STEEL PARTNERS HOLDINGS L.P.

•Diversified Industrial - Camden, Delaware; Brewster, New York; Bristol, Pennsylvania; Addison and Glendale Heights, Illinois; Evansville, Indiana; Agawam, Massachusetts; Rockford, Minnesota; St. Louis, Missouri; Charlotte and Statesville, North Carolina; Anderson, South Carolina; Cudahy, Muskego and Pleasant Prairie, Wisconsin; Warwick, Rhode Island; Laval, Canada; Matamoros, Mexicali and Tecate, Mexico; Welham Green and Blackwood, United Kingdom; Freiburg and Pansdorf, Germany; Riberac, France; and Suzhou, China.

•Energy - The Energy business owns office space in Williston, North Dakota; Farmington, New Mexico; and Andrews, Texas; and leases office space in Johnstown, Colorado and Midland, Texas. Steel Sports leases space in Yaphank, New York and Johnstown, Colorado for its baseball service operations and office space in Virginia Beach, Virginia; and Somerville, NJ.

•Financial Services - Salt Lake City, Utah; Summit, New Jersey; Denver, Colorado; and Miami, Florida.

•Supply Chain - ModusLink leases space in Miami, Florida; Smyrna, Tennessee; Tlaquepaque, Zapopan and Apodaca, Mexico; Milperra, Australia; Chongqing, Kunshan, Shanghai and Shenzhen, China; Penang, Malaysia; Singapore; Apeldoorn and Venray, Netherlands; Brno, Czech Republic; Cork and Kildare, Ireland; and Phan Thong, Thailand.

•Corporate – New York, New York; Hermosa Beach, California; and Miami, Florida.

Management believes all of our properties have been well maintained, are in good condition and are adequate and suitable for our business as presently conducted.

• Future cash flows from operations or through financings may not be sufficient to enable the Company to meet its obligations under its senior credit facility, and this would likely have a material adverse effect on its businesses, financial condition and results of operations, and credit market volatility may affect our ability to refinance our existing debt, borrow funds under our existing lines of credit or incur additional debt.
• Our business strategy includes acquisitions, and acquisitions entail numerous risks, including the risk of management diversion and increased costs and expenses, all of which could negatively affect the Company’s profitability.
• Divestitures and contingent liabilities from divested businesses could adversely affect our business and financial results.
• We may sustain losses in our investment portfolio, which could have an adverse effect on our results of operations, financial condition and liquidity.
• If our businesses are unable to adequately obtain or protect the intellectual property and licenses upon which they rely, or other third parties claim that our businesses have infringed upon or otherwise violated their intellectual property, we could face material adverse effects to our financial condition, businesses and results of operations.
• We conduct business outside of the United States, which may expose us to additional risks not typically associated with companies that operate solely in the United States.
• Global trade issues and changes in and uncertainties with respect to trade policies, trade sanctions, tariffs and international trade disputes, may significantly increase the costs or limit supplies of materials and products used in our operations.
• Litigation or compliance failures could adversely affect our profitability.
• A significant disruption in, or breach in security of, our technology systems could adversely affect our business.
• Current and proposed laws and regulations regarding the protection of personal data could result in increased risks of liability or increased cost to us or could limit our service offerings.
• Labor disputes, as well as the continued or further unionization of our, and our suppliers’, workforce could increase our costs and cause work stoppages that may have an adverse effect on our business.
• WebBank's status as lender of the loans it offers, and the ability of assignees to collect interest, may be challenged, and these challenges could negatively impact WebBank’s ongoing and future business.
• WebBank is subject to capital requirements, and SPLP could be called upon by the FDIC to infuse additional capital into WebBank to the extent that WebBank fails to satisfy its capital requirements.
• WebBank's lending programs depend on relationships with Marketing Partners.
• WebBank is subject to risks of litigation from its borrowers or others regarding the processing of loans for the Paycheck Protection Program, or PPP, and risks that the Small Business Administration may not fund some or all PPP loan guaranties.
• We are subject to credit and interest rate risk in connection with our lending activities, and our financial condition and results of operations may be negatively impacted by factors that adversely affect our borrowers.
• Our businesses have been, and may in the future be, adversely affected by conditions in the financial services industry.
• Changes in Steel Connect’s relationships with significant clients, including the loss or reduction in business from one or more of them, could have a material adverse impact on its business.
• Our subsidiaries do not have long-term contracts with all of their customers, and the loss of customers with which we do not have long-term contracts could materially adversely affect our financial condition, business and results of operations.
• Failure to maintain effective internal control over financial reporting could result in material misstatements in our financial statements, and a failure to meet its reporting and financial obligations, each of which could adversely affect our results of operations and financial condition.
• Epidemics, pandemics, outbreaks of disease and other adverse public health developments have, and may in the future have, an adverse effect on our business, results of operations, financial condition and cash flows.
• Loss of essential employees could have a significant negative impact on our business.
• Risks Related to Our Structure
• The unitholders have limited recourse to maintain actions against the General Partner, the Board of Directors, our officers and the Manager.
• Our Partnership Agreement contains certain provisions that may limit the voting rights of some unitholders.
• There are certain interlocking relationships among us and certain affiliates of Warren G. Lichtenstein, our Executive Chairman, which may present potential conflicts of interest.
• Certain members of our management team may be involved in other business activities that may involve conflicts of interest, possibly diverting their attention from the Company’s operations.
• Risks Related to Our Manager
• We depend on Warren G. Lichtenstein, the Chairman and Chief Executive Officer of the Manager, and Jack L. Howard, the President of the Manager, in running our businesses. The loss of their services could have a material adverse effect on our business, results and financial condition.
• We cannot determine the amount of the Management Fee that will be paid or Class C partnership units that will be issued over time with any certainty.
• Our Manager’s liability is limited under the Management Agreement, and we have agreed to indemnify our Manager against certain liabilities. Such indemnification may incentivize our Manager to take unnecessary risks with respect to actions for which it will be indemnified.
• The Partnership Agreement limits the General Partner’s fiduciary duties to our unitholders.
• Risks Related to Our Common and Preferred Units
• We may issue additional common or preferred units, or other series of units, in the future without the consent of unitholders and at a discount to the market price of such units. In particular, sales of significant amounts of the common or preferred units may cause the respective prices of the units to decline.
• Transfer restrictions contained in the Company’s Partnership Agreement and other factors could hinder the development of an active market for our common or preferred units.
• The preferred units give the holders thereof liquidation and distribution preferences over our common unitholders.
• Risks Related to Taxation
• Our common unitholders may be subject to U.S. federal, state and other income tax on their share of our taxable income, regardless of whether they receive any cash distributions from us.
• Items of income, gain, loss and deduction with respect to the units could be reallocated if the IRS does not accept the assumptions or conventions used by the Company in allocating such items.
• The Company and its current unitholders may be liable for adjustments to the Company's prior year tax returns as a result of centralized partnership audit procedures.
• Changes in tax rates, laws or regulations, including U.S. government tax reform, could have a negative impact on our results of operations.
• Our tax treatment depends on our status as a partnership for U.S. federal income tax purposes and is not assured. If we are taxed as a corporation for U.S. federal income tax purposes, it could adversely impact our results of operations.
• Our structure involves complex provisions of U.S. federal income tax law for which no clear precedent or authority may be available.
• Tax-exempt entities and non-U.S. persons face unique tax issues from owning common units that may result in adverse tax consequences to them.
• Our interests in certain of our businesses are held in intermediate holding companies treated as corporations for U.S. federal income tax purposes; such corporations may be liable for significant taxes and may create other adverse tax consequences, which could potentially adversely affect the value of our common units.
• Our subsidiaries may not be able to fully utilize their tax benefits, which could result in increased cash payments for taxes in future periods.
• Holders of our common units may be subject to state, local, and foreign taxes and return filing requirements as a result of owning such units.
• The Company may not be able to furnish to each unitholder specific tax information within 90 days after the close of each calendar year, which means that holders of common units who are U.S. taxpayers should anticipate the need to file annually a request for an extension of the due date for their income tax returns.