in the consolidated statement of income (loss)'. Refer to Note 14, "Investment in Equity-Accounted Investees" for additional information and related disclosures.

We recognize expenses related to all share-based payments to employees, including grants of employee stock options, based on the grant-date fair values amortized straight-line over the period during which the employees are required to provide services in exchange for the equity instruments. We include an estimate of forfeitures when calculating compensation expenses. We use the Black-Scholes method for valuing stock-based awards. See Note 10, “Share-Based Compensation” for further information.

We account for common stock warrants as equity instruments, based on the specific terms of our warrant agreement. For more information refer to Note 10, "Share-Based Compensation."

The Company has aligned the cash flow for comparable period for rectifications made in the previous year to presentation of certain transactions arising from the debt re-financing and payment of call option premium.

In Q22021 a correction was made to present the payment of $3 million for call option to acquire a controlling stake in CSS Corp., as a reduction from cash flows from investing activities instead of the earlier presentation where such amount was reduced from cash flows from operating activities in Q12021. Further, in Q42021, a correction was made to present the payment of an amount of $8.5 million paid and expensed in the income statement, as debt issuance cost, as a reduction from cash flows from financing activities and a corresponding increase in cash flows from operating activities.

The effect of both the above reclassifications is an increase in cash flows from operating activities by $11.5 million and a corresponding decline in cash flows from investing activities and in cash flows from financing activities by $3 million and $8.5 million, respectively.

The Company has evaluated and concluded that the above corrections were not qualitatively material on previously filed quarterly consolidated financial statements. The above presentation errors within the consolidated statements of cash flows did not impact net income, comprehensive income, earnings per share, total equity, or the balance sheet and also detailed footnotes giving details related to both transactions have been given in all quarters and in the annual financial statements for the year ended December 31, 2021. Also, these presentation errors did not impact Company’s debt covenants, its net debt position, segment reporting and cash and cash equivalents.

On an ongoing basis, management assesses the profitability and utilization of our facilities and in some cases, management has chosen to close facilities. Severance payments that occur from reductions in the workforce are in accordance with our post-employment policy and/or statutory requirements that are communicated to all employees; therefore, severance liabilities are recognized when termination of employment is communicated to the employee(s). Other liabilities for costs associated with an exit or disposal activity are recognized when the liability is incurred, instead of upon commitment to an exit plan. A significant assumption used in determining the amount of the estimated liability for closing a facility is the estimated liability for future lease payments on vacant facilities. We determine our estimate of sublease payments based on our ability to successfully negotiate early termination agreements with landlords, a third-party broker, or management’s assessment of our ability to sublease the facility based upon the market conditions in which the facility is located. If the assumptions regarding early termination and the timing and amounts of sublease payments prove to be inaccurate, we may be required to record additional losses, or conversely, a future gain. Refer to Note 6, "Impairment Losses and Restructuring/Exit cost" for additional information.

We are involved in few claims and legal actions, such as wage and hour, wrongful termination, and other employment-related claims, that arise in the ordinary course of business, some of which may be covered by insurance. The outcomes of these actions are not predictable, but we do not believe that the ultimate resolution of these actions will have a material adverse effect on our financial position, results of operations, liquidity, or capital resources. We record an accrual for legal contingencies when we determine that it is probable that we have incurred a liability and we can reasonably estimate the amount of the loss. However, if there is a significant increase in the number of these claims, or if we incur greater liabilities than we currently anticipate under one or more claims, it could materially and adversely affect our business, financial condition, results of operations and cash flows.

In June 2016, FASB issued ASU 2016-13, Financial Instruments - Credit Losses (Topic 326) ("ASU 2016-13"), Measurement of Credit Losses on Financial Instruments. The standard significantly changes how entities will measure credit losses for most financial assets and certain other instruments that aren't measured at fair value through net income. The standard will replace today's "incurred loss" approach with an "expected loss" model for instruments measured at amortized cost. For available-for-sale debt securities, entities will be required to record allowances rather than reduce the carrying amount, as they do today under the other-than-temporary impairment model. It also simplifies the accounting model for purchased credit-impaired debt securities and loans. This ASU is effective for annual periods beginning after December 15, 2022, and interim periods therein for smaller reporting companies. We do ~~not~~ ~~expect~~are currently evaluating the ~~adoption~~impact of ~~ASU~~ ~~2016~~-13 ~~will have a material impact~~the new guidance on our consolidated financial statements.

In March 2020, the FASB issued ASU No. 2020-04, “Facilitation of the Effects of Reference Rate Reform on Financial Reporting.” This ASU provides temporary optional expedients and exceptions to the guidance in USU.S. GAAP on contract modifications and hedge accounting to ease the financial reporting burdens related to the expected market transition from the London Interbank Offered Rate (“LIBOR”) and other interbank offered rates to alternative reference rates, such as the Secured Overnight Financing Rate (“SOFR”). Entities can elect not to apply certain modification accounting requirements to contracts affected by what the guidance calls reference rate reform if certain criteria are met. An entity that makes this election would not have to remeasure the contracts at the modification date or reassess a previous accounting determination. The guidance is effective upon issuance and generally can be applied through December 31, 2022. This amendment shall apply to term loan obtained by the Company which are linked to LIBOR. The Company is ~~still in~~closely monitoring the ~~process~~market and the announcements from the bank managing the transition to new benchmark interest rates for its term loan benchmarked to LIBOR. Based on announcements by bank, the transition will take effect. The Company is not expecting any material financial impact of ~~assessing~~transition from LIBOR to alternative benchmark rates on its floating rate borrowings linked to LIBOR.

In November 2021, the FASB issued ASU 2021-10, Government Assistance (Topic 832): Disclosures by Business Entities about Government Assistance. This update requires annual disclosures about transactions with a government that are accounted for by applying a grant or contribution accounting model by analogy. This standard is effective for annual periods beginning after December 15, 2021 and should be applied either prospectively or retrospectively. Early adoption is permitted. The Company is currently evaluating the impact of ~~this ASU.~~adopting ASU 2021-10 within its Form 10-K for the fiscal year 2022.

We perform a goodwill impairment analysis at least annually (in the fourth quarter of each year) unless indicators of impairment exist in interim periods. The assumptions used in the analysis are based on the Company’s internal budget. The Company projects revenue, operating margins, and cash flows for a period of five years and applies a perpetual long-term growth rate using discounted cash flows (DCF) method. These assumptions are reviewed annually as part of management’s budgeting and strategic planning cycles. These estimates may differ from actual results. ~~In arriving at its forecasts, the Company considers past experience, economic trends and inflation, and industry and market trends, including the outbreak of COVID-~~~~19.~~ The projections also take into account factors such as the expected impact from new client wins and expansion from existing clients' businesses and efficiency initiatives, and the maturity of the markets in which each business operates.

As of ~~September 30,~~March 31, 2022 and December 31, 2021, based on the management assessment, we concluded that there is 0 impairment of goodwill.

The following table presents the changes in goodwill during the ~~nine~~three months ended ~~September 30, 2021~~March 31, 2022 and year ended December 31, ~~2020:~~2021:

As of ~~September 30, 2021~~March 31, 2022, , based on ~~the~~ qualitative assessment, we concluded there is 0 impairment ofon the Company's intangible assets.

Expected future amortization of intangible as of ~~September 30, 2021~~March 31, 2022 is as follows:

The Company follows a five-step process in accordance with ASC 606, for revenue recognition that focuses on the transfer of control, rather than the transfer of risks and rewards.

All of the Company's revenues are derived generally from written contracts with our customers. ~~Generally speaking, our~~Our contracts document our customers' ~~intent~~agreement to utilize our services and the relevant terms and conditions under which our services will be provided. Our contracts generally do not contain minimum purchase requirements nor do they include termination penalties. Our customers may generally cancel our contract, without cause, upon written notice (generally ninety days). While our contracts do have stated terms, because of the facts stated above, they are accounted for on a month-to-month basis.

Our contracts give us the right to bill for services rendered during the period, which for most of our customers is a calendar month, with a few customers specifying a fiscal month. Our payment terms vary by client and generally range from due upon receipt to 60-90 days.

We have identified one main performance obligation for which we invoice our customers, which is to stand ready to provide care services for our customers’ clients. A stand-ready obligation is a promise that a customer will have access to services as and when the customer decides to use them. Ours is considered a stand-ready obligation because the delivery of the underlying service (that is, receiving customer contact and performing the associated care services) is outside of our control or the control of our customer.

Our stand-ready obligation involves outsourcing of the entire customer care life cycle, including:

These activities are all considered an integral part of the production activities required in the service of standing ready to accept calls as and when they are directed to us by our clients.

Because our customers receive and consume the benefit of our services as they are performed and we have the contractual right to invoice for services performed to date, we have concluded that our performance obligation is satisfied over time. Accordingly, we recognize revenue for our services in the month they are performed.

We are ~~generally~~ entitled to invoice for our services on a monthly basis. We invoice according to the hourly and/or per-transaction rates stated in each contract for the various activities we perform. Some contracts include opportunities to earn bonuses or include parameters under which we will incur penalties related to performance in any given month. Bonus or penalty amounts are based on the current month’s performance. Formulas are included in the contracts for the calculation of any bonus or penalty. There is no other performance in future periods that will impact the bonus or penalty calculation in the current period. We estimate the amount of the bonus or penalty using the “most likely amount” method and we apply this method consistently. The bonus or penalty calculated is generally approved by the client prior to billing (and revenue being recognized). The unbilled revenue, where the right to invoice has not accrued is recognized based on service delivery estimate.

Because the Company’s contracts are essentially month-to-month, we have elected the following practical expedients:

Revenues by our clients' industry verticals for the three ~~and~~ ~~nine~~months ended ~~September 30, 2021~~March 31, 2022 and ~~2020~~2021 respectively:

Basic earnings per common share are computed based on our weighted average number of common shares outstanding. Diluted earnings per share are computed based on our weighted average number of common shares outstanding plus the effect of dilutive stock options, non-vested restricted stock, and deferred stock units, using the treasury stock method.

When a net loss is reported, potentially issuable common shares are excluded from the computation of diluted earnings per share as their effect would be anti-dilutive.

For three ~~and~~ ~~nine~~months ended ~~September 30, 2021~~March 31, 2022 and ~~2020~~2021, the following number of shares were used in the computation of basic and diluted earnings per share calculation (in thousands):

The Company always maintained Startek's 2008 Equity Incentive Plan (see Note 10, "Share-based ~~compensation and employee benefit plans"~~compensation" for more information).

As of ~~September 30, 2021,~~March 31, 2022, based on the management assessment, we concluded ~~that~~ there is 0 impairment of goodwill.

The table below summarizes the balance of accrued restructuring cost, voluntary/involuntary termination costs, and other ~~acquisition-related~~exit-related costs, which are included in other accrued liabilities in our consolidated balance sheet. The changes during the ~~nine~~three months ended ~~September 30, 2021~~March 31, 2022 and the year ended December 31, ~~2020~~2021.

In ~~2021,~~2022, the Company has closed ~~one~~few of its facilities in ~~Canada,~~Argentina, where we have terminated service of number of employees. We have ~~also offered a voluntary retirement plan to certain employees in~~ ~~one~~ ~~other geography. We have~~ recognized a provision for employee-related costs regarding the above ~~voluntary/involuntary~~ termination. We expect to pay the remaining termination costs of ~~$58~~$552 by the end of the fourth quarter of ~~2021.~~2022.

In 2022, the Company has recognized provision for the remaining costs associated with the lease that has been surrendered in Argentina. We expect to pay the remaining termination costs of $64 by the end of the second quarter of 2022.

Our locations in Canada and the Philippines primarily serve US-based clients. The revenues from these clients are billed and collected in US Dollars, but the expenses related to these revenues are paid in Canadian Dollars and Philippine Pesos. We ~~enter~~had entered into derivative contracts, in the form of forward contracts and range forward contracts (a transaction where both a call option is purchased and a put option is sold) to mitigate this foreign currency exchange risk. The contracts ~~cover~~covered periods commensurate with expected exposure, generally three to twelve months. We ~~have~~had elected to designate our derivatives as cash flow hedges to associate the hedges' results with forecasted expenses.

~~The Company had terminated all cash flow hedges contracts early in~~ ~~April 2020~~ ~~due to a change in counterparty relationship, hence balance as~~As of ~~September~~March ~~30,~~31,2022 and 2021, is ~~nil.~~there were no derivative contract in effect.

~~We have also entered into foreign currency range forward contracts and interest swap contracts as required by our lenders. These hedges are~~ ~~not~~ ~~designated hedges under ASC~~ ~~815,~~~~Derivatives and Hedging.~~ ~~These contracts generally do~~ ~~not~~ ~~exceed 3 years in duration.~~

Unrealized gains and losses and changes in the fair value of these derivatives are recognized as incurred in exchange gain (loss), net in the consolidated statement of income (loss). The following table presents these amounts for the ~~three~~ ~~and~~ ~~nine~~ ~~months ended~~ ~~September 30, 2021~~ ~~and~~ ~~2020~~:

~~The Company had terminated all derivative (non-designated hedge) contracts in~~ ~~November 2020~~ ~~and realized and accounted for gain and loss on settlement of contracts in the consolidated statement of income (loss).~~

The fair value hierarchy prioritizes the inputs to valuation techniques used to measure fair value. The hierarchy requires that the Company maximize the use of observable inputs and minimize the use of unobservable inputs. The levels of the fair value hierarchy are described below:

Level 2 - Quoted prices for similar instruments in active markets, quoted prices for identical or similar instruments in markets that are not active, and model-based valuation techniques for which all significant assumptions are observable in the market.

Level 3 - Unobservable inputs that cannot be supported by market activity and are significant to the fair value of the asset, liability, or equity such as the use of certain pricing models, discounted cash flow models, and similar techniques use significant assumptions. These unobservable inputs reflect our own estimates of assumptions that market participants would use in pricing the asset or liability:

The values of our derivative instruments are derived from pricing models using inputs based upon market information, including contractual terms, market prices, and yield curves. The inputs to the valuation pricing models are observable in the market, and as such the derivatives are classified as Level 2 in the fair value hierarchy.

As of ~~September 30,~~ March 31, 2022 and December 31,2021,~~the Company has settled all derivative contracts, hence~~ there ~~are~~were no derivative assets and liabilities.

The Company has a number of working capital facilities in various countries in which it operates. These facilities provide for a combined borrowing capacity of approximately $30 million for a number of working capital products. These facilities bear interest at benchmark rate plus margins between 3.0% and 4.5% and are due on demand. These facilities are collateralized by various Company assets and have a total outstanding balance of ~~$3.9~~$3.5 million as of ~~September~~ ~~30,~~~~2021.~~March 31, 2022.

On February 18, 2021, the Company completed a debt refinancing with a newly secured $185 million senior debt facility, comprising a $165 million term loan and a $20 million revolving credit facility. Under the new senior debt, borrowings will bear a tiered interest rate based on the Company’s consolidated net leverage ratio and is initially set at LIBOR plus 450 basis points.

The term loan facility amortizes 2.5% on the date that is 21, and 24 months from closing, 3.75% on the date that is 27, 30, 33, and 36 months from closing, 5.0% on the date that is 39, 42, 45, 48 and 51 months from closing, 10% on the date that is 54 months from closing and 15% on the date that is 57 months from closing and balance will be paid on the closure of term loan.

On February 22, 2021, the Company used proceeds from the above facilities agreement to prepay and terminate the existing credit facility made available to it under that certain Amended and Restated Senior Term and Revolving Facilities Agreement, dated October 27, 2017.

The Term loan has a floating interest rate of USD LIBOR plus 4.5% annually for the first year and thereafter the margin will range between 3.75% and 4.5% subject to certain financial ratios.

~~The~~In 2021, the Company incurred debt issuance costs of $11.3 million in connection with the new term loan. As per ASC 470, accounting guidance on term loan extinguishment, the Company has expensed off the debt issuance cost of $8.5 million paid to the lenders towards the new term loan and $2.5 million remaining unamortized debt issuance cost of the old term loan in interest expense, net in the consolidated statement of income (loss).

~~In connection with~~ Debt issuance costs paid to the Company’s counsel and other third parties of $2.8 million is being amortized over the period of the new term ~~loan, the~~loan. The balance unamortized ~~debt issuance~~portion of such costs as of ~~September~~March 31, 2022, ~~30,~~~~2021~~ ~~amount~~amounted to ~~$2.5~~$2.2 million which ~~have net~~has been netted off against long-term debt on the consolidated balance sheet.

The Term loan is subject to certain covenants, whereby the Company is required to meet certain financial ratios and obligations on a quarterly basis. As of March 31, 2022, the Company was in compliance with all financial covenants.

Following table presents the changes in debt issuance cost during the ~~nine~~three months ended ~~September 30, 2021~~March 31, 2022 and the year ended December 31, ~~2021~~2022:

We have entered into factoring agreements with financial institutions to sell certain of our accounts receivable under non-recourse agreements. Under the arrangement, the Company sells the trade receivables on a non-recourse basis and accounts for the transactions as sales of receivables. The applicable receivables are removed from the Company's consolidated balance sheet when the Company receives the cash proceeds. We do not service any factored accounts after the factoring has occurred. We utilize factoring arrangements as part of our management of working capital. The balance of funds received from factored receivables under these agreements was ~~$20.2~~$17.8 million and $21.6 million as of ~~September~~March 31, 2022 and ~~30,~~December 31, 2021, ~~2021.~~respectively.

On December 27, 2018, the Company executed an agreement to secure a loan against US and Canadian assets for $2.06 million at the interest of 7.57% per annum, to be repaid over 2.5 years. The loan was funded in January 2019. The amount outstanding as of ~~September~~March 31, 2022 ~~30,~~~~2021~~is ~~$0.1~~$0.025 million.

On November ~~02,~~2, 2020, the Company executed Master Equipment Finance Agreement to finance the purchase of equipment for $4 million at the interest of 5.27% per annum with a maturity date 34 months after the date of first utilization of equipment loan. The amount outstanding as of ~~September~~March 31, 2022 ~~30,~~~~2021~~is ~~$3.3~~$2.8 million.

From time to time and when management believes it to be advantageous, we may enter into other arrangements to finance the purchase or construction of capital assets.

On January 23, 2018, Startek entered into the Amazon Transaction Agreement, pursuant to which we agreed to issue to Amazon.com NV Investment Holdings LLC, a wholly-owned subsidiary of Amazon, ~~(“NV Investment”),~~ a warrant (the “Warrant”) to acquire up to 4,000,000 shares ~~(the “Warrant Shares”)~~ of our common stock, ~~par value $0.01 per share (“Common Stock”),~~ subject to certain vesting events. On ~~May 17, 2019,~~ the Company issued and sold 692,520 shares of Common Stock to certain investors at a price per share of $7.48. The Warrant contains certain anti-dilution provisions and as a result of such offering, the total number of shares issuable to Amazon was adjusted from 4,000,000 to 4,002,964 and the exercise price of the Warrant was adjusted from $9.96 per share to $9.95 per share. On ~~June 29, 2020,~~ the Company issued and sold 1,540,041 shares of Common Stock to CSP Victory Limited at a price per share of $4.87 per share. As a result of such transaction, the total number of shares issuable to Amazon has been adjusted from 4,002,964 to 4,006,051 and the exercise price of the Warrant was adjusted from ~~$9.95~~ per share to $9.94 per share. We entered into the Amazon Transaction Agreement in connection with commercial arrangements between us and any of our affiliates and Amazon and/or any of its affiliates pursuant to which we and any of our affiliates provide and will continue to provide commercial services to Amazon and/or any of its affiliates. The vesting of the Warrant shares ~~described below,~~ is linked to payments made by Amazon or its affiliates ~~(directly or indirectly through~~ ~~third~~ ~~parties)~~ pursuant to a service contract. Since no vesting event occurred in the ~~commercial arrangements.~~

~~The~~fiscal year ~~first~~2021 ~~tranche of 425,532 Warrant Shares was vested upon~~and we do not anticipate additional vesting in the ~~execution of~~near future, the ~~Amazon Transaction Agreement. The remainder of the Warrant Shares will vest in various tranches based on Amazon’s payment of up to $600 million to us or~~Company had not accrued any ~~of our affiliates in connection with the receipt by Amazon or any of its affiliates of commercial services from us or any of our affiliates. The Warrant Shares are exercisable through~~ ~~January 23, 2026.~~

~~The~~ ~~second~~ ~~tranche of 212,766 Warrant Shares was vested on~~ ~~May 31, 2019.~~ ~~The amount of~~ contra revenue ~~attributed to these Warrant Shares is $730.~~

~~The~~ ~~third~~ ~~tranche of 212,953 Warrant Shares was vested on~~ ~~Feb~~ ~~29,~~~~2020.~~ ~~The amount of contra revenue attributed to these Warrant Shares is $278 after adjusting the impact of $413 towards adoption of ASU~~ ~~2019~~-08 on ~~January 01, 2020~~ ~~and $565 towards accrual till~~ ~~December 31, 2019,~~ ~~respectively using initial grant-date fair value.~~

~~The~~ ~~fourth~~ ~~tranche of 213,162 Warrant Shares was vested on~~ ~~Dec 31, 2020.~~ ~~The amount of contra revenue attributed to these Warrant Shares is $1,257 using initial grant-date fair value.~~

Asas per ASC ~~606,~~606. ~~the Company has accrued~~ ~~$161~~ ~~and $991 for~~ ~~three~~ ~~and~~ ~~nine~~ ~~months ended~~ ~~September~~ ~~30,~~~~2021,~~ ~~respectively using initial grant-date fair value.~~

The contra-revenue and equity are estimated and recorded, using the Monte Carlo pricing model, when performance completion is probable, with adjustments in each reporting period until performance is complete in conformance with ASC ~~606~~ ~~and ASC~~ ~~718~~ ~~requirements.~~

The Warrant provides for net share settlement that will reduce the number of shares issued upon exercise to reflect the net settlement of the exercise price if elected by the holders. The Warrant provides for certain adjustments that ~~may~~ be made to the exercise price and the number of shares of common stock issuable upon exercise due to customary anti-dilution provisions based on future events. Vested Warrant Shares are classified as equity instruments.

Our share-based compensation arrangements include grants of stock options, restricted stock units and deferred stock units under the ~~StarTek,~~Startek, Inc. 2008 Equity Incentive Plan and our Employee Stock Purchase Plan. The compensation expense that has been charged against income for the three ~~and~~ ~~nine~~months ended ~~September~~March 31, 2022, ~~30,~~~~2021~~was ~~$341 and $932, respectively,~~$428 and is included in selling, general and administrative ~~expenses.~~expense. As of ~~September~~March 31, 2022, ~~30,~~~~2021,~~there was ~~$1,115~~$3,590 of total unrecognized compensation expense related to non-vested stock options, which is expected to be recognized over a ~~weighted average~~weighted-average period of ~~1.66~~2.5 years.

The Company provides business process outsourcing services (“BPO”) to clients in various industries and geographical locations. Our approach is focused on providing our clients with the best possible combination of services and delivery locations to meet our clients' needs in the best and most efficient manner. Our Global Chief Executive Officer (CEO) ~~and President,~~ who has been identified as the Chief Operating Decision Maker ("CODM"), reviews financial information mainly on a geographical basis.

Our operating business model is focused on the geographies in which we operate. Our CODM reviews the performance and makes resource allocation geography-wise, hence the geographical level represents the operating segments of Startek Inc.

a) Americas
b) India and Sri Lanka
c) Malaysia
d) Middle East
e) Argentina & Peru
f) Rest of World

A single client accounted for ~~19%~~18% and ~~21%~~19% of the consolidated total net revenue during the three months ended ~~September 30, 2021~~March 31, 2022 and ~~2020,~~ ~~respectively, and 18% and 19% during the~~ ~~nine~~ ~~months ended~~ ~~September~~ ~~30,~~2021, ~~and~~ ~~2020,~~respectively.

Property, plant and equipment, net by geography based on the location of the assets are presented below:

We have operating and finance leases for service centers, corporate offices, and certain equipment. Our leases have remaining lease terms of 1 year to 10 years, some of which include options to extend the leases for up to 3-5 years, and some of which include options to terminate the leases within 1 year.

~~Maturities~~The following table reconciles the undiscounted cash flows for the Company’s finance and operating leases as ofMarch 31, 2022, to the finance and operating lease liabilities ~~were as follows:~~recorded on the Company’s balance sheet:

On February 25, 2021, the Company announced a $25 million strategic minority investment in CSS Corp. (“CSS”), a new-age IT services and technology support solutions company that harnesses the power of AI, automation, analytics, cloud, and digital to address customer needs. Through this investment, Startek acquired an indirect beneficial interest in CSS of approximately 26%, with Capital Square Partners (“CSP” or “CSP Fund”), a Singapore-based Private Equity Fund Manager, and the Company’s majority shareholder, acquiring the majority controlling stake.

The Company and CSP Alpha Holdings Pte. Ltd., a subsidiary of the Company, participated in this transaction by (i) contributing $25 million to acquire approximately 62.5%* in CSS Corp LP, and (ii) paying $5 million to CSP Management Limited to acquire certain call options. These call options to acquire a controlling stake in CSS are only exercisable by the Company during the period from August 19, 2022, to April 19, 2023, without any obligation and are currently considered to be not substantive.

The Company has assessed CSS Corp LP to be a variable interest entity (‘VIE’) and per ASC 810-10-25-44 concluded that it is not the primary beneficiary. Amongst other factors, the Company’s basis of this conclusion is that it lacks the power to direct or control any significant activities of the VIE and that the design and structure of the VIE were not specifically for the benefit of the Company. Further, CSS Corp LP’s objectives as an investment company is an extension of the investment activities of CSP Fund. The Company has accordingly, accounted for this transaction under the equity-accounted investee method of accounting in accordance with ASC 323-30-S99-1. The Company's share of profit/loss of equity-accounted investee is accounted under the “equity method” as per which the share of profit/(loss) of equity-accounted investee has been added to the cost.

The Company ~~has~~had individually immaterial investments in equity-accounted investee in Australia. It has 33.33% interest in Queensland Partnership Group Pty. Ltd and 16.67% interest in Services Queensland Partnership in Australia. The Company's share of profit/loss of equity-accounted investee, is accounted under the “equity method” as per which the share of profit of equity-accounted investee ~~has~~had been added to the cost. In 2021 the Company had realized carrying amounts related to investment in individually immaterial associates.

In the year 2004, the Company had announced the “Repurchase plan” that authorized the Company to repurchase up-to ~~USD~~$ 25 million of common stock. The program will remain in effect until the same is terminated by the Board of ~~Directors~~Director’s and will allow the Company to repurchase common stock from time to time on the open market either via block trades or privately negotiated transactions or by other means in accordance with federal securities laws, including Rule 10b5-1 programs or other means at times and in such amounts as ~~Chief Financial Officer (CFO)~~management deems appropriate and will be funded from our working capital or other financing alternatives. Repurchases will be implemented by the ~~CFO~~Chief Financial Officer consistent with the guidelines adopted by the ~~Board~~board of ~~Directors~~directors and will depend on market conditions and other factors. Pursuant to the Board of Directors (BOD) meeting held on August 26, 2021, the Board ~~restricted~~of Director’s approved the ~~CFO from exceeding~~Company to carry out a stock repurchase in line with 2004 “Repurchase plan’ up-to $ 2 million. Further in board meeting held on December 14, 2021 the Board of Director’s approved additional $2 million ~~of repurchases with any purchases more than~~ $2 ~~million requiring Board review.~~towards a stock repurchase plan.

Our stock repurchase programs are intended to programmatically offset the impact of dilution from our equity compensation programs and, subject to market conditions and other factors, to make opportunistic and programmatic repurchases of our common stock to reduce our outstanding share count. Any repurchased shares will be held as treasury stock and will be available for general corporate purposes. Our stock repurchase plan may be suspended or discontinued at any time. The actual timing, number and value of shares repurchased depends on a number of factors, including the market price of our common stock, general market and economic conditions, the shares withheld for taxes associated with the vesting of restricted stock, other corporate considerations and CFO’s determination as to the appropriate use of our cash.

During the three months ended ~~September 30, 2021,~~March 31, 2022, we repurchased an aggregate of ~~57,759~~259,407 shares of our common stock under our repurchase plan at an average cost of ~~$5.67~~$4.88 per share.

Stock repurchase activity during the three months ended ~~September~~March 31, 2022 ~~30,~~~~2021~~was as follows:

On January 17, 2022, the Company announced that the board of directors has formed a special committee of independent directors that is authorized, among other things, to evaluate the non-binding proposal, dated December 20, 2021, by CSP Management Limited (“CSP”) to acquire all outstanding shares of common stock of Startek that it does not already beneficially own for $5.40 in cash per share. The special committee has engaged legal and financial advisors to assist in its consideration of the proposal. CSP is currently the beneficial owner of approximately 56% of the outstanding common stock of Startek. The special committee has appointed Foros Securities LLC as a financial advisor in connection with private offer and the Company incurred total expenses of $500 during the quarter ended March 31, 2022 which is included in selling, general and administrative expenses.

ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

The following discussion and analysis of the results of operations and financial condition should be read in conjunction with our consolidated financial statements and related notes that appear elsewhere in this Quarterly Report on Form 10-Q and in our Annual Report on Form 10-K for the year ended December 31, ~~2020~~2021 and with the information under the heading “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in our Annual Report on Form 10-K for the year ended December 31, ~~2020.~~2021. All dollar amounts are presented in thousands other than per share data.

BUSINESS DESCRIPTION AND OVERVIEW

Startek is a leading global provider of technology-enabled business process management solutions. The Company provides Omni-channel customer experience, digital transformation, and technology services to some of the finest brands globally. Startek is committed to impacting clients’ business outcomes by focusing on enhancing customer experience and digital enablement across all touchpoints and channels. Startek has more than ~~46,000 CX experts globally spread~~43,000 employees located across 4638 delivery campuses in 13 countries. The Company services over ~~200~~190 clients across ~~various~~a range of industries such as Banking and Financial Services, ~~Insurance, Technology, Telecom, Healthcare, Travel~~insurance, technology, telecom, healthcare, travel and ~~Hospitality, Consumer Goods, Retail,~~hospitality, consumer goods, retail, and ~~Energy~~energy and ~~Utilities.~~utilities.

SIGNIFICANT DEVELOPMENTS

~~Cyber Security Incident~~

On June 30, 2021, we suffered an attempted encryption attack. While the attackers or the threat actors failed to shut down company operations, they however encrypted some of our operating systems and application servers. We took immediate steps to remedy the situation and based on the numerous steps undertaken, we believe that the incident is contained, and we have eradicated any remnants of the attack. This incident resulted in temporary disruption to our business that was caused by the threat actors encrypting some of our systems and our precautionary actions to move certain of our systems offline. The impact of this incident on our clients was varied and was dependent on the region of our service delivery. Many of our clients faced no disruptions as the network and systems in those regions weren’t compromised, however, in some regions our customers faced disruptions especially where we support work from home operations. In addition, with-in the impacted clients, many of them maintained connectivity with our network, allowing us to continue to provide service, however, some clients chose to temporarily suspend our access to their networks as a measure of abundant caution.

Since the Incident, we have (a) restored the security of our systems and networks, (b) significantly enhanced the continuous monitoring of our entire information security environment, (c) implementation various enhancements to our network and processes to prevent the recurrence of such incidents, (d) notified the incident to the various law enforcement agencies and are closely coordinating with them, and, (e) have implemented measures recommended by leading external forensics and cybersecurity experts to thwart such incidents in the future.

The incident had some impact on our revenues and operating income during the current quarter though the impact was not significant. A large part of the costs directly related to the incident have been recovered from our insurance policies. We have taken certain steps to remedy the situation and plan to make incremental investments to enhance the overall security of our information technology environment.

~~Coronavirus~~

The global outbreak of the novel coronavirus (COVID-19) was declared a pandemic by the World Health Organization and a national emergency by the U.S. government in March 2020. The pandemic has negatively impacted the global economy, disrupted global supply chains and created significant volatility and disruption of financial markets, and resulted in significant travel restrictions, mandated facility closures and shelter-in-place, and social distancing orders in numerous jurisdictions around the world. Certain of our customer engagement centers have been impacted by local government actions restricting facility access or are operating at lower capacity utilization levels. In response to COVID-19, we have prioritized our employees' safety and well-being, business continuity for our clients, and supporting the efforts of governments around the world to contain the spread of the virus. In light of our commitment to helping our clients navigate unprecedented business challenges while protecting the safety of our employees, we have taken numerous steps and will continue to take further actions, to address the COVID-19 pandemic. We have taken additional measures to ensure the safety of our employees in India who are facing a strong second wave of the Pandemic. We continue to work closely with our clients to support them as they implemented their contingency plans, helping them access our services and solutions remotely. In discussion with our clients, we continue to maintain many of our employees on a work-at-home model. The impact of COVID-19 in the nine months of fiscal 2021 was not significant on the Company. The extent of the ultimate impact of the COVID-19 pandemic on our operational and financial performance, including our ability to execute our operations within the expected parameters, will depend on future developments, including the duration and spread of the pandemic and related actions taken by the various governments to prevent disease spread, all of which remain uncertain and cannot be predicted.

~~Share Repurchase~~

During the quarter the Company undertook share repurchases under a previously announced and approved Repurchase Plan. During the quarter the Company repurchased an aggregate of 57,759 shares of our common stock under our repurchase plan at an average cost of $5.67 per share. The Company believes its liquidity position is strong and shall continue with share repurchases in the near future.None.

RESULTS OF OPERATIONS — three months ended ~~September 30,~~March 31, 2022 AND 2021 ~~AND 2020~~

Revenue

Our gross revenues for the three months ended ~~September 30, 2021~~March 31, 2022 increased by ~~6.0%~~2.3% to ~~$172,948~~$167,317 as compared to ~~$163,097~~$163,495 for the three months ended ~~September 30, 2020.~~March 31, 2021.

Our net revenue for the ~~three months~~quarter ended ~~September 30, 2021~~March 31, 2022 and ~~2020:~~2021:

	For the Three Months Ended September 30, 2021			For the Three Months Ended September 30, 2020			For the Three Months Ended March 31, 2022		For the Three Months Ended March 31, 2021
Revenues		172,948			163,097			167,317		163,495
Warrant contra revenue		(161	)		(410	)		-		(425	)
Net revenue	$	172,787		$	162,687		$	167,317	$	163,070

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~~Our~~The breakdown of our net revenues ~~adjusted for warrant contra revenue~~from various segments for the three months ended ~~September 30,~~March 31, 2022 and 2021 ~~were~~is as follows:

	Three Months Ended March 31,
	2022	2021
Americas	45,415	63,925
India and Sri Lanka	27,961	21,482
Malaysia	11,280	14,965
Middle East	58,687	43,240
Argentina and Peru	8,305	8,159
Rest of World	15,669	11,299
Total	167,317	163,070

Revenue in the Americas declined due to the termination of operations with one of our e-commerce clients and insourcing of part of the operations by a client in the media vertical. Decline is also vertical related to the covid vaccination program.

Revenue growth in India and Sri Lanka region was driven by deepening of our partnership with some of the largest digital native clients in this region. Our international operations delivered out of India also reported increase in volumes.

Revenue in Malaysia saw a decline due to the termination of the contract with the e-commerce client.

Our operation in the Middle East continues to deliver strong revenue growth at the back of scaling up of new logos won during the last year.

Our revenue in the Rest of World was higher ~~at $172,787 compared~~due to ~~$162,687 for the three months ended September 30, 2020.~~ramp up with a telecom client in South Africa and addition of new client in Australia.

The breakdown of our net revenues from various industry verticals for three months ended ~~September 30, 2021~~March 31, 2022 and 2021 is as follows:

	For the Three Months Ended September 30, 2021		For the Three Months Ended September 30, 2020		For the Three Months Ended September 30, 2021			For the Three Months Ended September 30, 2020			For the Three Months Ended March 31, 2022		For the Three Months Ended March 31, 2021			For the Three Months Ended March 31, 2022			For the Three Months Ended March 31, 2021

Verticals:
Telecom		56,676		54,834		33	%		34	%		56,051		51,674			34	%		32	%
E-commerce & Consumer		22,434		23,320		13	%		14	%		20,526		26,102			13	%		16	%
Healthcare & Education		15,315		18,774		9	%		12	%
Media & Cable		22,863		25,536		13	%		16	%		16,942		25,794			10	%		16	%
Financial & Business Services		17,161		12,208		10	%		7	%		16,695		15,450			10	%		9	%
Travel & Hospitality		12,027		15,063		7	%		9	%		13,515		10,497			8	%		6	%
Healthcare & Education												11,463		17,687			7	%		11	%
Technology, IT & Related Services		5,125		4,813		3	%		3	%		5,345		5,081			3	%		3	%
All other verticals		21,347		8,549		12	%		5	%
Other verticals												26,780		11,210			15	%		7	%
Gross revenue												167,317		163,495
Less: Warrant contra revenue												-		(425	)
Net revenue												167,317		163,070

~~The increase~~Growth in ~~revenue~~telecom vertical was driven by the growth in ~~the current quarter was due~~our South Africa-based telecom client where we are now a strategic partner for their CX services. We saw stable to ~~strong performance across certain verticals as well as geographies.~~

~~Strength in the Telecom sector continued as we witnessed growth~~higher volumes across most other telecom ~~clients across our various geographies.~~clients.

Financial & Business services ~~sector~~vertical continues to perform strongly as ~~the Pandemic overhang eases and there is increased consumption of business services.~~

~~Our~~we strengthen our partnership with key clients in ~~the Consumer sector continue to see strong demand across geographies.~~these verticals.

We ~~saw~~continue to see sequential improvement in volume in the travel and hospitality sector as ~~more geographies start easing restrictions and reopening travel~~activity in ~~a calibrated manner.~~these verticals trend to normalize to pre-COVID levels.

Decline in revenues from the Media vertical was led by change in strategy with a key client who insourced part of their CX activities on the voice platform across vendors.

A contract was terminated by one of our clients from the e-commerce vertical which led to decline in revenues from this vertical. Our other clients in ~~the media and cable sectors continue~~this vertical recorded impressive growth as we deploy customized solution to ~~post steady volumes while we selectively build traction with public sector enterprises across some of our geographies.~~them driving their CX strategy.

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Cost of ~~Services~~services and ~~Gross Profit~~gross profit

Overall, the cost of services as a percentage of revenue increased to ~~87.5%~~87.4% for the three months ended ~~September 30, 2021~~March 31, 2022 compared to ~~86.3%~~84.9% for the three months ended ~~September 30, 2020.~~March 31, 2021. Employee expenses, rent costs, and ~~Depreciation~~depreciation and amortization are the most significant costs for the Company, representing ~~75.7%~~74.3%, ~~4.7%~~3.9%, and ~~4.2%~~4.6% of the total cost of services, respectively. The breakdown of the cost of services is listed in the table ~~below~~below:

	Three Months Ended September 30,				As % of Revenue						Three Months Ended March 31,
	2021		2020		2021			2020			2022		2021
Employee benefit expenses		114,468		104,881		66.2	%		64.5	%		108,659		104,746
Rent expense		7,074		7,548		4.1	%		4.6	%		5,770		7,484
Depreciation and amortization		6,394		6,135		3.7	%		3.8	%		6,681		6,154
Other		23,328		21,828		13.5	%		13.4	%		25,150		19,999
Total	$	151,264	$	140,392							$	146,260	$	138,383

Employee expenses: Our business heavily relies on our employees to provide professional services to our clients. Thus, our most significant costs are payments made to agents, supervisors, and trainers who are directly involved in delivering services to the clients.

Employee expenses as a percentage of revenues increased to ~~66.2%~~64.9% for the current period as compared to ~~64.5%~~64.2% for the previous period. The ~~year-on-year~~ increase iswas driven by ~~growth~~wage adjustments led by inflationary pressures in ~~certain clients across the telecom, financial and business services and public sector enterprises verticals that are delivered largely onshore.~~some of our geographies.

Rent expense: Rent expense as a percentage of revenue decreased to ~~4.1%~~3.4% for the current period as compared to 4.6% for the previous period. The decrease is partially driven by ~~better utilization~~recognition of ~~our existing capacity due~~impairment charge on right-of-use assets related to ~~continued dominance of work at home business model.~~operating leases in a few geographies in December 2021.

Depreciation and amortization: Depreciation and amortization expense as a percentage of revenue for the current period was marginally ~~lower~~increased at ~~3.7%~~4.0% as compared to 3.8% for the previous period.

Other expense includes recruitment, technology, utility, travel and outsourcing costs. As a percentage of revenue, these costs increased ~~marginally~~to 15% from ~~13.4% to 13.5% primarily~~12.3%. The increase in the current period was led by investments in technology and cybersecurity infrastructure, higher insurance premium and higher outsourcing costs partly offset by lower utility and maintenance costs. The outsourcing expenses in the current quarter included a one-time expense of $4,895 due to ~~higher communication expenses which was partially offset by travel and utility costs.~~certain sub-contracting costs related to a client in the Middle East.

As a result, gross profit as a percentage of revenue for the current period decreased to ~~12.5%~~12.6% as compared to ~~13.7%~~15.1% for the previous period.

	Three Months Ended September 30,						Three Months Ended March 31,
	2021			2020			2022			2021
Gross revenue		172,948			163,097			167,317			163,495
Warrant contra revenue		(161	)		(410	)		-			(425	)
Net revenue		172,787			162,687			167,317			163,070
Cost of services		(151,264	)		(140,392	)		146,260			138,383
Gross profit	$	21,523		$	22,295		$	21,057		$	24,687
Gross margin		12.5	%		13.7	%		12.6	%		15.1	%

Selling, general and administrative expenses

Selling, general and administrative expenses (SG&A) as a percentage of revenue ~~decreased~~increased from ~~8.8%~~8.7% in the previous period to ~~7.6%~~9.5% in the current period. The ~~year-on-year decrease~~increase was led by investment in ~~percentage is driven by revenue growth in~~sales, digital and marketing functions. We are contesting certain class action suits and have taken appropriate provisions based on the current ~~period. Sequentially,~~facts of the case. The SG&A ~~expense has increased as~~also includes costs pertaining to the ~~Company invested~~advisors to the Special Committee of the Board of Directors in ~~strengthening its sales and marketing function.~~regards to the evaluation of the take private offer.

Impairment ~~Losses~~losses and ~~Restructuring/Exit Cost, Net~~restructuring/exit cost, net

Impairment losses and restructuring costs, net ~~totaled $85~~totalled $1,407 for the current period as compared to ~~$(12)~~$1,898 for the previous period. ~~There are no impairment charges~~The restructuring cost during the ~~current period.~~quarter include $1,381 towards the restructuring exercise underway in Argentina.

Interest expense, net, and other income

Interest expense, net, ~~totaled $2,236~~and other income totalled $974 for the current period as compared to ~~$3,988~~$13,769 for the previous period. The expense for the ~~three months ended September 30, 2021 comprises interest expense on our term~~previous period included $11,269 towards the refinancing of debt undertaken in February 2021. Interest and ~~revolving line~~other finance expenses during the current period was $2,645. This was partly offset by income from treasury transactions of ~~credit facilities.~~$1,504.

Income tax expense

Income tax expense for the current period was ~~$2,402~~$2,093 compared to ~~$1,649~~$4,902 for the previous period. The movement in the effective tax rate was primarily due to shifts in earnings among the various jurisdictions in which we operate coupled with utilization of net operating losses for entities having taxable profit and valuation allowance as per the requirement of ASC 740. Additionally, the movement of funds between various geographies primarily to service our debt facilities also attracts withholding taxes.

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~~RESULTS OF OPERATIONS — NINE months ended SEPTEMBER 30, 2021 and 2020~~

~~Revenue~~

~~Our gross revenues for the nine months ended September 30, 2021 increased by 12.6% to $525,879 as compared to $466,926 for the nine months ended September 30, 2020.~~

~~Our net revenue for the nine months ended September 30, 2021 and 2020:~~

For the Nine Months Ended September 30, 2021

For the Nine Months Ended September 30, 2020

Revenues
525,879 466,926
Warrant contra revenue
(991 ) (1,173 )
Net revenue
$ 524,888 $ 465,753

~~Our net revenues adjusted for warrant contra revenue for the nine months ended September 30, 2021 was higher at $524,888 compared to $465,753 for the nine months ended September 30, 2020.~~

~~The breakdown of our net revenues from various industry verticals for nine months ended September 30, 2021 and September 30, 2020 is as follows:~~

For the Nine Months Ended September 30, 2021

For the Nine Months Ended September 30, 2020

For the Nine Months Ended September 30, 2021

For the Nine Months Ended September 30, 2020

Verticals:

Telecom
161,961 160,362 31 % 34 %
E-commerce & Consumer
74,757 71,884 14 % 15 %
Healthcare & Education
73,020 44,757 14 % 10 %
Media & Cable
72,435 70,801 14 % 15 %
Financial & Business Services
48,374 36,034 9 % 8 %
Travel & Hospitality
33,066 45,028 6 % 10 %
Technology, IT & Related Services
15,064 14,310 3 % 3 %
All other verticals
47,202 23,750 9 % 5 %

The increase in revenue in the current period was due to strong performance across verticals as well as geographies. Significant part of the year-on-year increase in revenue in the current period was attributed to a government vaccine program that we delivered in the second quarter of the current period. Additionally, part of the year-on-year growth in revenue during the current period was due to the severe impact of the Pandemic in the second quarter of the year-ago period.

The Company saw higher revenues across the clients in the telecom sector. Within the e-commerce and consumer sector, we continue to see robust growth with our commerce clients across geographies while the brick-and-mortar and auto clients saw signs of revival in revenues as the Pandemic fears subsided.

While the travel and hospitality sector continue to remain under pressure from COVID-led sluggishness, local transport and logistics providers continue to benefit from social distancing norms. We witnessed signs of improvement in the travel segment in the later part of the current period as major geographies begin easing travel restrictions.

In the healthcare and education sector, the Company generated significant revenue in the current period from a program related to COVID vaccine rollout in the US that was delivered in the second quarter.

~~Our clients in the financial and business services and media and cable sectors continue to post stable volumes depicting a return to normalcy from the Pandemic impact.~~

~~Table of Contents~~

~~Cost of services~~

Overall, the cost of services as a percentage of revenue decreased to 86.5% for the nine months ended September 30, 2021 as compared to 87.8% for the nine months ended September 30, 2020. Employee expenses, rent costs, and Depreciation and amortization are the most significant costs for the Company, representing 76.0%, 4.9%, and 4.1% of the total cost of services, respectively. The breakdown of the cost of services is listed in the table below:

Nine Months Ended September 30,

As % of Revenue

2021

2020

2021

2020

Employee benefit expenses
345,349 309,849 65.8 % 66.5 %
Rent expense
22,031 23,146 4.2 % 5.0 %
Depreciation and amortization
18,709 18,670 3.6 % 4.0 %
Other
68,035 57,082 13.0 % 12.3 %
Total
$ 454,124 $ 408,747

~~Employee Benefit expenses~~: Our business heavily relies on our employees to provide professional services to our clients. Thus, our most significant costs are payments made to agents, supervisors, and trainers who are directly involved in delivering services to the clients.

Employee expenses as a percentage of revenues decreased to 65.8% for the current period as compared to 66.5% for the previous period. The decrease is driven by continuous diversification in our vertical mix towards new-age verticals like financial and business services and e-commerce.

~~Rent expense:~~ Rent expense as a percentage of revenue decreased to 4.2% for the current period as compared to 5.0% for the previous period. The year-on-year decrease in the percentage is driven by a higher revenue base in the current period relative to the year-ago period.

~~Depreciation and amortization:~~ ~~Depreciation and amortization expense as a percentage of revenue for the current period was marginally lower at 3.6% as compared to 4.0% for the previous period~~

Other expense includes recruitment, technology, utility, travel and outsourcing costs. As a percentage of revenue, these costs marginally increased from 12.3% to 13.0% primarily due to higher recruitment and insurance costs in the current period partially offset by lower travel costs.

~~As a result, gross profit as a percentage of revenue for the current period increased to 13.5% as compared to 12.2% for the previous period.~~

Nine Months Ended September 30,

2021

2020

Gross revenue
525,879 466,926
Warrant contra revenue
(991 ) (1,173 )
Net revenue
524,888 465,753
Cost of services
(454,124 ) (408,747 )
Gross profit
$ 70,764 $ 57,006
Gross margin
13.5 % 12.2 %

~~Selling, general and administrative expenses~~

Selling, general and administrative expenses (SG&A) as a percentage of revenue decreased from 9.7% in the previous period to 7.5% in the current period. The reduction is a result of operational efficiencies due to a higher revenue base in the current period.

~~Impairment Losses and Restructuring/Exit Cost, Net~~

Impairment losses and restructuring costs, net totaled $1,964 for the current period as compared to $24,545 for the previous period. The expense for the nine months ended September 30, 2021 primarily relates to employee-related restructuring expenses. There are no impairment charges during the current period.

~~Interest expense, net~~

Interest expense, net totaled $18,489 for the current period as compared to $10,683 for the previous period. The expense for the nine months ended September 30, 2021 comprises upfront fees and interest expense on our term debt and revolving line of credit facilities.

~~Income tax expense~~

Income tax expense for the current period was $9,397 compared to $5,808 for the previous period. The movement in interest cost and the implied effective tax rate was primarily due to shifts in earnings among the various jurisdictions in which we operate coupled with utilization of net operating losses for entities having taxable profit and valuation allowance as per the requirement of ASC 740. Additionally, the movement of funds between various geographies primarily to service our debt facilities also attracts withholding taxes.

~~Table of Contents~~

~~RELATED PARTY DISCLOSURE~~

In 2018, a transaction bonus was payable to Mr. Aparup Sengupta (Chairman & Global CEO) for the successful completion of the Startek-Aegis merger. This was accrued in the financial statements for the year ended December 31, 2018 as “Acquisition-related cost”. An amount of $500 has been paid during the year ended December 31, 2020 to Mr. Aparup Sengupta and a balance of $350 has been paid during the first quarter of the current fiscal year.

LIQUIDITY AND CAPITAL RESOURCES

Our primary sources of liquidity are cash flows generated by operating activities, our working capital facilities, and term debt. We have historically utilized these resources to finance our operations and make capital expenditures associated with capacity expansion, upgrades of information technologies and service offerings, and business acquisitions. Due to the timing of our collections of receivables due from our major customers, we have historically needed to draw on our working capital facilities periodically for ongoing working capital needs. We have also entered into factoring agreements with financial institutions to sell certain of our accounts receivables under non-recourse agreement. The Company expects to meet all its debt obligations including compliance with all financial covenants in a timely manner.

During the first quarter of the current fiscal year, the Company entered into a newly secured $185 million senior debt facility, comprising a $165 million term loan and a $20 million revolving credit facility. Under the new senior debt, Borrowings will bear a tiered interest rate, which is based on the Company’s consolidated net leverage ratio and is initially set at LIBOR plus 450 basis points. The term loan will have a moratorium on principal repayment for 21 months and will amortize quarterly thereafter, beginning November 2022. The loan is subject to certain standardized financial covenants. The Company fully repaid the amounts due under the old senior facilities from the proceeds of the new debt facility.

Cash and cash equivalents and restricted cash

As of ~~September 30, 2021,~~March 31, 2022, cash, cash equivalents, and restricted cash held by the Company and all its foreign subsidiaries ~~increased~~decreased by ~~$12,915~~$3,148 to ~~$63,474~~$52,248 compared to ~~$50,559~~$55,396 as of December 31, ~~2020.~~2021. The restricted cash balance as of ~~September 30, 2021~~March 31, 2022 stood at ~~$6,634~~$8,946 as compared to ~~$6,052~~$7,456 as of December 31, ~~2020.~~2021. The restricted cash pertains to the debt service reserve account (DSRA) that we have to maintain according to the Senior Term Agreement and for certain term deposits that need to be maintained in accordance with some of our lease and client agreements.

Cash flows from operating activities

For the ~~nine~~three months ended ~~September 30,~~March 31, 2022 and 2021 ~~and 2020~~ we reported net cash flows generated from operating activities of ~~$22,557~~$564 and ~~$65,445,~~$18,668, respectively. The ~~$(42,888)~~ decrease in net cash flows from operating activities was ~~due to~~driven by a net decrease of $(50,936) in cash flows from operating assets and liabilities, a $(22,756) decrease in non-cash reconciling items such as goodwill impairment, deferred tax expense, depreciation and amortization, and warrant contra revenue, and an increase of $30,804$16,921 in net income. During the current period, the cash flows from operating assets and liabilities were impacted by increased receivables due to temporary growth in revenues. The amounts were subsequently collected. The cash flows for the nine months ended September 30, 2020 was higher due to the sale of receivables under the non-recourse factoring arrangements in April 2020.
working capital.

Cash flows used in investing activities

For the ~~nine~~three months ended ~~September 30,~~March 31, 2022, and 2021, ~~and 2020~~ we reported net cash used in investing activities of ~~$41,256~~$(1,902) and ~~$9,712~~$(30,922) respectively. Net cash used in investing activities for current periods primarily ~~consisted of strategic~~towards capital expenditure while the amount for the previous period includes $25,000 towards the investment in ~~equity-accounted investees~~CSS Corp and ~~capital expenditure.~~
$3,000 towards payment of call option premium.

Cash flows ~~generated~~ from financing activities

For the ~~nine~~three months ended ~~September 30,~~March 31, 2022 and 2021 ~~and 2020~~ we reported net cash flows used in and generated from ~~and used in~~ financing activities of ~~$32,566~~$(1,774) and ~~$(31,518),~~$26,766, respectively. During the ~~nine~~three months ended ~~September 30,~~March 31, 2021 our net borrowings increased ~~by $31,461~~ mainly due to refinancing of senior term debt completed during the period. ~~The Company collected $1,434 from the vesting of warrants under the ESOP program of the Company.~~ During the three months ended ~~September 2021,~~March 2022, the Company repurchased an aggregate of ~~57,759~~259,407 shares amounting to ~~$329.~~$1,271.

Debt

For more information, refer to Note 9, "Debt," to our consolidated financial statements included in Item 1, "Financial Statements."

CONTRACTUAL OBLIGATIONS

Smaller reporting companies are not required to provide the information required by this item.

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OFF-BALANCE SHEET ARRANGEMENTS

Apart from certain non-recourse receivables factoring as mentioned in the Note 9 "Debt" of the notes to the consolidated financial statements, we have no other material off-balance sheet transactions, unconditional purchase obligations, or similar instruments, and we are not a guarantor of any other entities’ debt or other financial obligations.

VARIABILITY OF OPERATING RESULTS

We have experienced and expect to continue to experience some quarterly variations in revenue and operating results due to a variety of factors, many of which are outside our control, including: (i) timing and amount of costs incurred to expand capacity in order to provide for volume growth from existing and future clients; (ii) changes in the volume of services provided to clients; (iii) expiration or termination of client projects or contracts; (iv) timing of existing and future client product launches or service offerings; (v) seasonal and or temporary nature of certain clients’ businesses; and (vi) variability in demand for our services by our clients depending on demand for their products or services, and/or depending on our ~~performance; (vii) due to COVID- 19 pandemic.~~ performance.

CRITICAL ACCOUNTING POLICIES AND ESTIMATES

In preparing our consolidated financial statements in conformity with ~~US-GAAP,~~U.S. GAAP, management must undertake decisions that impact the reported amounts and related disclosures. Such decisions include the selection of the appropriate accounting principles to be applied and assumptions upon which accounting estimates are based. Management applies its best judgment based on its understanding and analysis of the relevant circumstances to reach these decisions. These judgments are subject to an inherent degree of uncertainty by their nature. Accordingly, actual results may vary significantly from the estimates we have applied.

Please refer to Note 2, "Summary of Significant Accounting Policies" of the Notes to the consolidated financial statements included in Item 1 for a complete description of our critical accounting policies and estimates.

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

As Startek has qualified for Smaller Reporting Company status, this disclosure is not required.

ITEM 4. CONTROLS AND PROCEDURES

Evaluation of Disclosure Controls and Procedures:

~~An evaluation~~As of the end of the period covered by this Quarterly Report on Form 10-Q, our management, with the participation of our Chief Executive Officer and Chief Financial Officer, evaluated the effectiveness of the design and operation of our disclosure controls and procedures (as defined in ~~Rules 13a15(e)~~Rule 13a-15(e) under the Securities Exchange Act of 1934, as amended (the “Exchange Act”)). We maintain disclosure controls and ~~15d-15(e)~~procedures designed to ensure that information required to be disclosed in reports filed or submitted by us under the Exchange ~~Act) as of September 30, 2021 was carried out~~Act is recorded, processed, summarized and reported within time periods specified in the SEC's rules and forms. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed by us in the reports that we file or submit under the ~~supervision~~Exchange Act is accumulated and ~~with the participation of our~~communicated to management, including our Chief Executive Officer and Chief Financial ~~Officer.~~Officer, or persons performing similar functions, as appropriate to allow timely decisions regarding required disclosure. Based ~~upon that~~on management's evaluation, our Chief Executive Officer and Chief Financial Officer concluded that ~~the design and operation of these disclosure controls and procedures were ineffective as of September 30, 2021.~~

~~Management~~’~~s Report on Internal Control over Financial Reporting:~~

At December 31, 2020, management identified a material weakness in the operation of the Company’s internal controls over revenue recognition. In view of the existence of the material weakness and based on the assessment at the quarter-end, the Chief Executive Officer and Chief Financial Officer concluded that, as of September 30, 2021, our disclosure controls and procedures were ~~ineffective. Notwithstanding~~effective at the material weakness in internal control over financial reporting relating to revenue process disclosed below, our management, including our Chief Executive Officer and Chief Financial Officer, has concluded that the consolidated financial statements presents fairly in all material respects, our financial position, resultsreasonable assurance level as of ~~operations and cash flows for the periods presented in conformity with accounting principles generally accepted in the United States.~~

A material weakness was identified in the operation of the Company’s internal financial controls over revenue recognition (and corresponding “unbilled revenue” asset) in certain reporting units. It was observed that for few customers the amount of revenue accrued in the books of accounts was on the lower side than what was billed to those customers. Management carried out measurement adjustments in respect of discounts, penalties, etc to revenue recognised in the books of account as the COVID 19 situation gave rise to uncertainties. However, these judgements were not adequately documented.

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

The material weakness described above did not result in any material misstatements to the company’s previously issued consolidated financial statements, nor in the consolidated financial statements disclosed in this Form 10-Q.

~~Remediation Plan:~~

The Company’s management is committed to maintaining a strong internal control environment. In response to the identified material weakness, the management immediately performed a detailed root-cause analysis of the highlighted issues and implemented certain corrective actions. The management has redefined the revenue recognition process combining automation and manual controls wherever appropriate. Documentation underlying key judgments is enhanced and “review” controls are further strengthened to reflect appropriate accounting treatment. While the management has completed the implementation of the corrective actions, it will also monitor the effectiveness of the controls through continuous monitoringMarch 31, 2022.

Changes in Internal Control over Financial Reporting:

~~Subject to the above, there were~~There have been no changes in ~~our~~the Company's internal control over financial reporting ~~that occurred~~ during the quarter ended ~~September 30, 2021,~~March 31, 2022 that have materially affected, or are reasonably likely to materially affect, ~~our~~the Company's internal control over financial reporting.

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PART II - OTHER INFORMATION

ITEM 1. LEGAL PROCEEDING

None.

ITEM 1A. RISK FACTORS

There have been no material changes to the risk factors disclosed in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, ~~2020, except for the following:~~

~~Cyber Security Threat~~

In order to provide our services and solutions, we depend on global information technology networks and systems, including those of third parties, to process, transmit, host, and securely store electronic information (including our confidential information and the confidential information of our clients) and to communicate among our locations around the world and with our clients, suppliers and partners. Security breaches, employee malfeasance, or human or technological error create risks of shutdowns or disruptions of our operations and potential unauthorized access and/or disclosure of our or our clients’ sensitive data, which in turn could jeopardize our client deliveries that are critical to our operations or the operations of our clients’ businesses and have other adverse impacts on our business.

A security compromise of our information systems, such as the security incident that occurred in June 2021, or of those of businesses with whom we interact, that results in confidential information being accessed by unauthorized or improper persons, could harm our reputation and expose us to regulatory actions, client attrition due to reputational concerns or otherwise, containment and remediation expenses, and claims brought by our clients or others for breaching contractual confidentiality and security provisions or data protection laws. Monetary damages imposed on us could be significant and may impose costs in excess of insurance policy limits or not covered by our insurance at all. Techniques used by bad actors to obtain unauthorized access, disable or degrade service, or sabotage systems evolve frequently and may not immediately produce signs of intrusion, and we may be unable to anticipate these techniques or to implement adequate preventative measures. In addition, a security breach could require that we expend substantial additional resources related to the security of our information systems, diverting resources from other projects and disrupting our businesses. Any remediation measures that we have taken or that we may undertake in the future in response to the security incident that occurred in June 2021 or other security incidents may be insufficient to prevent future cyber incidents.

We are required to comply with increasingly complex and changing data security and privacy regulations in the United States, Australia, India, Japan, Korea, and in other jurisdictions in which we operate, that regulate the collection, use and transfer of personal data, including the transfer of personal data between or among countries. In the United States, there have been proposals for federal privacy legislation and many new state privacy laws are on the horizon. Recently enacted legislation, such as the California Consumer Privacy Act, impose extensive privacy requirements on organizations governing personal information. Existing US laws related to particular types of data, such as the Health Insurance Portability and Accountability Act, also impose extensive privacy and security requirements on organizations operating in the healthcare industry, which Startek serves. Additionally, in India, the Personal Data Protection Bill, 2018 was recently cleared for introduction in the current session of the Indian Parliament. If enacted in its current form it would impose stringent obligations on the handling of personal data, including certain localization requirements for sensitive data. Other countries have enacted or are considering enacting data localization laws that require certain data to stay within their borders.

We may also face audits or investigations by one or more domestic or foreign government agencies or our clients pursuant to our contractual obligations relating to our compliance with these regulations. Complying with changing regulatory requirements requires us to incur substantial costs, exposes us to potential regulatory action or litigation, and may require changes to our business practices in certain jurisdictions, any of which could materially or adversely affect our business operations and operating results.

~~The recent Coronavirus or COVID-19 outbreak continues to expand and may adversely affect our financial condition and results of operations for~~ 2021.

The recent government-imposed restrictions around the world have significantly impacted businesses and their workforces. Most of the geographies in which we operate have been affected by local lockdowns or restrictions on facilities access. Other geographies may be impacted as the coronavirus/COVID-19 spreads and/or existing restrictions may be extended/strengthened. At this point, it is impossible to predict the degree to which supply and demand for our outsourcing services will be affected and the duration of such impact. This uncertainty makes it challenging for management to estimate the future performance of our businesses. However, the impact of COVID-19 will have an adverse impact on our results of operations over the near to medium term.

Given the overall uncertainty and fluidity of the current global pandemic response, coupled with how various government-imposed limitations may translate into client service delivery constraints, the Company may identify additional risk factors going forward which will be provided in the Quarterly Report.

ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

In the year 2004, the Company had announced the “Repurchase plan” that authorized the Company to repurchase up-to ~~USD 25~~$25 million of common stock. The program will remain in effect until the same is terminated by the Board of Directors and will allow the Company to repurchase common stock from time to time on the open market either via block trades or privately negotiated transactions or by other means in accordance with federal securities laws, including Rule 10b5-1 programs or other means at times and in such amounts as management deems appropriate and will be funded from our working capital or other financing alternatives. Repurchases will be implemented by the Chief Financial Officer (CFO) consistent with the guidelines adopted by the Board of Directors and will depend on market conditions and other factors. Pursuant to the Board of Directors meeting held on August 26, 2021, the Board restricted the CFO from exceeding $2 million of repurchases with any purchases more than $2 million requiring Board review. Further in board meeting held on December 14, 2021 the Board of Director’s approved additional $2 million towards a stock repurchase plan.

During the three months ended ~~September 30, 2021,~~March 31, 2022, we repurchased an aggregate of ~~57,759~~259,407 shares of our common stock under our repurchase plan at an average cost of ~~$5.67~~$4.88 per share.

~~Stock repurchase activity~~ Additional information regarding the Company’s repurchases of common stock during the three months ended ~~September 30, 2021 was as follows:~~

Period Ended

Total Number of Shares Purchased

Average Price Paid per Share (1)

Total Number of Shares Purchased as Part of Publicly Announced Programs

Maximum Dollar Value that May Yet be Purchased Under the Programs

August 31, 2021
15,943 $ 6.06 15,943 $ 24,903,328
September 30, 2021
41,816 $ 5.49 41,816 $ 24,672,449
57,759 57,759

~~1. Excludes broker commission.~~March 31, 2022 is set forth in Note 15 to the accompanying consolidated financial statements which is incorporated by reference into this Item 2.

ITEM 3. DEFAULTS UPON SENIOR SECURITIES

None.

ITEM 4. MINE SAFETY DISCLOSURE

Not applicable.

ITEM 5. OTHER INFORMATION

None.

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ITEM 6. EXHIBITS

INDEX OF EXHIBITS

~~Exhibit~~

~~Incorporated Herein by Reference~~

~~No.~~

~~Exhibit Description~~

~~Exhibit~~

~~Filing Date~~

31.1*

~~Certification of Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002~~

31.2*

~~Certification of Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002~~

32.1*

~~Written Statement of the Chief Executive Officer and Chief Financial Officer furnished pursuant to Section 906 of the Sarbanes-Oxley Act of 2002~~

101*

The following materials are formatted in Extensible Business Reporting Language (Inline XBRL): (i) Consolidated Statements of Operations and Comprehensive Income (Loss) for the Three and Nine Months Ended September 30, 2021 and 2020(Unaudited), (ii) Consolidated Balance Sheets as of September 30, 2021 (Unaudited) and December 31, 2020, (iii) Consolidated Statements of Cash Flows for the Nine Months Ended September 30, 2021 and 2020 (Unaudited) and (iv) Notes to Consolidated Financial Statements (Unaudited)

~~104~~

~~Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101)~~

Exhibit

Incorporated Herein by Reference

No.

Exhibit Description

Exhibit

Filing Date

10.1

Employment Agreement with Bharat Rao dated January 27, 2022

8-K

10.1

2/1/2022

10.2

Letter Agreement with Nishit Shah dated February 1, 2022

8-K

10.1

2/16/2022

31.1*

Certification of Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

31.2*

Certification of Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

32.1*

Written Statement of the Chief Executive Officer and Chief Financial Officer furnished pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

101*

The following materials are formatted in Extensible Business Reporting Language (Inline XBRL): (i) Consolidated Statements of Operations and Comprehensive Income (Loss) for the Three Months Ended March 31, 2022 and 2021(Unaudited), (ii) Consolidated Balance Sheets as of March 31, 2022 (Unaudited) and December 31, 2021, (iii) Consolidated Statements of Cash Flows for the Three Months Ended March 31, 2022 and 2021 (Unaudited) and (iv) Notes to Consolidated Financial Statements (Unaudited)

104

Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101)

Filed with this Form 10-Q.

Table of Contents

SIGNATURES

Pursuant to the requirements of Securities Exchange Act of 1934, the registrant has duly caused this Form 10-Q to be signed on its behalf by the undersigned thereunto duly authorized.


STARTEK, INC.


By:	/s/ ~~Aparup Sengupta~~Bharat Rao	Date: ~~November 2, 2021~~May 9, 2022
	~~Aparup Sengupta~~Bharat Rao
	~~Global CEO~~Chief Executive Officer
	~~(principal executive officer)~~


By:	/s/ ~~Vikash Sureka~~Nishit Shah	Date: ~~November 2, 2021~~May 9, 2022
	~~Vikash Sureka~~Nishit Shah
	Chief Financial Officer
	~~(principal financial and accounting officer)~~

Delaware	84-1370538
(State or other jurisdiction of	(I.R.S. employer
incorporation or organization)	Identification No.)

~~6200~~4610 South ~~Syracuse Way~~~~, Suite 485~~Ulster Street,
~~Greenwood Village,~~Suite 150, Denver, Colorado	~~80111~~80237
(Address of principal executive offices)	(Zip code)

Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Common Stock, $0.01 par value	SRT	New York Stock Exchange, Inc.

Large accelerated filer ☐	Accelerated filer ☒
Non-accelerated filer ☐	Smaller reporting company ☒
	Emerging growth company ☐

	*Three Months Ended September 30,*						*Nine Months Ended September 30,*
	*2021*			*2020*			*2021*			*2020*
Revenue		172,948			163,097			525,879			466,926
Warrant contra revenue		(161	)		(410	)		(991	)		(1,173	)
Net revenue	$	172,787		$	162,687		$	524,888		$	465,753
Cost of services		(151,264	)		(140,392	)		(454,124	)		(408,747	)
Gross profit	$	21,523		$	22,295		$	70,764		$	57,006

Selling, general and administrative expenses		(13,099	)		(14,292	)		(39,568	)		(45,030	)
Impairment losses and restructuring/exit cost		(85	)		12			(1,964	)		(24,545	)
Operating income/ (loss)	$	8,339		$	8,015		$	29,232		$	(12,569	)

Share of loss of equity-accounted investees		(46	)		(5	)		(1	)		(25	)
Interest expense, net		(2,236	)		(3,988	)		(18,489	)		(10,683	)
Exchange gain / (loss), net		(533	)		(621	)		42			(331	)
Income/ (loss) before income taxes	$	5,524		$	3,401		$	10,784		$	(23,609	)
Income tax expense		(2,402	)		(1,649	)		(9,397	)		(5,808	)
Net income/ (loss)	$	3,122		$	1,752		$	1,387		$	(29,417	)

Net income/ (loss)
Net income attributable to non-controlling interests		3,046			1,385			6,581			1,990
Net income/ (loss) attributable to Startek shareholders		76			367			(5,194	)		(31,407	)

Net income/ (loss) per common share - basic	$	0.00		$	0.01		$	(0.13	)	$	(0.80	)
Net income/ (loss) per common share - diluted	$	0.00		$	0.01		$	(0.13	)	$	(0.80	)

Weighted average common shares outstanding - basic		40,788			40,275			40,723			39,143
Weighted average common shares outstanding - diluted		41,094			40,626			41,171			39,143

	*Three Months Ended March 31,*
	*2022*			*2021*
Revenue		167,317			163,495
Warrant adjustment		0			(425	)
Net revenue	$	167,317		$	163,070
Cost of services		(146,260	)		(138,383	)
Gross profit	$	21,057		$	24,687

Selling, general and administrative expenses		(15,881	)		(14,171	)
Impairment losses and restructuring/exit cost		(1,407	)		(1,898	)
Operating income	$	3,769		$	8,618

Share of loss of equity-accounted investees		(8	)		(14	)
Interest expense, net and other income		(974	)		(13,769	)
Foreign exchange gains (losses), net		(408	)		212
Income (loss) before tax expense	$	2,379		$	(4,953	)
Tax expenses		(2,093	)		(4,902	)
Net income (loss)	$	286		$	(9,855	)

Net income (loss)
Net income attributable to noncontrolling interests	$	1,529		$	2,300
Net loss attributable to Startek shareholders	$	(1,243	)	$	(12,155	)

Net loss per common share
Basic net loss attributable to Startek shareholders	$	(0.03	)	$	(0.30	)
Diluted net loss attributable to Startek shareholders	$	(0.03	)	$	(0.30	)

Weighted average common shares outstanding
Basic		40,338			40,592
Diluted		40,338			40,592

PART I - FINANCIAL INFORMATION

ITEM 1.	FINANCIAL STATEMENTS	Page
	Consolidated Statement of Income (Loss) and Other Comprehensive Income (Loss) for the Three ~~and Nine~~ Months Ended ~~September 30,~~March 31, 2022 and 2021 ~~and 2020~~ (Unaudited)	4
	Consolidated Balance Sheets as of ~~September 30, 2021(Unaudited)~~March 31, 2022(Unaudited) and December 31, ~~2020~~2021	5
	Consolidated Statement of Cash Flows for the ~~Nine~~Three Months Ended ~~September 30,~~March 31, 2022 and 2021 ~~and 2020~~ (Unaudited)	6
	Consolidated Statement of Stockholders' Equity for the Three ~~and Nine~~ Months Ended ~~September 30,~~March 31, 2022 and 2021 ~~and 2020~~ (Unaudited)	7
	Note 1 Overview and Basis of Preparation	8
	Note 2 Summary of Significant Accounting Policies	9
	Note 3 Goodwill and Intangible Assets	12
	Note 4 Revenue	13
	Note 5 Net Income / (Loss) Per Share	15
	Note 6 Impairment Losses and Restructuring / Exit cost	15
	Note 7 Derivative Instruments	16
	Note 8 Fair Value Measurements	17
	Note 9 Debt	18
	Note 10 Share-Based Compensation	20
	Note 11 Accumulated Other Comprehensive Loss	21
	Note 12 Segment Reporting	22
	Note 13 Leases	23
	Note 14 Investment in Equity-Accounted Investees	24
	Note 15 Common Stock	25
	Note 16 Private Offer Transaction Cost	26
	Note 17 Subsequent Events	26
ITEM 2.	Management's Discussion and Analysis of Financial Condition and Results of Operations	27
ITEM 3.	Quantitative and Qualitative Disclosures About Market Risk	3331
ITEM 4.	Controls and Procedures	3331

PART II - OTHER INFORMATION

ITEM 1.	Legal proceeding	3432
ITEM 1A.	Risk Factors	3432
ITEM 2.	Unregistered sales of equity securities and use of proceeds	3432
ITEM 3.	Defaults upon senior securities	3432
ITEM 4.	Mine safety disclosure	3432
ITEM 5.	Other Information	3432
ITEM 6.	Exhibits	3533
SIGNATURES		3634

	*September 30,*			*December 31,*			*March 31,*			*December 31,*
	*2021*			*2020*			*2022*			*2021*
Assets
Current assets
Cash and cash equivalents		56,840			44,507			43,302			47,940
Restricted cash		6,634			6,052			8,946			7,456
Trade accounts receivables, net		68,504			83,560			85,542			106,937
Unbilled revenue		62,066			49,779			67,266			50,074
Prepaid and other current assets		13,928			14,542			17,720			12,611
Total current assets	$	207,972		$	198,440		$	222,776		$	225,018

Non-current assets
Property, plant and equipment, net		35,228			34,225			32,332			34,168
Operating lease right-of-use assets		56,775			69,376			59,299			63,012
Intangible assets, net		92,695			100,440			87,531			90,092
Goodwill		183,397			183,397			183,397			183,397
Investment in equity-accounted investees		25,006			111			31,680			31,688
Deferred tax assets, net		3,273			5,294			4,731			3,664
Prepaid expenses and other non-current assets		15,482			13,370			10,805			11,436
Total non-current assets	$	411,856		$	406,213		$	409,775		$	417,457
Total assets		619,828		$	604,653		$	632,551		$	642,475

Liabilities and Shareholders' Equity
Current liabilities
Trade accounts payables		6,351			20,074			8,169			11,916
Accrued expenses		57,193			57,118			53,706			53,203
Short term debt		3,929			15,505			3,535			3,611
Current maturity of long term debt		2,217			2,180			10,216			6,241
Current maturity of operating lease obligation		17,825			19,327
Current maturity of operating lease liabilities								24,052			24,393
Other current liabilities		43,801			39,987			44,236			48,265
Total current liabilities	$	131,316		$	154,191		$	143,914		$	147,629

Non-current liabilities
Long term debt		164,240			118,315			155,771			160,175
Operating lease liabilities		41,176			52,052			40,745			44,263
Other non-current liabilities		17,412			15,498			21,563			19,562
Deferred tax liabilities, net		17,616			17,715			18,244			17,526
Total non-current liabilities	$	240,444		$	203,580		$	236,323		$	241,526
Total liabilities	$	371,760		$	357,771		$	380,237		$	389,155

Stockholders’ equity:
Common stock, 60,000,000 non-convertible shares, $0.01 par value, authorized; 40,859,738 and 40,453,462 shares issued and outstanding at September 30, 2021 and December 31, 2020, respectively		409			405
Common stock, 60,000,000 non-convertible shares, $0.01 par value, authorized; 40,953,221 and 40,893,396 shares issued as of March 31, 2022, and December 31, 2021, respectively								410			409
Additional paid-in capital		292,053			288,700			292,104			291,537
Accumulated deficit		(90,737	)		(85,543	)		(85,286	)		(84,043	)
Treasury stock, 57,759 shares and nil shares at September 30, 2021 and December 31, 2020, respectively, at cost		(329	)		0
Treasury stock, 672,176 and 412,769 shares as of March 31, 2022, and December 31, 2021, respectively, at cost								(3,183	)		(1,912	)
Accumulated other comprehensive loss		(10,072	)		(7,286	)		(10,621	)		(10,687	)
Equity attributable to Startek shareholders	$	191,324		$	196,276		$	193,424		$	195,304
Non-controlling interests		56,744			50,606			58,890			58,016
Total stockholders’ equity	$	248,068		$	246,882		$	252,314		$	253,320
Total liabilities and stockholders’ equity	$	619,828		$	604,653		$	632,551		$	642,475

	*Common Stock*				*Treasury Stock*										*Other Items of OCI*																		*Common Stock*				*Treasury Stock*										*Other Items of OCI*
	*Shares*		*Amount*		*Shares*		*Amount*			*Additional paid-in capital*		*Accumulated deficit*			*Foreign currency translation*			*Change in fair value of derivative instruments*			*Unrecognised pension cost*			*Equity attributable to Startek shareholders*			*Non-controlling interest*			*Total stockholders' equity*			*Shares*		*Amount*		*Shares*		*Amount*			*Additional paid-in capital*		*Accumulated deficit*			*Foreign currency translation*			*Change in fair value of derivative instruments*			*Unrecognised pension cost*			*Equity attributable to Startek shareholders*			*Non-controlling interest*			*Total stockholders' equity*
Three months ended
Balance at June 30, 2021		40,796,179	$	408		0	$	0		$	291,401	$	(90,813	)	$	(6,497	)	$	0		$	(3,101	)	$	191,398		$	54,072		$	245,470
Balance at December 31, 2021																																		40,893,396	$	409		412,769	$	(1,912	)	$	291,537	$	(84,043	)	$	(6,816	)	$	0		$	(3,871	)	$	195,304		$	58,016		$	253,320
Issuance of common stock		63,559		1		0		0			150		0			0			0			0			151			0			151			59,825		1		0		0			139		0			0			0			0			140			0			140
Share-based compensation expenses		-		0		-		0			341		0			0			0			0			341			0			341			-		0		-		0			428		0			0			0			0			428			0			428
Warrant expenses		-		0		-		0			161		0			0			0			0			161			0			161
Net income (loss)		-		0		-		0			0		76			0			0			0			76			3,046			3,122			-		0		-		0			0		(1,243	)		0			0			0			(1,243	)		1,529			286
Other comprehensive loss for the period		-		0		-		0			0		0			(179	)		0			(295	)		(474	)		(374	)		(848	)
Other comprehensive income (loss)																																		-		0		-		0			0		0			548			0			(482	)		66			(655	)		(589	)
Repurchase of common stock		0		0		57,759		(329	)		0		0			0			0			0			(329	)		0			(329	)		0		0		259,407		(1,271	)		0		0			0			0			0			(1,271	)		0			(1,271	)
Balance at September 30, 2021		40,859,738	$	409		57,759	$	(329	)	$	292,053	$	(90,737	)	$	(6,676	)	$	0		$	(3,396	)	$	191,324		$	56,744		$	248,068
Balance at March 31, 2022																																		40,953,221	$	410		672,176	$	(3,183	)	$	292,104	$	(85,286	)	$	(6,268	)	$	0		$	(4,353	)	$	193,424		$	58,890		$	252,314

Balance at June 30, 2020		40,210,299	$	401		0	$	0		$	286,205	$	(78,332	)	$	(8,233	)	$	(205	)	$	(2,935	)	$	196,901		$	45,720		$	242,621
Issuance of common stock		78,154		2		0		0			368		0			0			0			0			370			0			370
Share-based compensation expenses		-		0		-		0			238		0			0			0			0			238			0			238
Warrant expenses		-		0		-		0			410		0			0			0			0			410			0			410
Net income (loss)		-		0		-		0			0		367			0			0			0			367			1,385			1,752
Other comprehensive loss for the period		-		0		-		0			0		0			936			103			361			1,400			413			1,813
Balance at September 30, 2020		40,288,453	$	403		0	$	0		$	287,221	$	(77,965	)	$	(7,297	)	$	(102	)	$	(2,574	)	$	199,686		$	47,518		$	247,204

Nine months ended
Balance at December 31, 2020		40,453,462	$	405		0	$	0		$	288,700	$	(85,543	)	$	(4,529	)	$	(8	)	$	(2,749	)	$	196,276		$	50,606		$	246,882			40,453,462	$	405		0	$	0		$	288,700	$	(85,543	)	$	(4,529	)	$	(8	)	$	(2,749	)	$	196,276		$	50,606		$	246,882
Issuance of common stock		406,276		4		0		0			1,430		0			0			0			0			1,434			0			1,434			328,342		3		0		0			1,241		0			0			0			0			1,244			0			1,244
Share-based compensation expenses		-		0		-		0			932		0			0			0			0			932			0			932			-		0		-		0			280		0			0			0			0			280			0			280
Warrant expenses		-		0		-		0			991		0			0			0			0			991			0			991			-		0		-		0			425		0			0			0			0			425			0			425
Net income (loss)		-		0		-		0			0		(5,194	)		0			0			0			(5,194	)		6,581			1,387			-		0		-		0			0		(12,155	)		0			0			0			(12,155	)		2,300			(9,855	)
Other comprehensive loss for the period		-		0		-		0			0		0			(2,147	)		8			(647	)		(2,786	)		(443	)		(3,229	)		-		0		-		0			0		0			(1,092	)		8			(315	)		(1,399	)		(69	)		(1,468	)
Repurchase of common stock		0		0		57,759	$	(329	)		0		0			0			0			0			(329	)		0			(329	)
Balance at September 30, 2021		40,859,738	$	409		57,759	$	(329	)	$	292,053	$	(90,737	)	$	(6,676	)	$	0		$	(3,396	)	$	191,324		$	56,744		$	248,068

Balance at December 31, 2019		38,525,636	$	385		0	$	0		$	276,827	$	(46,145	)	$	(4,568	)	$	475		$	(1,929	)	$	225,045		$	46,739		$	271,784
Transition period adjustment pursuant to ASU 2019-08		-		0		-		0			413		(413	)		0			0			0			0			0			0
Issuance of common stock		1,762,817		18		0		0			8,361		0			0			0			0			8,379			0			8,379
Share-based compensation expenses		-		0		-		0			447		0			0			0			0			447			0			447
Warrant expenses		-		0		-		0			1,173		0			0			0			0			1,173			0			1,173
Net income (loss)		-		0		-		0			0		(31,407	)		0			0			0			(31,407	)		1,990			(29,417	)
Other comprehensive loss for the period		-		0		-		0			0		0			(2,729	)		(577	)		(645	)		(3,951	)		(1,211	)		(5,162	)
Balance at September 30, 2020		40,288,453	$	403		0	$	0		$	287,221	$	(77,965	)	$	(7,297	)	$	(102	)	$	(2,574	)	$	199,686		$	47,518		$	247,204
Balance at March 31, 2021																																		40,781,804	$	408		0	$	0		$	290,646	$	(97,698	)	$	(5,621	)	$	0		$	(3,064	)	$	184,671		$	52,837		$	237,508

Reporting Units	*September 30, 2021*		*December 31, 2020*		*March 31, 2022*		*December 31, 2021*
Americas		64,315		64,315		64,315		64,315
India		12,554		12,554		12,554		12,554
Malaysia		47,543		47,543		47,543		47,543
Saudi Arabia		54,840		54,840		54,840		54,840
Australia		4,145		4,145		4,145		4,145
Total	$	183,397	$	183,397	$	183,397	$	183,397

	*As of September 30, 2021*								*As of March 31, 2022*
	*Gross Intangibles*		*Accumulated Amortization*		*Net Intangibles*		*Weighted Average Amortization Period (years)*		*Gross Intangibles*		*Accumulated Amortization*		*Net Intangibles*		*Weighted Average Amortization Period (years)*
Customer relationships		66,220		20,479		45,741		6.5		66,220		23,273		42,947		6.5
Brand		49,500		14,150		35,350		7.1		49,500		15,978		33,522		7.1
Trademarks		13,210		2,816		10,394		7.5		13,210		3,256		9,954		7.5
Other intangibles		2,130		920		1,210		4.9		2,130		1,022		1,108		4.9
	$	131,060	$	38,365	$	92,695			$	131,060	$	43,529	$	87,531

	*As of December 31, 2020*								*As of December 31, 2021*
	*Gross Intangibles*		*Accumulated Amortization*		*Net Intangibles*		*Weighted Average Amortization Period (years)*		*Gross Intangibles*		*Accumulated Amortization*		*Net Intangibles*		*Weighted Average Amortization Period (years)*
Customer relationships		66,220		16,289		49,931		6.5		66,220		21,887		44,333		6.5
Brand		49,500		11,408		38,092		7.1		49,500		15,074		34,426		7.1
Trademarks		13,210		2,155		11,055		7.5		13,210		3,036		10,174		7.5
Other intangibles		2,130		768		1,362		4.9		2,130		971		1,159		4.9
	$	131,060	$	30,620	$	100,440			$	131,060	$	40,968	$	90,092

Years ending December 31,	*Amount*		*Amount*
Remainder of 2021		2,602
2022		10,350
Remainder of 2022				7,762
2023		10,306		10,306
2024		10,252		10,252
2025		10,252		10,252
2026				9,490
Thereafter		48,933		39,469

	*Employee related*			*Facilities related*			*Total*			*Employee related*			*Facilities related*			*Total*
Balance as of December 31, 2020		0			25			25
Balance as of December 31, 2021											480			155			635
Accruals/(reversals)		1,926			38			1,964			1,232			175			1,407
Payments		(1,868	)		(63	)		(1,931	)		(1,160	)		(266	)		(1,426	)
Balance as of September 30, 2021	$	58		$	0		$	58
Balance as of March 31, 2022										$	552		$	64		$	616

	*Gain (Loss) Recognized in AOCI, net of tax*		*Gain (Loss) Recognized in AOCI, net of tax*			*Gain/ (Loss) Reclassified from AOCI into Income*		*Gain/ (Loss) Reclassified from AOCI into Income*			Gain (Loss) Recognized in AOCI, net of tax		Gain (Loss) Recognized in AOCI, net of tax		Gain (loss) reclassified from AOCI into Income		Gain (loss) reclassified from AOCI into Income
	*Nine Months Ended September 30, 2021*		*Nine Months Ended September 30, 2020*			*Nine Months Ended September 30, 2021*		*Nine Months Ended September 30, 2020*			*Three Months Ended March 31, 2022*		*Three Months Ended March 31, 2021*		*Three Months Ended March 31, 2022*		*Three Months Ended March 31, 2021*
Cash flow hedges:
Foreign exchange contracts	$	0	$	(434	)	$	0	$	(143	)	$	0	$	0	$	0	$	8

Derivatives not designated under ASC 815	*For the Three Months Ended September 30, 2021*		*For the Three Months Ended September 30, 2020*			*For the Nine months ended September 30, 2021*		*For the Nine Months Ended September 30, 2020*
Foreign currency forward contracts	$	0	$	(578	)	$	0	$	(110	)
Interest rate swap	$	0	$	(2	)	$	0	$	(424	)

Years	*Amount*		*Amount*
Remainder of 2021		0
2022		4,125
Remainder of 2022				4,125
2023		22,688		22,688
2024		30,937		30,937
2025		57,750		57,750
2026		49,500		49,500
Total	$	165,000	$	165,000

	*Foreign Currency Translation Adjustment*			*Derivatives Accounted for as Cash Flow Hedges*			*Defined Benefit Plan*			*Equity attributable to Startek shareholders*			*Non-controlling interests*			*Total*			*Foreign Currency Translation Adjustment*			*Defined Benefit Plan*			*Equity attributable to Startek shareholders*			*Non-controlling interests*			*Total*
Balance at December 31, 2020		(4,529	)		(8	)		(2,749	)		(7,286	)		(3,071	)		(10,357	)
Balance at December 31, 2021																				(6,816	)		(3,871	)		(10,687	)		(3,887	)		(14,574	)
Foreign currency translation		(2,147	)		0			0			(2,147	)		0			(2,147	)		548			0			548			0			548
Reclassification to operations		0			8			0			8			0			8			0			0			0			0			0
Pension remeasurement		0			0			(647	)		(647	)		(443	)		(1,090	)		0			(482	)		(482	)		(655	)		(1,137	)
Balance at September 30, 2021	$	(6,676	)	$	0		$	(3,396	)	$	(10,072	)	$	(3,514	)	$	(13,586	)
Balance at March 31, 2022																			$	(6,268	)	$	(4,353	)	$	(10,621	)	$	(4,542	)	$	(15,163	)

	*Three Months Ended*				*Nine Months Ended*				*Three Months Ended*
	*September 30,*				*September 30,*				*March 31,*
	*2021*		*2020*		*2021*		*2020*		*2022*		*2021*
Revenue:
Americas		54,743		64,597		203,348		191,244		45,415		63,925
India & Sri Lanka		29,471		19,821		75,032		60,771		27,961		21,482
Malaysia		12,721		13,933		41,502		37,835		11,280		14,965
Middle East		54,829		43,665		143,783		114,425		58,687		43,240
Argentina & Peru		9,758		9,312		27,060		28,517		8,305		8,159
Rest of World		11,265		11,359		34,163		32,961		15,669		11,299
Total	$	172,787	$	162,687	$	524,888	$	465,753	$	167,317	$	163,070

	*As on*		*As on*		*As of*		*As of*
	*September 30, 2021*		*December 31, 2020*		*March 31, 2022*		*December 31, 2021*
Property, plant and equipment, net:
Americas		11,999		14,455		10,275		11,335
India & Sri Lanka		9,101		8,069		9,132		8,712
Malaysia		3,106		3,749		2,799		2,818
Middle East		7,025		4,736		6,246		7,461
Argentina & Peru		1,604		1,257		1,292		1,453
Rest of World		2,393		1,959		2,588		2,389
Total	$	35,228	$	34,225	$	32,332	$	34,168

	*Three Months Ended September 30, 2021*		*Three Months Ended September 30, 2020*		*Nine Months Ended September 30, 2021*		*Nine Months Ended September 30, 2020*		*Three Months Ended March 31, 2022*		*Three Months Ended March 31, 2021*

Operating lease cost	$	6,022	$	6,920	$	19,310	$	21,290	$	5,863	$	6,809

Finance lease cost:
Amortization of right-of-use assets		207		166		546		834		143		185
Interest on lease liabilities		13		18		45		92		60		17
Total finance lease cost	$	220	$	184	$	591	$	926	$	203	$	202

Weighted average remaining lease term	*As of September 30, 2021*			*As of December 31, 2020*			*As of March 31, 2022*			*As of December 31, 2021*
Operating leases (in years)		3.68			4.18		3.42 years			3.58 years
Finance leases (in years)		0.17			0.92		0.00 years			0.00 years

Weighted average discount rate
Operating leases		7.0	%		6.9	%		6.9	%		6.8	%
Finance leases		6.0	%		6.0	%		0.0	%		0.0	%

	*Operating Leases*			*Finance Leases*			*Operating Leases*			*Finance Leases*
Year ending December 31,
Remainder of 2021		5,619			145
2022		17,777			441
Remainder of 2022								19,266			304
2023		14,616			0			21,390			0
2024		12,433			0			17,274			0
2025		6,129			0			9,546			0
2026								2,846			0
Thereafter		3,378			0			2,101			0
Total lease payments		59,952			586			72,423			304
Less imputed interest		(951	)		(27	)		(7,626	)		(5	)
Total	$	59,001		$	559		$	64,797		$	299

	*% of ownership interest*						*Carrying amount*				*% of ownership interest*						*Carrying amount*
Name of entity	*September 30, 2021*			*December 31, 2020*			*September 30, 2021*		*December 31, 2020*		*March 31, 2022*			*December 31, 2021*			*March 31, 2022*		*December 31, 2021*
a) CSS Corp LP		61.35	%		0	%		25,006		-		61.35	%		61.35	%		31,680		31,688
b) Immaterial associates								-		111								-		0
Carrying amount of investment in equity-accounted investees								25,006		111								31,680		31,688

		*Three months ended March 31, 2022*				*Three months ended March 31, 2021*
Aggregate amounts of the group’s share of profit/ (loss) of equity-accounted investees			(8	)			(14	)

Summarised financial position	*September 30, 2021*			*December 31, 2020*
Current assets		55			0
Non-current assets		40,772			0
Current and non-current liabilities		(68	)		0
Net assets		40,759			0

Reconciliation to carrying amounts	*September 30, 2021*			*December 31, 2020*
Opening net assets		0			0
Acquired during the year		40,750			0
Share of profit of equity-accounted investees		9			0
Other comprehensive income		0			0
		40,759			0

Company share in %		61.35	%		0	%
Company share		25,006			0
Carrying amount of investment in equity-accounted investee		25,006			0

Summarised financial position
												March 31, 2022	December 31, 2021
Current assets												42	42
Non-current assets												51,690	51,690
Current and non-current liabilities												(93)	(80)
Net assets												51,639	51,652

Company share in %												61.35%	61.35%
Company share												31,680	31,688
Carrying amount of investment in equity-accounted investee												31,680	31,688

Reconciliation to carrying amounts
												March 31, 2022	December 31, 2021
Opening net assets												31,688	-
Acquired during the year												-	25,000
Share of profit (loss) of equity-accounted investees												(8)	6,688
Other comprehensive income												-	-
												31,680	31,688

Summarized statement of comprehensive income	*Three months ended September 30, 2021*			*Three months ended September 30, 2020*		*Nine months ended September 30, 2021*			*Nine months ended September 30, 2020*		Summarized statement of comprehensive income
												Three months ended March 31, 2022	Three months ended March 31, 2021
Revenue		0			0		0			0		-	-
Other income		(67	)		0		72			0		-	-
Expenses		(9	)		0		(63	)		0		(13)	(20)
Profit for the period		(76	)		0		9			0
Net income												(13)	(20)
Other comprehensive income		-			-		0			0		-	-
Total comprehensive income for the period		(76	)		0		9			0		(13)	(20)
Aggregate amounts of the Company share of profit/ (loss) of equity-accounted investee		(46	)		0		6			0
Aggregate amounts of the Company share of loss of equity-accounted investee											Aggregate amounts of the Company share of loss of equity-accounted investee	(8)	(12)

		September 30, 2021				December 31, 2020
Carrying amount of individually immaterial investment in equity-accounted investee			0				111

Period Ended	Total Number of Shares Purchased		Average Price Paid per Share (1)		Total Number of Shares Purchased as Part of Publicly Announced Programs		Maximum Dollar Value that May Yet be Purchased Under the Programs
August 31, 2021		15,943	$	6.06		15,943	$	24,903,328
September 30, 2021		41,816	$	5.49		41,816	$	24,672,449
		57,759				57,759

Period Ended	*Total number of shares purchased*	Average price paid per share (1) ($)	*Total number of shares purchased as part of publicly announced program*	Maximum dollar value that may yet to be purchased under program ($)
January 31, 2022	130,803	5.08	130,803	1,432,822
February 28, 2022	75,865	4.90	75,865	1,061,426
March 31, 2022	52,739	4.36	52,739	831,229
Total	259,407		259,407

	Nine Months Ended September 30,				As % of Revenue
	2021		2020		2021			2020
Employee benefit expenses		345,349		309,849		65.8	%		66.5	%
Rent expense		22,031		23,146		4.2	%		5.0	%
Depreciation and amortization		18,709		18,670		3.6	%		4.0	%
Other		68,035		57,082		13.0	%		12.3	%
Total	$	454,124	$	408,747