10-Q

UNITED STATES SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549 

Form 10-Q

(Mark One) 

☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended June 30, 2022

or 

☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from                to                

Commission file number 1-12793

StarTek, Inc.

(Exact name of registrant as specified in its charter)

Delaware	84-1370538
(State or other jurisdiction of	(I.R.S. employer
incorporation or organization)	Identification No.)
4610 South Ulster Street,
Suite 150
, Denver, Colorado	80237
(Address of principal executive offices)	(Zip code)

(303) 262-4500

(Registrant’s telephone number, including area code)

Securities registered pursuant to Section 12(b) of the Act:

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.

 Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes  ☒  No ☐ 

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).  Yes ☒  No  ☐ 

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See definitions of “large accelerated filer,” “accelerated filer”, “smaller reporting company”, and "emerging growth company" in Rule 12b-2 of the Exchange Act.

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

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐ 

Indicate by checkmark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act).  Yes ☐  No ☒ 

As of July 30, 2022, there were 40,336,417 shares of Common Stock outstanding.

1

STARTEK, INC. AND SUBSIDIARIES

TABLE OF CONTENTS

FORM 10-Q

PART I - FINANCIAL INFORMATION
ITEM 1.	FINANCIAL STATEMENTS	Page
	Consolidated Statement of Income (Loss) and Other Comprehensive Income (Loss) for the Three and Six Months Ended June 30, 2022 and 2021 (Unaudited)	4
	Consolidated Balance Sheets as of June 30, 2022(Unaudited) and December 31, 2021	5
	Consolidated Statement of Cash Flows for the Six Months Ended June 30, 2022 and 2021 (Unaudited)	6
	Consolidated Statement of Stockholders' Equity for the Three and Six Months Ended June 30, 2022 and 2021 (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	34
ITEM 4.	Controls and Procedures	34
PART II - OTHER INFORMATION
ITEM 1.	Legal proceeding	35
ITEM 1A.	Risk Factors	35
ITEM 2.	Unregistered sales of equity securities and use of proceeds	35
ITEM 3.	Defaults upon senior securities	35
ITEM 4.	Mine safety disclosure	35
ITEM 5.	Other Information	35
ITEM 6.	Exhibits	36
SIGNATURES		37

2

NOTE ABOUT FORWARD-LOOKING STATEMENTS

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:

• certain statements, including possible or assumed future results of operations, in “Management’s Discussion and Analysis of Financial Condition and Results of Operations”;

• any statements regarding the prospects for our business or any of our services;

• any statements preceded by, followed by or that include the words “may,” “will,” “should,” “seeks,” “believes,” “expects,” “anticipates,” “intends,” “continue,” “estimate,” “plans,” “future,” “targets,” “predicts,” “budgeted,” “projections,” “outlooks,” “attempts,” “is scheduled,” or similar expressions; and

• other statements regarding matters that are not historical facts.

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, 2021 filed with the Securities and Exchange Commission ("SEC") on March 14, 2022 and this Quarterly Report on Form 10-Q for the quarter ended June 30, 2022. Unless otherwise noted in this report, any description of "us," "we," or "our," refers to Startek, Inc. ("Startek") and its subsidiaries.

FILING STATUS

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.

3

PART I - FINANCIAL INFORMATION

ITEM 1.  FINANCIAL STATEMENTS

STARTEK, INC. AND SUBSIDIARIES

 CONSOLIDATED STATEMENT OF INCOME (LOSS)

(In thousands, except share and per share data)

(Unaudited)

	Three Months Ended June 30,						Six Months Ended June 30,
	2022			2021			2022			2021
Revenue		167,641			189,436			334,958			352,931
Warrant adjustment		-			(405	)		-			(830	)
Net revenue	$	167,641		$	189,031		$	334,958		$	352,101
Cost of services		(150,914	)		(164,477	)		(297,174	)		(302,860	)
Gross profit	$	16,727		$	24,554		$	37,784		$	49,241
Selling, general and administrative expenses		(13,743	)		(12,298	)		(29,624	)		(26,469	)
Impairment losses and restructuring/exit cost		(745	)		19			(2,152	)		(1,879	)
Operating income	$	2,239		$	12,275		$	6,008		$	20,893
Share of income of equity accounted investee		3,833			59			3,825			45
Interest expense, net and other income		(2,103	)		(2,484	)		(3,077	)		(16,253	)
Foreign exchange gains (losses), net		82			363			(326	)		575
Income before tax expense	$	4,051		$	10,213		$	6,430		$	5,260
Tax expense		(1,423	)		(2,093	)		(3,516	)		(6,995	)
Net income (loss)	$	2,628		$	8,120		$	2,914		$	(1,735	)
Net income (loss)
Net income attributable to noncontrolling interests		761			1,235			2,290			3,535
Net income (loss) attributable to Startek shareholders		1,867			6,885			624			(5,270	)
Net incom (loss) per common share
Basic net income (loss) attributable to Startek shareholders	$	0.05		$	0.17		$	0.02		$	(0.13	)
Diluted net income (loss) attributable to Startek shareholders	$	0.05		$	0.17		$	0.02		$	(0.13	)
Weighted average common shares outstanding
Basic		40,284			40,786			40,311			40,689
Diluted		40,308			41,222			40,366			40,689

STARTEK, INC. AND SUBSIDIARIES

 CONSOLIDATED STATEMENT OF OTHER COMPREHENSIVE INCOME (LOSS)

(In thousands, except share and per share data)

(Unaudited)

	Three Months Ended June 30,						Six Months Ended June 30,
	2022			2021			2022			2021
Net income (loss)	$	2,628		$	8,120		$	2,914		$	(1,735	)
Net income attributable to noncontrolling interests		761			1,235			2,290			3,535
Net income (loss) attributable to Startek shareholders		1,867			6,885			624			(5,270	)
Other comprehensive income (loss), net of taxes
Foreign currency translation adjustments		(3,937	)		(876	)		(3,389	)		(1,968	)
Change in fair value of derivative instruments		-			-			-			8
Pension amortization		451			(37	)		(686	)		(421	)
Other comprehensive loss	$	(3,486	)	$	(913	)	$	(4,075	)	$	(2,381	)
Other comprehensive income (loss), net of taxes
Other comprehensive income (loss) attributable to noncontrolling interest		281			-			(374	)		(69	)
Other comprehensive loss attributable to Startek shareholders		(3,767	)		(913	)		(3,701	)		(2,312	)
	$	(3,486	)	$	(913	)	$	(4,075	)	$	(2,381	)
Comprehensive income (loss)
Comprehensive income attributable to noncontrolling interests		1,042			1,235			1,916			3,466
Comprehensive income (loss) attributable to Startek shareholders		(1,900	)		5,972			(3,077	)		(7,582	)
	$	(858	)	$	7,207		$	(1,161	)	$	(4,116	)

See Notes to Consolidated Financial Statements.

4

STARTEK, INC. AND SUBSIDIARIES

 CONSOLIDATED BALANCE SHEET

(In thousands, except share data)

(Unaudited)

	June 30,			December 31,
	2022			2021
Assets
Current assets
Cash and cash equivalents		47,145			47,940
Restricted cash		8,646			7,456
Trade accounts receivables, net		84,115			106,937
Unbilled revenue		67,630			50,074
Prepaid and other current assets		19,483			12,611
Total current assets	$	227,019		$	225,018
Non-current assets
Property, plant and equipment, net		32,494			34,168
Operating lease right-of-use assets		51,157			63,012
Intangible assets, net		84,950			90,092
Goodwill		183,397			183,397
Investment in equity-accounted investees		35,513			31,688
Deferred tax assets, net		4,800			3,664
Prepaid expenses and other non-current assets		8,251			11,436
Total non-current assets	$	400,562		$	417,457
Total assets	$	627,581		$	642,475
Liabilities and Stockholders’ Equity
Current liabilities
Trade accounts payables		10,615			11,916
Accrued expenses		53,493			53,203
Short term debt		5,112			3,611
Current maturity of long term debt		16,274			6,241
Current maturity of operating lease liabilities		22,710			24,393
Other current liabilities		45,430			48,265
Total current liabilities	$	153,634		$	147,629
Non-current liabilities
Long term debt		149,283			160,175
Operating lease liabilities		32,642			44,263
Other non-current liabilities		22,316			19,562
Deferred tax liabilities, net		17,802			17,526
Total non-current liabilities	$	222,043		$	241,526
Total liabilities	$	375,677		$	389,155
Stockholders’ equity
Common stock, 60,000,000 non-convertible shares, $0.01 par value, authorized; 40,996,566 and 40,893,396 shares issued as of June 30, 2022, and December 31, 2021, respectively		410			409
Additional paid-in capital		292,615			291,537
Accumulated deficit		(83,419	)		(84,043	)
Treasury stock, 692,176 and 412,769 shares as of June 30, 2022, and December 31, 2021, respectively, at cost		(3,246	)		(1,912	)
Accumulated other comprehensive loss		(14,388	)		(10,687	)
Equity attributable to Startek shareholders	$	191,972		$	195,304
Non-controlling interest		59,932			58,016
Total stockholders’ equity	$	251,904		$	253,320
Total liabilities and stockholders’ equity	$	627,581		$	642,475

See Notes to Consolidated Financial Statements.

5

STARTEK, INC. AND SUBSIDIARIES

 CONSOLIDATED STATEMENT OF CASH FLOWS

(In thousands)

(Unaudited)

	Six Months Ended June 30,
	2022			2021
Operating activities
Net income (loss)	$	2,914		$	(1,735	)
Adjustments to reconcile net income (loss) to net cash provided by operating activities:
Depreciation and amortization		14,558			13,470
Profit on sale of property, plant and equipment		(152	)		(73	)
Provision for doubtful accounts		(136	)		32
Amortization of debt issuance costs (including loss on extinguishment of debt)		286			11,302
Amortization of call option premium		720			480
Warrant contra revenue		-			830
Share-based compensation expense		833			591
Deferred income taxes		(1,157	)		(1,255	)
Share of income of equity-accounted investees		(3,825	)		(45	)
Changes in operating assets and liabilities:
Trade accounts receivables		19,544			(11,412	)
Prepaid expenses and other assets		(25,539	)		(2,971	)
Trade accounts payable		(712	)		(9,965	)
Income taxes, net		(1,046	)		2,724
Accrued expenses and other liabilities		2,418			9,505
Net cash provided by operating activities	$	8,706		$	11,478
Investing activities
Purchase of property, plant and equipment, net		(6,191	)		(7,513	)
Investment in equity-accounted investees		-			(25,000	)
Payments for call option premium		-			(3,000	)
Proceeds from equity-accounted investees		-			104
Net cash used in investing activities	$	(6,191	)	$	(35,409	)
Financing activities
Proceeds from the issuance of common stock		246			1,283
Proceeds from long term debt (net of debt issuance cost paid to lenders)		-			156,525
Payments of long term debt		-			(117,600	)
Payments for loan fees related to long term debt		-			(2,794	)
Proceeds from a line of credit, net		1,423			-
Payments of other borrowings, net		(969	)		(9,431	)
Common stock repurchases		(1,334	)		-
Net cash (used in)/ provided by financing activities	$	(634	)	$	27,983
Net increase in cash and cash equivalents		1,881			4,052
Effect of exchange rate changes on cash and cash equivalents and restricted cash		(1,486	)		(548	)
Cash and cash equivalents and restricted cash at beginning of period		55,396			50,559
Cash and cash equivalents and restricted cash at end of period	$	55,791		$	54,063
Components of cash and cash equivalents and restricted cash
Balances with banks		47,145			47,018
Restricted cash		8,646			7,045
Total cash and cash equivalents and restricted cash	$	55,791		$	54,063
Supplemental disclosure of cash flow information
Cash paid for interest and other finance cost		4,700			17,091
Cash paid for income taxes		5,573			5,541
Supplemental disclosure of non-cash activities
Non-cash warrant contra revenue		-			830
Non-cash share-based compensation expenses		833			591

See Notes to Consolidated Financial Statements.

6

STARTEK, INC. AND SUBSIDIARIES

 CONSOLIDATED STATEMENT OF STOCKHOLDERS’ EQUITY

(In thousands, except share data)

(Unaudited)

	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
Three months ended
Balance at March 31, 2022		40,953,221	$	410		672,176	$	(3,183	)	$	292,104	$	(85,286	)	$	(6,268	)	$	-		$	(4,353	)	$	193,424		$	58,890		$	252,314
Issuance of common stock		43,345		0		-		-			106		-			-			-			-			106			-			106
Share-based compensation expenses		-		-		-		-			405		-			-			-			-			405			-			405
Net income (loss)		-		-		-		-			-		1,867			-			-			-			1,867			761			2,628
Other comprehensive income (loss)		-		-		-		-			-		-			(3,937	)		-			170			(3,767	)		281			(3,486	)
Repurchase of common stock		-		-		20,000		(63	)		-		-			-			-			-			(63	)		-			(63	)
Balance at June 30, 2022		40,996,566	$	410		692,176	$	(3,246	)	$	292,615	$	(83,419	)	$	(10,205	)	$	-		$	(4,183	)	$	191,972		$	59,932		$	251,904
Balance at March 31, 2021		40,781,804	$	408		-	$	-		$	290,646	$	(97,698	)	$	(5,621	)	$	-		$	(3,064	)	$	184,671		$	52,837		$	237,508
Issuance of common stock		14,375		0		-		-			39		-			-			-			-			39			-			39
Share-based compensation expenses		-		-		-		-			311		-			-			-			-			311			-			311
Warrant expense		-		-		-		-			405		-			-			-			-			405			-			405
Net income (loss)		-		-		-		-			-		6,885			-			-			-			6,885			1,235			8,120
Other comprehensive income (loss)		-		-		-		-			-		-			(876	)		-			(37	)		(913	)		-			(913	)
Balance at June 30, 2021		40,796,179	$	408		-	$	-		$	291,401	$	(90,813	)	$	(6,497	)	$	-		$	(3,101	)	$	191,398		$	54,072		$	245,470
Six months ended
Balance at December 31, 2021		40,893,396	$	409		412,769	$	(1,912	)	$	291,537	$	(84,043	)	$	(6,816	)	$	-		$	(3,871	)	$	195,304		$	58,016		$	253,320
Issuance of common stock		103,170		1		-		-			245		-			-			-			-			246			-			246
Share-based compensation expenses		-		-		-		-			833		-			-			-			-			833			-			833
Net income (loss)		-		-		-		-			-		624			-			-			-			624			2,290			2,914
Other comprehensive income (loss)		-		-		-		-			-		-			(3,389	)		-			(312	)		(3,701	)		(374	)		(4,075	)
Repurchase of common stock		-		-		279,407	$	(1,334	)		-		-			-			-			-			(1,334	)		-			(1,334	)
Balance at June 30, 2022		40,996,566	$	410		692,176	$	(3,246	)	$	292,615	$	(83,419	)	$	(10,205	)	$	-		$	(4,183	)	$	191,972		$	59,932		$	251,904
Balance at December 31, 2020		40,453,462	$	405		-	$	-		$	288,700	$	(85,543	)	$	(4,529	)	$	(8	)	$	(2,749	)	$	196,276		$	50,606		$	246,882
Issuance of common stock		342,717		3		-		-			1,280		-			-			-			-			1,283			-			1,283
Share-based compensation expenses		-		-		-		-			591		-			-			-			-			591			-			591
Warrant expense		-		-		-		-			830		-			-			-			-			830			-			830
Net income (loss)		-		-		-		-			-		(5,270	)		-			-			-			(5,270	)		3,535			(1,735	)
Other comprehensive income (loss)		-		-		-		-			-		-			(1,968	)		8			(352	)		(2,312	)		(69	)		(2,381	)
Balance at June 30, 2021		40,796,179	$	408		-	$	-		$	291,401	$	(90,813	)	$	(6,497	)	$	-		$	(3,101	)	$	191,398		$	54,072		$	245,470

As of June 30, 2022 and December 31, 2021, there were 40,304,390 and 40,480,627 shares outstanding respectively of Common Stock, net off treasury stock.

7

STARTEK, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

June 30, 2022

(In thousands, except share and per share data)

(Unaudited)

1. OVERVIEW AND BASIS OF PREPARATION

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

Business

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 employees spread across 42 delivery campuses in 13 countries. The Company services over 175 clients across various industries such as Banking and Financial Services, Insurance, Technology, Telecom, Healthcare, Travel and Hospitality, Consumer Goods, Retail, Media & Cable, E-commerce 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 a variety of 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.

Basis of preparation

The accompanying consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America ("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 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 include the accounts of Startek, Inc and its subsidiaries 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 attributable to non-controlling interests" in our consolidated statement of income (loss).

As of December 31, 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 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, 2021.

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

8

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Use of Estimates

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, 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 assumption about the possible effect of the global macroeconomic conditions, including heightened inflation, changes to fiscal and monetary policy, higher interest rates, currency fluctuations, labor shortages & challenges in supply chain, have the potential to negatively impact the Company. There current macroeconomic conditions may continue or aggravate and could cause the United States economy or other global economies to experience an economic slowdown or recession. We anticipate our business and operations could be materially adversely affected by a prolonged recession in the United States or other major global economy. Although these estimates and assumptions 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.

Revenue

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" for further information.

Leases

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 non-financial 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.

9

 

Goodwill and Intangible Assets

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 "Goodwill and Intengible Assets" 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.

Foreign Currency Matters

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 U.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 investees

Investment in 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 financial and operating policy decisions of the investee but is not control or joint control over those policies.

Investment in equity accounted investees are accounted for using equity method of accounting. Under the equity method, the investment in equity accounted investee is initially recognized at cost and adjusted thereafter for the post acquisition changes in the Company’s share of net assets of the equity accounted investees. Goodwill relating to investment in 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 reflects the Company’s share of the results of operations of the equity accounted investees. When there has been a change recognized directly in the equity of the 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 are eliminated to the extent of the interest in the equity accounted investees. The Company’s share of income (loss) of equity accounted investee is shown on the face of the consolidated statement of income (loss).

The financial statements of the 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 application of the equity method, the Company determines at each reporting date whether there is any objective evidence that the investment in 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 of income (loss) of 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.

Stock-Based Compensation

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.

Common Stock Warrant Accounting

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." 

10

 

Consolidated Cash Flow Statement

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.

In the fourth quarter of 2021, a correction was made to present the payment of an amount of $8,475 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 the above reclassifications are an increase in cash flows from operating activities by $8,475 and a corresponding decline in cash flows from financing activities $8,475.

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 related to the transaction 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.

Restructuring Charges

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.

Reserves/Contingencies for Litigation and Other Matters

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.

Recent Accounting Pronouncements

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 are currently evaluating the impact of 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 U.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 any term loan obtained by the Company which is linked to LIBOR. The Company is closely monitoring the 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 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 adopting ASU 2021-10 within its Form 10-K for the fiscal year 2022.

11

3. GOODWILL AND INTANGIBLE ASSETS

Goodwill

The carrying value of goodwill is allocated to reporting units as follows:

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

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. 

As of June 30, 2022 and December 31, 2021, based on the qualitative assessment, we concluded that there is no impairment of goodwill.

The following table presents the changes in goodwill during the six months ended June 30, 2022 and year ended December 31, 2021:

	June 30, 2022		December 31, 2021
Opening balance		183,397		183,397
Impairment		-		-
Closing balance	$	183,397	$	183,397

Intangible Assets

The following table presents our intangible assets:

	As of June 30, 2022
	Gross Intangibles		Accumulated Amortization		Net Intangibles		Weighted Average Amortization Period (years)
Customer relationships		66,220		24,670		41,550		6.5
Brand		49,500		16,892		32,608		7.1
Trademarks		13,210		3,476		9,734		7.5
Other intangibles		2,130		1,072		1,058		4.9
	$	131,060	$	46,110	$	84,950

	As of December 31, 2021
	Gross Intangibles		Accumulated Amortization		Net Intangibles		Weighted Average Amortization Period (years)
Customer relationships		66,220		21,887		44,333		6.5
Brand		49,500		15,074		34,426		7.1
Trademarks		13,210		3,036		10,174		7.5
Other intangibles		2,130		971		1,159		4.9
	$	131,060	$	40,968	$	90,092

As of June 30, 2022, based on the management assessment, we concluded there is no impairment on the Company's intangible assets.

Expected future amortization of intangible as of  June 30, 2022 is as follows:

Year ending December 31,	Amount
Remainder of 2022		5,175
2023		10,306
2024		10,252
2025		10,252
2026		9,490
Thereafter		39,475

12

4.  REVENUE

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.

Contracts with Customers

All of the Company's revenues are derived generally from written contracts with our customers. Our contracts document our customers' 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.

Performance Obligations

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:

• The identification, operation, management, and maintenance of facilities, IT equipment, and IT and telecommunications infrastructure

• Management of the entire human resources function, including recruiting, hiring, training, supervising, evaluating, coaching, retaining, compensating, providing employee benefits programs, and disciplinary activities

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.

13

 

Revenue Recognition Methods

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 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.

Practical expedients and exemptions

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

• ASC 606-10-50-14 exempts companies from the disclosure of the transaction price allocated to remaining performance obligations if the performance obligation is part of a contract that has an original expected duration of one year or less

• ASC 340-40-25-4 allows companies to recognize the incremental costs of obtaining a contract as an expense when incurred if the amortization period of the asset that the entity otherwise would have recognized is one year or less.

• ASC 606-10-32-2A allows an entity to make an accounting policy election to exclude from the measurement of the transaction price all taxes assessed by a governmental authority that are both imposed on and concurrent with a specific revenue-producing transaction and collected by the entity from a customer (for example, sales, use, value-added, and some excise taxes)

• ASC 606-10-55-18 allows an entity that has a right to consideration from a customer in an amount that corresponds directly with the value to the customer of the entity’s performance completed to date (for example, a service contract in which an entity bills a fixed amount for each hour of service provided), the entity may recognize revenue in the amount to which the entity has a right to invoice.

Disaggregated Revenue

Revenues by our clients' industry verticals for the three and six months ended  June 30, 2022 and 2021 respectively:

	Three Months Ended June 30,					Six Months Ended June 30,
Vertical	2022		2021			2022		2021
Telecom		60,694		53,611			116,746		105,285
E-commerce & Consumer		18,851		26,221			39,377		52,324
Media & Cable		15,927		23,778			32,869		49,572
Financial & Business Services		17,605		15,763			34,300		31,214
Travel & Hospitality		13,495		10,542			27,010		21,039
Healthcare & Education		7,363		40,018			18,826		57,705
Technology, IT & Related Services		5,112		4,858			10,457		9,939
Other verticals		28,594		14,645			55,373		25,853
Gross revenue		167,641		189,436			334,958		352,931
Less: Warrant contra revenue		-		(405	)		-		(830	)
Net revenue	$	167,641	$	189,031		$	334,958	$	352,101

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5. NET INCOME / (LOSS) PER SHARE

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 six months ended  June 30, 2022 and 2021, the following number of shares were used in the computation of basic and diluted earnings per share calculation (in thousands): 

	Three Months Ended June 30,				Six Months Ended June 30,
	2022		2021		2022		2021
Shares used in basic earnings per share calculation		40,284		40,786		40,311		40,689
Effect of dilutive securities:
Stock options		24		436		55		-
Restricted stock/Deferred stock units		-		-		-		-
Total effects of dilutive securities		24		436		55		-
Shares used in dilutive earnings per share calculation		40,308		41,222		40,366		40,689

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

	Three Months Ended June 30,				Six Months Ended June 30,
	2022		2021		2022		2021
Anti-dilutive securities
Stock options		-		62		-		2,114

6. IMPAIRMENT LOSSES & RESTRUCTURING/EXIT COST

Impairment Loss

As of June 30, 2022, based on the qualitative assessment, we concluded there is no impairment of goodwill.

Restructuring / Exit Cost

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

	Employee related			Facilities related			Total
Balance on December 31, 2021		480			155			635
Accruals/(reversal)		1,820			332			2,152
Payments		(1,751	)		(465	)		(2,216	)
Balance as of June 30, 2022	$	549		$	22		$	571

	Employee related			Facilities related			Total
Balance on December 31, 2020		-			25			25
Accruals/(reversal)		3,519			193			3,712
Payments		(3,039	)		(63	)		(3,102	)
Balance on December 31, 2021	$	480		$	155		$	635

Employee related

In 2022, the Company has closed few of its facilities in Argentina and Philippines, where we have terminated service of number of employees. We have recognized a provision for employee-related costs regarding the above termination. We expect to pay the remaining termination costs of $549 by the end of the fourth quarter of 2022.

Facility related

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 $22 by the end of the third quarter of 2022.

15

7.  DERIVATIVE INSTRUMENTS

Cash flow hedges

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 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 covered periods commensurate with expected exposure, generally three to twelve months. We had elected to designate our derivatives as cash flow hedges to associate the hedges' results with forecasted expenses.

As of June 30,2022 and 2021, there were no derivative contract in effect.

	Gain (Loss) Recognized in AOCI, net of tax				Gain (loss) reclassified from AOCI into Income
	Six Months Ended June 30, 2022		Six Months Ended June 30, 2021		Six Months Ended June 30, 2022		Six Months Ended June 30, 2021
Cash flow hedges
Foreign exchange contracts	$	-	$	-	$	-	$	8

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8.  FAIR VALUE MEASUREMENTS 

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 1 - Quoted prices for identical instruments traded in active markets.

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:

Derivative Instruments

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  June 30, 2022 and December 31, 2021, there were no derivative assets and liabilities.

17

9. DEBT

The below table presents details of the Company's debt:

	June 30, 2022		December 31, 2021
Short term debt
Working capital facilities		5,112		3,611
Current portion of long term debt
Current maturity of term loan		14,438		4,125
Current maturity of equipment loan		1,663		1,682
Current maturity of finance lease obligations		174		434
Total	$	21,387		9,852
Long term debt
Term loan, net of debt issuance costs		148,516	$	158,543
Equipment loan		767		1,632
Finance lease obligations		-		-
Total	$	149,283	$	160,175

Working capital facilities

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 $5.1 million as of June 30, 2022.

Term loan

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.

Principal payments due on the term loan are as follows:

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

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.

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). 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 balance unamortized portion of such costs as of June 30, 2022, amounted to $2.1 million which 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 June 30, 2022, the Company was in compliance with all financial covenants.

Following table presents the changes in debt issuance cost during the six months ended  June 30, 2022 and the year ended December 31, 2022:

	June 30, 2022			December 31, 2021
Opening balance		2,332			2,670
Add: Debt issuance cost (refinancing of term loan)		-			11,269
Less: Expensed out (ASC 470 - extinguishment or modification)		-			(10,937	)
Less: Amortization of debt issuance cost		(286	)		(670	)
Closing balance		2,046			2,332

18

 

Non-recourse factoring

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 Company has factored receivables of $21.1 million and $21.6 million as of June 30, 2022 and December 31, 2021 under these agreements .

BMO Equipment Loan

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 and fully repaid in May 2022.

Equipment Loan

On November 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 June 30, 2022 is $2.1 million.

Finance lease obligations

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.

19

10. SHARE-BASED COMPENSATION

Amazon Warrant

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, a warrant (the “Warrant”) to acquire up to 4,000,000 shares of our common stock, subject to certain vesting events. The vesting of the Warrant shares is linked to payments made by Amazon or its affiliates pursuant to a service contract. Since no vesting event occurred in the fiscal year 2021 and we do not anticipate additional vesting in the near future, the Company had not accrued any contra revenue as per ASC 606.

Share-based compensation

Our share-based compensation arrangements include grants of stock options, restricted stock units and deferred stock units under the Startek, Inc. 2008 Equity Incentive Plan and our Employee Stock Purchase Plan. The compensation expense that has been charged against income for the six months ended June 30, 2022, was $833 and is included in selling, general and administrative expense. As of June 30, 2022, there was $3,160 of total unrecognized compensation expense related to non-vested stock options, which is expected to be recognized over a weighted-average period of 2.4 years.

20

11.  ACCUMULATED OTHER COMPREHENSIVE LOSS

Accumulated other comprehensive loss consists of the following items:

	Foreign Currency Translation Adjustments			Defined Benefit Plan			Equity attributable to Startek shareholders			Non-controlling interests			Total
Balance on December 31, 2021		(6,816	)		(3,871	)		(10,687	)		(3,887	)		(14,574	)
Foreign currency translation		(3,389	)		-			(3,389	)		-			(3,389	)
Reclassification to operations		-			-			-			-			-
Pension amortization		-			(312	)		(312	)		(374	)		(686	)
Balance at June 30, 2022	$	(10,205	)	$	(4,183	)	$	(14,388	)	$	(4,261	)	$	(18,649	)

21

12.  SEGMENT REPORTING

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) 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.

We report our results of operations in six reportable segments, as follows:

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

	Three Months Ended				Six Months Ended
	June 30,				June 30,
	2022		2021		2022		2021
Revenue
Americas		41,952		84,680		87,367		148,605
India & Sri Lanka		26,264		24,079		54,224		45,561
Malaysia		11,431		13,816		22,711		28,781
Middle East		63,054		45,714		121,741		88,954
Argentina & Peru		9,321		9,143		17,626		17,302
Rest of World		15,619		11,599		31,289		22,898
Total	$	167,641	$	189,031	$	334,958	$	352,101

	Three Months Ended						Six Months Ended
	June 30,						June 30,
	2022			2021			2022			2021
Operating income (loss)
Americas		(316	)		5,369			(2,635	)		7,264
India & Sri Lanka		1,178			2,594			4,644			1,366
Malaysia		2,579			3,414			4,605			7,828
Middle East		2,103			3,009			6,404			8,750
Argentina & Peru		(949	)		(393	)		(3,269	)		(436	)
Rest of World		917			865			2,593			1,264
Segment operating income		5,512			14,858			12,342			26,036
Startek consolidation adjustments
Private offer transaction cost		(692	)		-			(1,192	)		-
Intangible amortization		(2,581	)		(2,583	)		(5,142	)		(5,143	)
Total operating income	$	2,239		$	12,275		$	6,008		$	20,893

A single client accounted for 19% and 16% of the consolidated total net revenue during the three months ended June 30, 2022 and 2021, respectively, and 18% and 17% during the six months ended June 30, 2022 and 2021, respectively.

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

	As on		As on
	June 30, 2022		December 31, 2021
Property, plant and equipment, net
Americas		10,838		11,335
India & Sri Lanka		9,908		8,712
Malaysia		2,558		2,818
Middle East		5,201		7,461
Argentina & Peru		1,219		1,453
Rest of World		2,770		2,389
Total	$	32,494	$	34,168

Investment in Equity Accounted Investees

On February 25, 2021, the Company made a $25 million strategic investment in CSS Corp LP (“an Investment Limited Liability Partnership”), and the Company accounted this investment under the equity accounted investee method of accounting in accordance with ASC 323-30-S99-1. The CODM receives a partnership statement of CSS Corp LP on quarterly basis and evaluates the carrying value of the investment in equity accounted investees. The carrying value of investment as on June 30, 2022 is $35,513, Refer Note 14 for more details.

22

13.  LEASES

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.

The components of lease expense were as follows:

	Three Months Ended June 30, 2022		Three Months Ended June 30, 2021		Six Months Ended June 30, 2022		Six Months Ended June 30, 2021
Operating lease cost	$	5,722	$	6,479	$	11,585	$	13,288
Finance lease cost
Amortization of right-of-use assets		118		153		261		339
Interest on lease liabilities		5		15		65		32
Total finance lease cost	$	123	$	168	$	326	$	371

Supplemental cash flow information related to leases was as follows:

	Six Months Ended June 30, 2022		Six Months Ended June 30, 2021
Cash paid for amounts included in the measurement of lease liabilities
Operating cash flows from operating leases		12,647		13,246
Operating cash flow from finance leases		65		32
Financing cash flows from finance leases		260		371
Right-of-use assets obtained in exchange for lease obligations
Operating leases		2,498		2,105
Finance leases		-		-

Supplemental balance sheet information related to leases was as follows:

	As of June 30, 2022			As of December 31, 2021
Operating leases
Operating lease right-of-use assets	$	51,157		$	63,012
Operating lease liabilities - Current		22,710			24,393
Operating lease liabilities - Non-current		32,642			44,263
Total operating lease liabilities	$	55,352		$	68,656
Finance Leases
Property and equipment, at cost		4,118			4,128
Accumulated depreciation		(3,870	)		(3,641	)
Property and equipment, at net	$	248		$	487
Finance lease liabilities - Current		174			434
Finance lease liabilities - Non-current		-			-
Total finance lease liabilities	$	174		$	434

Weighted average remaining lease term	As of June 30, 2022			As of December 31, 2021
Operating leases (in years)	3.26 years			3.58 years
Finance leases (in years)	0.00 years			0.00 years
Weighted average discount rate
Operating leases		7.0	%		6.8	%
Finance leases		0.0	%		0.0	%

The following table reconciles the undiscounted cash flows for the Company’s finance and operating leases as of June 30, 2022, to the finance and operating lease liabilities recorded on the Company’s balance sheet:

	Operating Leases			Finance Leases
Year ending December 31,
Remainder of 2022		11,726			174
2023		20,100			-
2024		15,638			-
2025		9,291			-
2026		2,717			-
Thereafter		2,101			-
Total lease payments		61,573			174
Less: Imputed interest		(6,221	)		-
Total present value to lease liabilities	$	55,352		$	174

23

14.  INVESTMENT IN EQUITY-ACCOUNTED INVESTEES

Following are the entity wise details of equity-accounted investees:

	% of ownership interest						Carrying amount
Name of entity	June 30, 2022			December 31, 2021			June 30, 2022		December 31, 2021
a) CSS Corp LP		61.35	%		61.35	%		35,513		31,688
b) Immaterial associates								-		-
Carrying amount of investment in equity-accounted investees								35,513		31,688

	Three months ended June 30, 2022		Three months ended June 30, 2021		Six months ended June 30, 2022		Six months ended June 30, 2021
Aggregate amounts of the group’s share of income (loss) of equity-accounted investees		3,833		59		3,825		45

a) CSS Corp LP

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.

*Subsequently reduced to 61.35%

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 income (loss) of equity-accounted investee is accounted under the “equity method” as per which the share of income (loss) of equity-accounted investee has been added to the cost.

Summarized financial position
	June 30, 2022			December 31, 2021
Current assets		34			42
Non-current assets		57,964			51,690
Current and non-current liabilities		(111	)		(80	)
Net assets		57,887			51,652
		-			-
Company share in %		61.35	%		61.35	%
Company share		35,513			31,688
Carrying amount of investment in equity-accounted investee		35,513			31,688

Reconciliation to carrying amounts
	June 30, 2022		December 31, 2021
Opening net assets		31,688		-
Acquired during the year		-		25,000
Share of income of equity-accounted investees		3,825		6,688
Other comprehensive income		-		-
		35,513		31,688

Summarized statement of comprehensive income
	Three months ended June 30, 2022			Three months ended June 30, 2021			Six months ended June 30, 2022			Six months ended June 30, 2021
Revenue		-			-			-			-
Cost of services		-			-			-			-
Gross profit		-			-			-			-
Selling, general and administrative expenses		(26	)		(34	)		(34	)		(54	)
Operating loss		(26	)		(34	)		(34	)		(54	)
Unrealised gain on investment		6,273			139			6,268			139
Net income		6,247			105			6,234			85
Other comprehensive income		-			-			-			-
Total comprehensive income for the period		6,247			105			6,234			85
Aggregate amounts of the Company share of income of equity-accounted investee at 61.35%		3,833			64			3,825			52

24

 

b) Individually immaterial associates

The Company 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 income (loss) of equity-accounted investee, is accounted under the “equity method” as per which the share of income (loss) of equity-accounted investee had been added to the cost. In 2021 the Company had realized carrying amounts related to investment in individually immaterial associates.

Aggregate share of loss of immaterial associates was $5 and $7 for three months ended and six months ended June 30, 2021, respectively.

15. COMMON STOCK

Share Repurchase Plan

In the year 2004, the Company had announced the “Repurchase plan” that authorized the Company to repurchase up-to $ 25 million of common stock. The program will remain in effect until the same is terminated by the Board of 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 management deems appropriate and will be funded from our working capital or other financing alternatives. Repurchases will be implemented by the Chief Financial Officer 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 (BOD) meeting held on August 26, 2021, the Board of Director’s approved the 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 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 six months ended June 30, 2022, we repurchased an aggregate of 279,407 shares of our common stock under our repurchase plan at an average cost of $4.75 per share.

Stock repurchase activity during the six months ended June 30, 2022 was as follows:

Period Ended	Total number of shares purchased		Average price paid per share (1) ($)		Total number of shares purchased as part of publicly announced program		Maximum dollar value that may yet to be purchased under program ($)
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
April 30, 2022		-		-		-		831,229
May 31, 2022		20,000		3.15		20,000		768,156
June 30, 2022		-		-		-		768,156
Total		279,407				279,407

1. Excludes broker commission.

25

16. PRIVATE OFFER TRANSACTION COST

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 $1,192 during the six months ended June 30, 2022 which is included in selling, general and administrative expenses.

17. SUBSEQUENT EVENTS.

None.

26

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, 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, 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 employees located across 42 delivery campuses in 13 countries. The Company services over 175 clients across a range of industries such as Banking and Financial Services, insurance, technology, telecom, healthcare, travel and hospitality, consumer goods, retail, media & cable, E-commerce and energy and utilities.

SIGNIFICANT DEVELOPMENTS

None.

RESULTS OF OPERATIONS — three months ended June 30, 2022 AND 2021

Revenue

Our gross revenues for the three months ended June 30, 2022 decreased by 11.5% to $167,641 as compared to $189,436 for the three months ended June 30, 2021.

Our net revenue for the quarter ended June 30, 2022 and 2021:

	For the Three Months Ended June 30, 2022		For the Three Months Ended June 30, 2021
Revenues		167,641		189,436
Warrant contra revenue		-		(405	)
Net revenue	$	167,641	$	189,031

Our net revenues adjusted for warrant contra revenue for the three months ended June 30, 2022 decreased to $167,641 compared to $189,031 for the three months ended June 30, 2021.

27

The breakdown of our net revenues from various segments for the three months ended June 30, 2022 and 2021 is as follows:

	Three Months Ended June 30,
	2022		2021
Americas		41,952		84,680
India & Sri Lanka		26,264		24,079
Malaysia		11,431		13,816
Middle East		63,054		45,714
Argentina & Peru		9,321		9,143
Rest of World		15,619		11,599
Total		167,641		189,031

The decline in revenue in the Americas region is primarily due to high base impact in the previous year. Revenue in the previous period included short term government program relating to COVID vaccination that did not continue in the current year. The revenue decline was also driven by the termination of operations with one of our e-commerce clients and insourcing of operations by a client in the media vertical. This decline is partly offset by increase in revenues from other clients primarily in the telecom and retail verticals. 

Revenue growth in India and Sri Lanka region was driven by continuing ramp-ups in operations with some of the largest digital native clients in this region. Our international operations delivered out of India also continues to grow.

Revenue in Malaysia saw a decline due to the termination of the contract with the e-commerce client. Our operations with travel client delivered out of Malaysia saw a strong revival in demand.

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

Our revenue in the Rest of World was higher due to ramp-ups with our clients in South Africa and Australia.

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

	For the Three Months Ended June 30, 2022		For the Three Months Ended June 30, 2021			For the Three Months Ended June 30, 2022			For the Three Months Ended June 30, 2021
Verticals:
Telecom		60,694		53,611			36	%		28	%
E-commerce & Consumer		18,851		26,221			11	%		14	%
Media & Cable		15,927		23,778			10	%		13	%
Financial & Business Services		17,605		15,763			11	%		8	%
Travel & Hospitality		13,495		10,542			8	%		6	%
Healthcare & Education		7,363		40,018			4	%		21	%
Technology, IT & Related Services		5,112		4,858			3	%		3	%
Other verticals		28,594		14,645			17	%		8	%
Gross revenue		167,641		189,436
Less: Warrant contra revenue		-		(405	)
Net revenue		167,641		189,031

Growth in telecom vertical was driven by new wins with our existing telecom clients across US and South Africa.

Financial & Business services vertical continues to perform strongly as we strengthen our partnership with key clients in these verticals.

We continue to see year-on-year and sequential improvement in volume in the travel and hospitality sector as activity in 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 across vendors.

A contract was terminated in 2021 by one of our clients from the e-commerce vertical which led to year-on -year decline in revenues from this vertical. We continue to expand our wallet share within our other clients in this vertical as we deploy customized solution to them.

Decline in revenue in the Healthcare & Education is primarily due to one-off COVID vaccination support program that the Company delivered in the previous period.

Others include contracts with public sector enterprises and government entities where we have seen increase in revenues from existing and new contracts.

28

Cost of services and gross profit

Overall, the cost of services as a percentage of revenue increased to 90% for the three months ended June 30, 2022 compared to 87% for the three months ended June 30, 2021. Employee expenses, rent costs, and depreciation and amortization are the most significant costs for the Company, representing 75.6%, 3.7%, and 4% of the total cost of services, respectively. The breakdown of the cost of services is listed in the table below:

	Three Months Ended June 30,
	2022		2021
Employee benefit expenses		114,063		126,135
Rent expense		5,562		7,473
Depreciation and amortization		6,112		6,161
Other		25,177		24,708
Total	$	150,914	$	164,477

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 68% for the current period as compared to 66.7% for the previous period. This increase was primarily driven by inflation-led wage increases implemented in the fourth quarter of 2021 and first quarter of 2022. The Company has seen aggressive ramp-up with some our clients in ecommerce vertical which led to considerable increase in upfront cost incurred on recruitment and training. Revenue from these ramp-up will start accruing in the future.

Rent expense: Rent expense as a percentage of revenue decreased to 3.3% for the current period as compared to 4% for the previous period. The decrease is driven by rationalization of brick-and-mortar sites across geographies as operations moved to our work from home model.

Depreciation and amortization: Depreciation and amortization expense as a percentage of revenue for the current period was marginally increased at 3.6% as compared to 3.3% for the previous period. The increase was due to lower revenue base in the current period relative to the previous period.

Other expense includes recruitment, technology, utility, travel and outsourcing costs. As a percentage of revenue, these costs increased to 15% from 13.1%. The outsourcing cost for the current period includes pass through cost for delivery of technology services to one of our clients in the Middle East.

As a result, gross profit as a percentage of revenue for the current period decreased to 10% as compared to 13% for the previous period.

	Three Months Ended June 30,
	2022			2021
Gross revenue		167,641			189,436
Warrant contra revenue		-			(405	)
Net revenue		167,641			189,031
Cost of services		150,914			164,477
Gross profit	$	16,727		$	24,554
Gross margin		10.0	%		13.0	%

29

Selling, general and administrative expenses

Selling, general and administrative expenses (SG&A) as a percentage of revenue increased from 6.5% in the previous period to 8.2% in the current period. Increase in SG&A expenses was driven by investments made by the Company on its sales, marketing and digital efforts and also due to increase in insurance premiums relative to previous period. The SG&A costs for the current period includes costs incurred towards the ongoing take private transaction.

Impairment losses and restructuring/exit cost, net

Impairment losses and restructuring costs, net totalled $745 for the current period as compared to ($19) for the previous period. The restructuring cost during the quarter include $668 towards the restructuring exercise underway in Argentina.

Interest expense, net, and other income

Interest expense, net, and other income totalled $2,103 for the current period as compared to $2,484 for the previous period.

Income tax expense

Income tax expense for the current period was $1,423 compared to $2,093 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.

RESULTS OF OPERATIONS — Six months ended June 30, 2022 AND 2021

Revenue

Our gross revenues for the six months ended June 30, 2022 decreased by 5.1% to $334,958 as compared to $352,931 for the six months ended June 30, 2021.

Our net revenue for the six months ended June 30, 2022 and 2021:

	For the Six Months Ended June 30, 2022		For the Six Months Ended June 30, 2021
Revenues		334,958		352,931
Warrant contra revenue		-		(830	)
Net revenue	$	334,958	$	352,101

30

The breakdown of our net revenues from various segments for the six months ended June 30, 2022 and 2021 is as follows: 

	Six Months Ended June 30,
	2022		2021
Americas		87,367		148,605
India & Sri Lanka		54,224		45,561
Malaysia		22,711		28,781
Middle East		121,741		88,954
Argentina & Peru		17,626		17,302
Rest of World		31,289		22,898
Total		334,958		352,101

The decline in revenue in the Americas region is primarily due to high base impact in the previous year. Revenue in the previous period included short term government program relating to COVID vaccination that did not continue in the current year. The revenue decline was also driven by the termination of operations with one of our e-commerce clients and insourcing of operations by a client in the media vertical. This decline is partly offset by increase in revenues from other clients primarily in the telecom and retail verticals.

Revenue growth in India and Sri Lanka region was driven by continuing ramp-up in operations with some of the largest digital native clients in this region. Our international operations delivered out of India also grew during the current period.

Revenue in Malaysia saw a decline due to the termination of the contract with the e-commerce client. Our operations with travel client delivered out of Malaysia saw a strong revival in demand.

Our operation in the Middle East saw continuity of government programs that was won during the Pandemic. The Company also secured new clients which continue to ramp up in the current year.

Our revenue in the Rest of World was higher due to ramp-ups with our clients in South Africa and Australia.

The breakdown of our net revenues from various industry verticals for six months ended June 30, 2022 and 2021 is as follows:

	For the Six Months Ended June 30, 2022		For the Six Months Ended June 30, 2021			For the Six Months Ended June 30, 2022			For the Six Months Ended June 30, 2021
Verticals:
Telecom		116,746		105,285			35	%		30	%
E-commerce & Consumer		39,377		52,324			12	%		15	%
Media & Cable		32,869		49,572			10	%		14	%
Financial & Business Services		34,300		31,214			10	%		9	%
Travel & Hospitality		27,010		21,039			8	%		6	%
Healthcare & Education		18,826		57,705			6	%		16	%
Technology, IT & Related Services		10,457		9,939			3	%		3	%
Other verticals		55,373		25,853			17	%		7	%
Gross revenue		334,958		352,931
Less: Warrant contra revenue		-		(830	)
Net revenue		334,958		352,101

Growth in telecom vertical was driven by new wins with our existing telecom clients across US and South Africa.

Financial & Business services vertical continues to perform strongly as we strengthen our partnership with key clients in these verticals.

We continue to see year-on-year and sequential improvement in volume in the travel and hospitality sector as activity in 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 across vendors.

A contract was terminated in 2021 by one of our clients from the e-commerce vertical which led to year-on -year decline in revenues from this vertical. The decline in revenue were partially offset by new wins and expansion with our other clients in the e-commerce vertical.

Decline in revenue in the Healthcare & Education is primarily due to one-off COVID vaccination support program that the Company delivered in the previous period.

Others include contracts with public sector enterprises and government entities where we have seen increase in revenues from existing and new contracts.

31

Cost of services and gross profit

Overall, the cost of services as a percentage of revenue increased to 88.7% for the six months ended June 30, 2022 compared to 86% for the six months ended June 30, 2021. Employee expenses, rent costs, and depreciation and amortization are the most significant costs for the Company, representing 74.9%, 3.8%, and 4.3% of the total cost of services, respectively. The breakdown of the cost of services is listed in the table below:

	Six Months Ended June 30,
	2022		2021
Employee Benefit Expenses	$	222,722	$	230,881
Rent expense		11,332		14,957
Depreciation and amortization		12,792		12,315
Other		50,328		44,707
Total	$	297,174	$	302,860

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 66.5% for the current period as compared to 65.6% for the previous period. This increase was primarily driven by inflation-led wage increases implemented in the fourth quarter of 2021 and first quarter of 2022.

Rent expense: Rent expense as a percentage of revenue decreased to 3.4% for the current period as compared to 4.2% for the previous period. The decline was driven by rationalization of some brick-and-mortar facilities across geographies as operations moved to our work from home model.

Depreciation and amortization: Depreciation and amortization expense as a percentage of revenue for the current period was marginally increased at 3.8% as compared to 3.5% for the previous period. The increase was due to lower revenue base in the current period relative to the previous period.

Other expense includes recruitment, technology, utility, travel and outsourcing costs. As a percentage of revenue, these costs increased to 15% from 12.7%. The outsourcing cost for the current period includes pass through cost for delivery of technology services to one of our clients in the Middle East.

As a result, gross profit as a percentage of revenue for the current period decreased to 11.3% as compared to 14% for the previous period.

	Six Months Ended June 30,
	2022	2021
Gross revenue	334,958	352,931
Warrant contra revenue	-	(830)
Net revenue	334,958	352,101
Cost of services	297,174	302,860
Gross profit	$ 37,784	$ 49,241
Gross margin	11.3%	14.0%

Selling, general and administrative expenses

Selling, general and administrative expenses (SG&A) as a percentage of revenue increased from 7.5% in the previous period to 8.8% in the current period. The increase was due to the investments made by the Company to strengthen sales, marketing, and digital verticals. The company also increased investments in upgrading our technology infrastructure, particularly related to security and cybersecurity aspects. The SG&A costs for the current period includes costs incurred towards the ongoing take private transaction.

Impairment losses and restructuring/exit cost, net

Impairment losses and restructuring costs, net totalled $2,152 for the current period as compared to $1,879 for the previous period. The restructuring cost during the six months include $2,049 towards the restructuring exercise underway in Argentina.

Interest expense, net, and other income

Interest expense, net, and other income totalled $3,077 for the current period as compared to $16,253 for the previous period. The expense for the previous period included $11,269 towards the refinancing of debt undertaken in February 2021. 

Income tax expense

Income tax expense for the current period was $3,516 compared to $6,995 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.

32

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.

Cash and cash equivalents and restricted cash

As of June 30, 2022, cash, cash equivalents, and restricted cash held by the Company and all its foreign subsidiaries increased by $395 to $55,791 compared to $55,396 as of December 31, 2021. The restricted cash balance as of June 30, 2022 stood at $8,646 as compared to $7,456 as of December 31, 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 six months ended June 30, 2022 and 2021 we reported net cash provided by operating activities of $8,706 and $11,478, respectively. The decrease in net cash flows from operating activities was driven by a net increase of $6,784 in net working capital which was partially offset by decrease in non-cash reconciling items such as deferred tax expense, depreciation and amortization and warrant contra revenue, of $14,205.

Cash flows used in investing activities

For the six months ended June 30, 2022, and 2021, we reported net cash used in investing activities of $(6,191) and $(35,409) respectively. Net cash used in investing activities for current periods primarily towards capital expenditure while the amount for the previous period includes $25,000 towards the investment in CSS Corp and $3,000 towards payment of call option premium.

Cash flows from financing activities

For the six months ended June 30, 2022 and 2021 we reported net cash flows (used in) and provided by financing activities of $(634) and $27,983, respectively. During the six months ended June 30, 2021 our net borrowings increased mainly due to refinancing of senior term debt completed during the period. During the six months ended June 30, 2022, the Company repurchased an aggregate of 279,407 shares amounting to $1,334.

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.

33

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. 

CRITICAL ACCOUNTING POLICIES AND ESTIMATES

In preparing our consolidated financial statements in conformity with US-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:

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 Rule 13a-15(e) under the Securities Exchange Act of 1934, as amended (the “Exchange Act”)). We maintain disclosure controls and procedures designed to ensure that information required to be disclosed in reports filed or submitted by us under the Exchange 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 Exchange Act is accumulated and communicated to management, including our Chief Executive Officer and Chief Financial Officer, or persons performing similar functions, as appropriate to allow timely decisions regarding required disclosure. Based on management's evaluation, our Chief Executive Officer and Chief Financial Officer concluded that our disclosure controls and procedures were effective at the reasonable assurance level as of June 30, 2022.

Changes in Internal Control over Financial Reporting: 

There have been no changes in the Company's internal control over financial reporting during the quarter ended June 30, 2022 that have materially affected, or are reasonably likely to materially affect, the Company's internal control over financial reporting.

34

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, 2021.

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 $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 six months ended June 30, 2022, we repurchased an aggregate of 279,407 shares of our common stock under our repurchase plan at an average cost of $4.75 per share. Additional information regarding the Company’s repurchases of common stock during the six months ended June 30, 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.

35

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 Six Months Ended June 30, 2022 and 2021 (Unaudited), (ii) Consolidated Balance Sheets as of June 30, 2022 (Unaudited) and December 31, 2021, (iii) Consolidated Statements of Cash Flows for the Six Months Ended June 30, 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.

36

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/ Bharat Rao	Date: August 8, 2022
	Bharat Rao
	Chief Executive Officer
By:	/s/ Nishit Shah	Date: August 8, 2022
	Nishit Shah
	Chief Financial Officer

37

EX-31.1

EXHIBIT 31.1

CHIEF EXECUTIVE OFFICER CERTIFICATION

I, Bharat Rao, certify that:

1.     I have reviewed this quarterly report on Form 10-Q of Startek, Inc.;

2.     Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3.     Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4.     The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a.      Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b.      Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c.      Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d.      Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5.     The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

a.      All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b.      Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: August 8, 2022	/s/ Bharat Rao
	Bharat Rao
	CEO

EX-31.2

EXHIBIT 31.2

CHIEF FINANCIAL OFFICER CERTIFICATION

I, Nishit Shah, certify that:

1.     I have reviewed this quarterly report on Form 10-Q of Startek, Inc.;

2.     Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3.     Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4.     The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a.      Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b.      Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c.      Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d.      Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5.     The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

a.      All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b.      Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: August 8, 2022	/s/ Nishit Shah
	Nishit Shah
	Chief Financial Officer

EX-32.1

EXHIBIT 32.1

CERTIFICATIONS

In connection with the Quarterly Report of Startek, Inc. on Form 10-Q for the quarterly period ended June 30, 2022 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), each of the undersigned individuals, certifies, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that to his knowledge:

1)      The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

2)      The information contained in the Report fairly presents, in all material respects, the financial condition and result of operations of the Registrant.

Date: August 8, 2022	/s/ Bharat Rao
	Bharat Rao
	Chief Executive Officer
Date: August 8, 2022	/s/ Nishit Shah
	Nishit Shah
	Chief Financial Officer

A signed original of this written statement required by Section 906, or other document authenticating, acknowledging, or otherwise adopting the signature that appears in typed form within the electronic version of this written statement required by Section 906, has been provided to the Corporation and will be retained by the Corporation and furnished to the Securities and Exchange Commission or its staff upon request.

XML

Document And Entity Information - shares	6 Months Ended
	Jun. 30, 2022	Jul. 30, 2022
Document Information [Line Items]
Entity Central Index Key	0001031029
Entity Registrant Name	StarTek, Inc.
Amendment Flag	false
Current Fiscal Year End Date	--12-31
Document Fiscal Period Focus	Q2
Document Fiscal Year Focus	2022
Document Type	10-Q
Document Quarterly Report	true
Document Period End Date	Jun. 30, 2022
Document Transition Report	false
Entity File Number	1-12793
Entity Address, Address Line One
Entity Incorporation, State or Country Code	DE
Entity Tax Identification Number	84-1370538
Entity Address, City or Town	Denver
Entity Address, State or Province	CO
Entity Address, Postal Zip Code	80237
City Area Code	303
Local Phone Number	262-4500
Title of 12(b) Security	Common Stock, $0.01 par value
Trading Symbol	SRT
Security Exchange Name	NYSE
Entity Current Reporting Status	Yes
Entity Interactive Data Current	Yes
Entity Filer Category	Accelerated Filer
Entity Small Business	true
Entity Emerging Growth Company	false
Entity Shell Company	false
Entity Common Stock, Shares Outstanding		40,336,417

XML

Consolidated Statement of Income (Loss) (Unaudited) - USD ($) shares in Thousands, $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2022	Jun. 30, 2021	Jun. 30, 2022	Jun. 30, 2021
Revenue	$ 167,641	$ 189,436	$ 334,958	$ 352,931
Warrant adjustment	0	(405)	0	(830)
Net revenue	167,641	189,031	334,958	352,101
Cost of services	(150,914)	(164,477)	(297,174)	(302,860)
Gross profit	16,727	24,554	37,784	49,241
Selling, general and administrative expenses	(13,743)	(12,298)	(29,624)	(26,469)
Impairment losses and restructuring/exit cost	(745)	19	(2,152)	(1,879)
Operating income	2,239	12,275	6,008	20,893
Share of income of equity accounted investee	3,833	59	3,825	45
Interest expense, net and other income	(2,103)	(2,484)	(3,077)	(16,253)
Foreign exchange gains (losses), net	82	363	(326)	575
Income before tax expense	4,051	10,213	6,430	5,260
Tax expense	(1,423)	(2,093)	(3,516)	(6,995)
Net income (loss)	2,628	8,120	2,914	(1,735)
Net income attributable to noncontrolling interests	761	1,235	2,290	3,535
Net income (loss) attributable to Startek shareholders	$ 1,867	$ 6,885	$ 624	$ (5,270)
Basic net income (loss) attributable to Startek shareholders (in dollars per share)	$ 0.05	$ 0.17	$ 0.02	$ (0.13)
Diluted net income (loss) attributable to Startek shareholders (in dollars per share)	$ 0.05	$ 0.17	$ 0.02	$ (0.13)
Basic (in shares)	40,284	40,786	40,311	40,689
Diluted (in shares)	40,308	41,222	40,366	40,689

XML

Consolidated Statement of Other Comprehensive Income (Loss) (Unaudited) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2022	Jun. 30, 2021	Jun. 30, 2022	Jun. 30, 2021
Net income (loss)	$ 2,628	$ 8,120	$ 2,914	$ (1,735)
Net income attributable to noncontrolling interests	761	1,235	2,290	3,535
Net income (loss) attributable to Startek shareholders	1,867	6,885	624	(5,270)
Other comprehensive income (loss), net of taxes
Foreign currency translation adjustments	(3,937)	(876)	(3,389)	(1,968)
Change in fair value of derivative instruments	0	0	0	8
Pension amortization	451	(37)	(686)	(421)
Other comprehensive loss	(3,486)	(913)	(4,075)	(2,381)
Other comprehensive income (loss) attributable to noncontrolling interest	281	0	(374)	(69)
Other comprehensive loss attributable to Startek shareholders	(3,767)	(913)	(3,701)	(2,312)
Comprehensive income (loss)
Comprehensive income attributable to noncontrolling interests	1,042	1,235	1,916	3,466
Comprehensive income (loss) attributable to Startek shareholders	(1,900)	5,972	(3,077)	(7,582)
Comprehensive Income (Loss), Net of Tax, Including Portion Attributable to Noncontrolling Interest, Total	$ (858)	$ 7,207	$ (1,161)	$ (4,116)

XML

Consolidated Balance Sheet (Unaudited) - USD ($) $ in Thousands	Jun. 30, 2022	Dec. 31, 2021
Current assets
Balances with banks	$ 47,145	$ 47,940
Restricted cash	8,646	7,456
Trade accounts receivables, net	84,115	106,937
Unbilled revenue	67,630	50,074
Prepaid and other current assets	19,483	12,611
Total current assets	227,019	225,018
Non-current assets
Property, plant and equipment, net	32,494	34,168
Operating lease right-of-use assets	51,157	63,012
Intangible assets, net	84,950	90,092
Goodwill	183,397	183,397
Investment in equity-accounted investees	35,513	31,688
Deferred tax assets, net	4,800	3,664
Prepaid expenses and other non-current assets	8,251	11,436
Total non-current assets	400,562	417,457
Total assets	627,581	642,475
Current liabilities
Trade accounts payables	10,615	11,916
Accrued expenses	53,493	53,203
Short term debt	5,112	3,611
Current maturity of term loan	16,274	6,241
Current maturity of operating lease liabilities	22,710	24,393
Other current liabilities	45,430	48,265
Total current liabilities	153,634	147,629
Non-current liabilities
Long term debt	149,283	160,175
Operating lease liabilities - Non-current	32,642	44,263
Other non-current liabilities	22,316	19,562
Deferred tax liabilities, net	17,802	17,526
Total non-current liabilities	222,043	241,526
Total liabilities	375,677	389,155
Stockholders’ equity
Common stock, 60,000,000 non-convertible shares, $0.01 par value, authorized; 40,996,566 and 40,893,396 shares issued as of June 30, 2022, and December 31, 2021, respectively	410	409
Additional paid-in capital	292,615	291,537
Accumulated deficit	(83,419)	(84,043)
Treasury stock, 692,176 and 412,769 shares as of June 30, 2022, and December 31, 2021, respectively, at cost	(3,246)	(1,912)
Accumulated other comprehensive loss	(14,388)	(10,687)
Equity attributable to Startek shareholders	191,972	195,304
Non-controlling interest	59,932	58,016
Total stockholders’ equity	251,904	253,320
Total liabilities and stockholders’ equity	$ 627,581	$ 642,475

XML

Consolidated Balance Sheet (Unaudited) (Parentheticals) - $ / shares	Jun. 30, 2022	Dec. 31, 2021
Common stock, par value (in dollars per share)	$ 0.01	$ 0.01
Common stock, shares authorized (in shares)	60,000,000
Common stock, shares issued (in shares)	40,996,566	40,893,396
Treasury stock, shares (in shares)	692,176	412,769

XML

Consolidated Statement of Cash Flows (Unaudited) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended		12 Months Ended
	Jun. 30, 2022	Jun. 30, 2021	Jun. 30, 2022	Jun. 30, 2021	Dec. 31, 2021
Operating activities
Net income (loss)	$ 2,628	$ 8,120	$ 2,914	$ (1,735)
Adjustments to reconcile net income (loss) to net cash provided by operating activities:
Depreciation and amortization			14,558	13,470
Profit on sale of property, plant and equipment			(152)	(73)
Provision for doubtful accounts			(136)	32
Amortization of debt issuance costs (including loss on extinguishment of debt)			286	11,302
Amortization of call option premium			720	480
Warrant contra revenue	(0)	405	(0)	830
Share-based compensation expense			833	591
Deferred income taxes			(1,157)	(1,255)
Share of income of equity-accounted investees	(3,833)	(59)	(3,825)	(45)
Changes in operating assets and liabilities:
Trade accounts receivables			19,544	(11,412)
Prepaid expenses and other assets			(25,539)	(2,971)
Trade accounts payable			(712)	(9,965)
Income taxes, net			(1,046)	2,724
Accrued expenses and other liabilities			2,418	9,505
Net cash provided by operating activities			8,706	11,478
Investing activities
Purchase of property, plant and equipment, net			(6,191)	(7,513)
Investment in equity-accounted investees			0	(25,000)
Payments for call option premium			0	(3,000)
Proceeds from equity-accounted investees			0	104
Net cash used in investing activities			(6,191)	(35,409)
Financing activities
Proceeds from the issuance of common stock			246	1,283
Proceeds from long term debt (net of debt issuance cost paid to lenders)			0	156,525
Payments of long term debt			0	(117,600)
Payments for loan fees related to long term debt			0	(2,794)
Proceeds from a line of credit, net			1,423	0
Payments of other borrowings, net			(969)	(9,431)
Common stock repurchases			(1,334)	0
Net cash (used in)/ provided by financing activities			(634)	27,983
Net increase in cash and cash equivalents			1,881	4,052
Effect of exchange rate changes on cash and cash equivalents and restricted cash			(1,486)	(548)
Cash and cash equivalents and restricted cash at beginning of period			55,396	50,559	$ 50,559
Cash and cash equivalents and restricted cash at end of period	55,791	54,063	55,791	54,063	55,396
Components of cash and cash equivalents and restricted cash
Balances with banks	47,145	47,018	47,145	47,018	$ 47,940
Restricted cash	8,646	7,045	8,646	7,045
Total cash and cash equivalents and restricted cash	$ 55,791	$ 54,063	55,791	54,063
Non-cash warrant contra revenue			0	830
Non-cash share-based compensation expenses			833	591
Supplemental disclosure of cash flow information
Cash paid for interest and other finance cost			4,700	17,091
Cash paid for income taxes			$ 5,573	$ 5,541

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Consolidated Statement of Stockholders' Equity (Unaudited) - USD ($) $ in Thousands	Common Stock [Member]	Treasury Stock [Member]	Additional Paid-in Capital [Member]	Retained Earnings [Member]	Accumulated Foreign Currency Adjustment Attributable to Parent [Member]	Accumulated Gain (Loss), Net, Cash Flow Hedge, Parent [Member]	Accumulated Defined Benefit Plans Adjustment, Net Gain (Loss) Attributable to Parent [Member]	Parent [Member]	Noncontrolling Interest [Member]	Total
Balance at Dec. 31, 2020	$ 405	$ 0	$ 288,700	$ (85,543)	$ (4,529)	$ (8)	$ (2,749)	$ 196,276	$ 50,606	$ 246,882
Issuance of common stock (in shares)	342,717	0
Issuance of common stock	$ 3	$ 0	1,280	0	0	0	0	1,283	0	1,283
Net income (loss)	0	0	0	(5,270)	0	0	0	(5,270)	3,535	(1,735)
Other comprehensive income (loss)	0	0	0	0	(1,968)	8	(352)	(2,312)	(69)	(2,381)
Share-based compensation expenses	0	0	591	0	0	0	0	591	0	591
Warrant expense	$ 0	$ 0	830	0	0	0	0	830	0	830
Balance (in shares) at Jun. 30, 2021	40,796,179	0
Balance at Jun. 30, 2021	$ 408	$ 0	291,401	(90,813)	(6,497)	0	(3,101)	191,398	54,072	245,470
Balance (in shares) at Dec. 31, 2020	40,453,462	0
Balance (in shares) at Jun. 30, 2021	40,796,179	0
Balance at Dec. 31, 2020	$ 405	$ 0	288,700	(85,543)	(4,529)	(8)	(2,749)	196,276	50,606	246,882
Balance at Dec. 31, 2021	$ 409	$ (1,912)	291,537	(84,043)	(6,816)	0	(3,871)	195,304	58,016	253,320
Balance (in shares) at Dec. 31, 2020	40,453,462	0
Balance (in shares) at Dec. 31, 2021	40,893,396	412,769
Balance (in shares) at Mar. 31, 2021	40,781,804	0
Balance at Mar. 31, 2021	$ 408	$ 0	290,646	(97,698)	(5,621)	0	(3,064)	184,671	52,837	237,508
Issuance of common stock (in shares)	14,375	0
Issuance of common stock	$ 0	$ 0	39	0	0	0	0	39	0	39
Net income (loss)	0	0	0	6,885	0	0	0	6,885	1,235	8,120
Other comprehensive income (loss)	0	0	0	0	(876)	0	(37)	(913)	0	(913)
Share-based compensation expenses	0	0	311	0	0	0	0	311	0	311
Warrant expense	$ 0	$ 0	405	0	0	0	0	405	0	405
Balance (in shares) at Jun. 30, 2021	40,796,179	0
Balance at Jun. 30, 2021	$ 408	$ 0	291,401	(90,813)	(6,497)	0	(3,101)	191,398	54,072	245,470
Balance (in shares) at Jun. 30, 2021	40,796,179	0
Balance at Dec. 31, 2021	$ 409	$ (1,912)	291,537	(84,043)	(6,816)	0	(3,871)	195,304	58,016	253,320
Issuance of common stock (in shares)	103,170	0
Issuance of common stock	$ 1	$ 0	245	0	0	0	0	246	0	246
Net income (loss)	0	0	0	624	0	0	0	624	2,290	2,914
Other comprehensive income (loss)	$ 0	$ 0	0	0	(3,389)	0	(312)	(3,701)	(374)	$ (4,075)
Total Number of Shares Purchased (in shares)	0	279,407								279,407
Repurchase of common stock	$ 0	$ (1,334)	0	0	0	0	0	(1,334)	0	$ (1,334)
Share-based compensation expenses	$ 0	$ 0	833	0	0	0	0	833	0	833
Balance (in shares) at Jun. 30, 2022	40,996,566	692,176
Balance at Jun. 30, 2022	$ 410	$ (3,246)	292,615	(83,419)	(10,205)	0	(4,183)	191,972	59,932	251,904
Balance (in shares) at Dec. 31, 2021	40,893,396	412,769
Balance (in shares) at Jun. 30, 2022	40,996,566	692,176
Balance (in shares) at Mar. 31, 2022	40,953,221	672,176
Balance at Mar. 31, 2022	$ 410	$ (3,183)	292,104	(85,286)	(6,268)	0	(4,353)	193,424	58,890	252,314
Issuance of common stock (in shares)	43,345	0
Issuance of common stock	$ 0	$ 0	106	0	0	0	0	106	0	106
Share-based compensation expenses	0	0	405	0	0	0	0	405	0	405
Net income (loss)	0	0	0	1,867	0	0	0	1,867	761	2,628
Other comprehensive income (loss)	$ 0	$ 0	0	0	(3,937)	0	170	(3,767)	281	(3,486)
Total Number of Shares Purchased (in shares)	0	20,000
Repurchase of common stock	$ 0	$ (63)	0	0	0	0	0	(63)	0	(63)
Balance (in shares) at Jun. 30, 2022	40,996,566	692,176
Balance at Jun. 30, 2022	$ 410	$ (3,246)	$ 292,615	$ (83,419)	$ (10,205)	$ 0	$ (4,183)	$ 191,972	$ 59,932	$ 251,904
Balance (in shares) at Jun. 30, 2022	40,996,566	692,176

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Note 1 - Overview and Basis of Preparation

6 Months Ended

Jun. 30, 2022

Notes to Financial Statements

Organization, Consolidation and Presentation of Financial Statements Disclosure [Text Block]

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

Business

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 employees spread across 42 delivery campuses in 13 countries. The Company services over 175 clients across various industries such as Banking and Financial Services, Insurance, Technology, Telecom, Healthcare, Travel and Hospitality, Consumer Goods, Retail, Media & Cable, E-commerce 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 a variety of 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.

Basis of preparation

The accompanying consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America ("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 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 include the accounts of Startek, Inc and its subsidiaries 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 attributable to non-controlling interests" in our consolidated statement of income (loss).

As of December 31, 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 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, 2021.

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

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Note 2 - Summary of Significant Accounting Policies

6 Months Ended

Jun. 30, 2022

Notes to Financial Statements

Significant Accounting Policies [Text Block]

Use of Estimates

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, 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 assumption about the possible effect of the global macroeconomic conditions, including heightened inflation, changes to fiscal and monetary policy, higher interest rates, currency fluctuations, labor shortages & challenges in supply chain, have the potential to negatively impact the Company. There current macroeconomic conditions may continue or aggravate and could cause the United States economy or other global economies to experience an economic slowdown or recession. We anticipate our business and operations could be materially adversely affected by a prolonged recession in the United States or other major global economy. Although these estimates and assumptions 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.

Revenue

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" for further information.

Leases

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 non-financial 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.

Goodwill and Intangible Assets

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 "Goodwill and Intengible Assets" 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.

Foreign Currency Matters

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 U.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 investees

Investment in 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 financial and operating policy decisions of the investee but is not control or joint control over those policies.

Investment in equity accounted investees are accounted for using equity method of accounting. Under the equity method, the investment in equity accounted investee is initially recognized at cost and adjusted thereafter for the post acquisition changes in the Company’s share of net assets of the equity accounted investees. Goodwill relating to investment in 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 reflects the Company’s share of the results of operations of the equity accounted investees. When there has been a change recognized directly in the equity of the 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 are eliminated to the extent of the interest in the equity accounted investees. The Company’s share of income (loss) of equity accounted investee is shown on the face of the consolidated statement of income (loss).

The financial statements of the 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 application of the equity method, the Company determines at each reporting date whether there is any objective evidence that the investment in 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 of income (loss) of 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.

Stock-Based Compensation

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.

Common Stock Warrant Accounting

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." 

Consolidated Cash Flow Statement

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.

In the fourth quarter of 2021, a correction was made to present the payment of an amount of $8,475 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 the above reclassifications are an increase in cash flows from operating activities by $8,475 and a corresponding decline in cash flows from financing activities $8,475.

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 related to the transaction 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.

Restructuring Charges

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.

Reserves/Contingencies for Litigation and Other Matters

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.

Recent Accounting Pronouncements

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 are currently evaluating the impact of 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 U.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 any term loan obtained by the Company which is linked to LIBOR. The Company is closely monitoring the 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 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 adopting ASU 2021-10 within its Form 10-K for the fiscal year 2022.

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Note 3 - Goodwill and Intangible Assets

6 Months Ended

Jun. 30, 2022

Notes to Financial Statements

Goodwill and Intangible Assets Disclosure [Text Block]

Goodwill

The carrying value of goodwill is allocated to reporting units as follows:

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

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. 

As of June 30, 2022 and December 31, 2021, based on the qualitative assessment, we concluded that there is no impairment of goodwill.

The following table presents the changes in goodwill during the six months ended June 30, 2022 and year ended December 31, 2021:

	June 30, 2022		December 31, 2021
Opening balance		183,397		183,397
Impairment		-		-
Closing balance	$	183,397	$	183,397

Intangible Assets

The following table presents our intangible assets:

	As of June 30, 2022
	Gross Intangibles		Accumulated Amortization		Net Intangibles		Weighted Average Amortization Period (years)
Customer relationships		66,220		24,670		41,550		6.5
Brand		49,500		16,892		32,608		7.1
Trademarks		13,210		3,476		9,734		7.5
Other intangibles		2,130		1,072		1,058		4.9
	$	131,060	$	46,110	$	84,950

	As of December 31, 2021
	Gross Intangibles		Accumulated Amortization		Net Intangibles		Weighted Average Amortization Period (years)
Customer relationships		66,220		21,887		44,333		6.5
Brand		49,500		15,074		34,426		7.1
Trademarks		13,210		3,036		10,174		7.5
Other intangibles		2,130		971		1,159		4.9
	$	131,060	$	40,968	$	90,092

As of June 30, 2022, based on the management assessment, we concluded there is no impairment on the Company's intangible assets.

Expected future amortization of intangible as of  June 30, 2022 is as follows:

Year ending December 31,	Amount
Remainder of 2022		5,175
2023		10,306
2024		10,252
2025		10,252
2026		9,490
Thereafter		39,475

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Note 4 - Revenue

6 Months Ended

Jun. 30, 2022

Notes to Financial Statements

Revenue from Contract with Customer [Text Block]

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.

Contracts with Customers

All of the Company's revenues are derived generally from written contracts with our customers. Our contracts document our customers' 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.

Performance Obligations

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:

• The identification, operation, management, and maintenance of facilities, IT equipment, and IT and telecommunications infrastructure

• Management of the entire human resources function, including recruiting, hiring, training, supervising, evaluating, coaching, retaining, compensating, providing employee benefits programs, and disciplinary activities

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.

Revenue Recognition Methods

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 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.

Practical expedients and exemptions

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

• ASC 606-10-50-14 exempts companies from the disclosure of the transaction price allocated to remaining performance obligations if the performance obligation is part of a contract that has an original expected duration of one year or less

• ASC 340-40-25-4 allows companies to recognize the incremental costs of obtaining a contract as an expense when incurred if the amortization period of the asset that the entity otherwise would have recognized is one year or less.

• ASC 606-10-32-2A allows an entity to make an accounting policy election to exclude from the measurement of the transaction price all taxes assessed by a governmental authority that are both imposed on and concurrent with a specific revenue-producing transaction and collected by the entity from a customer (for example, sales, use, value-added, and some excise taxes)

• ASC 606-10-55-18 allows an entity that has a right to consideration from a customer in an amount that corresponds directly with the value to the customer of the entity’s performance completed to date (for example, a service contract in which an entity bills a fixed amount for each hour of service provided), the entity may recognize revenue in the amount to which the entity has a right to invoice.

Disaggregated Revenue

Revenues by our clients' industry verticals for the three and six months ended  June 30, 2022 and 2021 respectively:

	Three Months Ended June 30,					Six Months Ended June 30,
Vertical	2022		2021			2022		2021
Telecom		60,694		53,611			116,746		105,285
E-commerce & Consumer		18,851		26,221			39,377		52,324
Media & Cable		15,927		23,778			32,869		49,572
Financial & Business Services		17,605		15,763			34,300		31,214
Travel & Hospitality		13,495		10,542			27,010		21,039
Healthcare & Education		7,363		40,018			18,826		57,705
Technology, IT & Related Services		5,112		4,858			10,457		9,939
Other verticals		28,594		14,645			55,373		25,853
Gross revenue		167,641		189,436			334,958		352,931
Less: Warrant contra revenue		-		(405	)		-		(830	)
Net revenue	$	167,641	$	189,031		$	334,958	$	352,101

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Note 5 - Net Income (Loss) Per Share

6 Months Ended

Jun. 30, 2022

Notes to Financial Statements

Earnings Per Share [Text Block]

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 six months ended  June 30, 2022 and 2021, the following number of shares were used in the computation of basic and diluted earnings per share calculation (in thousands): 

	Three Months Ended June 30,				Six Months Ended June 30,
	2022		2021		2022		2021
Shares used in basic earnings per share calculation		40,284		40,786		40,311		40,689
Effect of dilutive securities:
Stock options		24		436		55		-
Restricted stock/Deferred stock units		-		-		-		-
Total effects of dilutive securities		24		436		55		-
Shares used in dilutive earnings per share calculation		40,308		41,222		40,366		40,689

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

	Three Months Ended June 30,				Six Months Ended June 30,
	2022		2021		2022		2021
Anti-dilutive securities
Stock options		-		62		-		2,114

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Note 6 - Impairment Losses & Restructuring/Exit Cost

6 Months Ended

Jun. 30, 2022

Notes to Financial Statements

Restructuring, Impairment, and Other Activities Disclosure [Text Block]

Impairment Loss

As of June 30, 2022, based on the qualitative assessment, we concluded there is no impairment of goodwill.

Restructuring / Exit Cost

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

	Employee related			Facilities related			Total
Balance on December 31, 2021		480			155			635
Accruals/(reversal)		1,820			332			2,152
Payments		(1,751	)		(465	)		(2,216	)
Balance as of June 30, 2022	$	549		$	22		$	571

	Employee related			Facilities related			Total
Balance on December 31, 2020		-			25			25
Accruals/(reversal)		3,519			193			3,712
Payments		(3,039	)		(63	)		(3,102	)
Balance on December 31, 2021	$	480		$	155		$	635

Employee related

In 2022, the Company has closed few of its facilities in Argentina and Philippines, where we have terminated service of number of employees. We have recognized a provision for employee-related costs regarding the above termination. We expect to pay the remaining termination costs of $549 by the end of the fourth quarter of 2022.

Facility related

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 $22 by the end of the third quarter of 2022.

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Note 7 - Derivative Instruments

6 Months Ended

Jun. 30, 2022

Notes to Financial Statements

Derivative Instruments and Hedging Activities Disclosure [Text Block]

Cash flow hedges

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 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 covered periods commensurate with expected exposure, generally three to twelve months. We had elected to designate our derivatives as cash flow hedges to associate the hedges' results with forecasted expenses.

As of June 30,2022 and 2021, there were no derivative contract in effect.

	Gain (Loss) Recognized in AOCI, net of tax				Gain (loss) reclassified from AOCI into Income
	Six Months Ended June 30, 2022		Six Months Ended June 30, 2021		Six Months Ended June 30, 2022		Six Months Ended June 30, 2021
Cash flow hedges
Foreign exchange contracts	$	-	$	-	$	-	$	8

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Note 8 - Fair Value Measurements

6 Months Ended

Jun. 30, 2022

Notes to Financial Statements

Fair Value Disclosures [Text Block]

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 1 - Quoted prices for identical instruments traded in active markets.

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:

Derivative Instruments

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  June 30, 2022 and December 31, 2021, there were no derivative assets and liabilities.

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Note 9 - Debt

6 Months Ended

Jun. 30, 2022

Notes to Financial Statements

Debt Disclosure [Text Block]

The below table presents details of the Company's debt:

	June 30, 2022		December 31, 2021
Short term debt
Working capital facilities		5,112		3,611
Current portion of long term debt
Current maturity of term loan		14,438		4,125
Current maturity of equipment loan		1,663		1,682
Current maturity of finance lease obligations		174		434
Total	$	21,387		9,852
Long term debt
Term loan, net of debt issuance costs		148,516	$	158,543
Equipment loan		767		1,632
Finance lease obligations		-		-
Total	$	149,283	$	160,175

Working capital facilities

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 $5.1 million as of June 30, 2022.

Term loan

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.

Principal payments due on the term loan are as follows:

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

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.

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). 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 balance unamortized portion of such costs as of June 30, 2022, amounted to $2.1 million which 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 June 30, 2022, the Company was in compliance with all financial covenants.

Following table presents the changes in debt issuance cost during the six months ended  June 30, 2022 and the year ended December 31, 2022:

	June 30, 2022			December 31, 2021
Opening balance		2,332			2,670
Add: Debt issuance cost (refinancing of term loan)		-			11,269
Less: Expensed out (ASC 470 - extinguishment or modification)		-			(10,937	)
Less: Amortization of debt issuance cost		(286	)		(670	)
Closing balance		2,046			2,332

Non-recourse factoring

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 Company has factored receivables of $21.1 million and $21.6 million as of June 30, 2022 and December 31, 2021 under these agreements .

BMO Equipment Loan

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 and fully repaid in May 2022.

Equipment Loan

On November 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 June 30, 2022 is $2.1 million.

Finance lease obligations

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.

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Note 10 - Share-based Compensation

6 Months Ended

Jun. 30, 2022

Notes to Financial Statements

Share-Based Payment Arrangement [Text Block]

Amazon Warrant

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, a warrant (the “Warrant”) to acquire up to 4,000,000 shares of our common stock, subject to certain vesting events. The vesting of the Warrant shares is linked to payments made by Amazon or its affiliates pursuant to a service contract. Since no vesting event occurred in the fiscal year 2021 and we do not anticipate additional vesting in the near future, the Company had not accrued any contra revenue as per ASC 606.

Share-based compensation

Our share-based compensation arrangements include grants of stock options, restricted stock units and deferred stock units under the Startek, Inc. 2008 Equity Incentive Plan and our Employee Stock Purchase Plan. The compensation expense that has been charged against income for the six months ended June 30, 2022, was $833 and is included in selling, general and administrative expense. As of June 30, 2022, there was $3,160 of total unrecognized compensation expense related to non-vested stock options, which is expected to be recognized over a weighted-average period of 2.4 years.

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Note 11 - Accumulated Other Comprehensive Loss

6 Months Ended

Jun. 30, 2022

Notes to Financial Statements

Comprehensive Income (Loss) Note [Text Block]

Accumulated other comprehensive loss consists of the following items:

	Foreign Currency Translation Adjustments			Defined Benefit Plan			Equity attributable to Startek shareholders			Non-controlling interests			Total
Balance on December 31, 2021		(6,816	)		(3,871	)		(10,687	)		(3,887	)		(14,574	)
Foreign currency translation		(3,389	)		-			(3,389	)		-			(3,389	)
Reclassification to operations		-			-			-			-			-
Pension amortization		-			(312	)		(312	)		(374	)		(686	)
Balance at June 30, 2022	$	(10,205	)	$	(4,183	)	$	(14,388	)	$	(4,261	)	$	(18,649	)

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Note 12 - Segment Reporting

6 Months Ended

Jun. 30, 2022

Notes to Financial Statements

Segment Reporting Disclosure [Text Block]

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) 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.

We report our results of operations in six reportable segments, as follows:

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

	Three Months Ended				Six Months Ended
	June 30,				June 30,
	2022		2021		2022		2021
Revenue
Americas		41,952		84,680		87,367		148,605
India & Sri Lanka		26,264		24,079		54,224		45,561
Malaysia		11,431		13,816		22,711		28,781
Middle East		63,054		45,714		121,741		88,954
Argentina & Peru		9,321		9,143		17,626		17,302
Rest of World		15,619		11,599		31,289		22,898
Total	$	167,641	$	189,031	$	334,958	$	352,101

	Three Months Ended						Six Months Ended
	June 30,						June 30,
	2022			2021			2022			2021
Operating income (loss)
Americas		(316	)		5,369			(2,635	)		7,264
India & Sri Lanka		1,178			2,594			4,644			1,366
Malaysia		2,579			3,414			4,605			7,828
Middle East		2,103			3,009			6,404			8,750
Argentina & Peru		(949	)		(393	)		(3,269	)		(436	)
Rest of World		917			865			2,593			1,264
Segment operating income		5,512			14,858			12,342			26,036
Startek consolidation adjustments
Private offer transaction cost		(692	)		-			(1,192	)		-
Intangible amortization		(2,581	)		(2,583	)		(5,142	)		(5,143	)
Total operating income	$	2,239		$	12,275		$	6,008		$	20,893

A single client accounted for 19% and 16% of the consolidated total net revenue during the three months ended June 30, 2022 and 2021, respectively, and 18% and 17% during the six months ended June 30, 2022 and 2021, respectively.

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

	As on		As on
	June 30, 2022		December 31, 2021
Property, plant and equipment, net
Americas		10,838		11,335
India & Sri Lanka		9,908		8,712
Malaysia		2,558		2,818
Middle East		5,201		7,461
Argentina & Peru		1,219		1,453
Rest of World		2,770		2,389
Total	$	32,494	$	34,168

Investment in Equity Accounted Investees

On February 25, 2021, the Company made a $25 million strategic investment in CSS Corp LP (“an Investment Limited Liability Partnership”), and the Company accounted this investment under the equity accounted investee method of accounting in accordance with ASC 323-30-S99-1. The CODM receives a partnership statement of CSS Corp LP on quarterly basis and evaluates the carrying value of the investment in equity accounted investees. The carrying value of investment as on June 30, 2022 is $35,513, Refer Note 14 for more details.

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Note 13 - Leases

6 Months Ended

Jun. 30, 2022

Notes to Financial Statements

Lessee, Operating Leases [Text Block]

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.

The components of lease expense were as follows:

	Three Months Ended June 30, 2022		Three Months Ended June 30, 2021		Six Months Ended June 30, 2022		Six Months Ended June 30, 2021
Operating lease cost	$	5,722	$	6,479	$	11,585	$	13,288
Finance lease cost
Amortization of right-of-use assets		118		153		261		339
Interest on lease liabilities		5		15		65		32
Total finance lease cost	$	123	$	168	$	326	$	371

Supplemental cash flow information related to leases was as follows:

	Six Months Ended June 30, 2022		Six Months Ended June 30, 2021
Cash paid for amounts included in the measurement of lease liabilities
Operating cash flows from operating leases		12,647		13,246
Operating cash flow from finance leases		65		32
Financing cash flows from finance leases		260		371
Right-of-use assets obtained in exchange for lease obligations
Operating leases		2,498		2,105
Finance leases		-		-

Supplemental balance sheet information related to leases was as follows:

	As of June 30, 2022			As of December 31, 2021
Operating leases
Operating lease right-of-use assets	$	51,157		$	63,012
Operating lease liabilities - Current		22,710			24,393
Operating lease liabilities - Non-current		32,642			44,263
Total operating lease liabilities	$	55,352		$	68,656
Finance Leases
Property and equipment, at cost		4,118			4,128
Accumulated depreciation		(3,870	)		(3,641	)
Property and equipment, at net	$	248		$	487
Finance lease liabilities - Current		174			434
Finance lease liabilities - Non-current		-			-
Total finance lease liabilities	$	174		$	434

Weighted average remaining lease term	As of June 30, 2022			As of December 31, 2021
Operating leases (in years)	3.26 years			3.58 years
Finance leases (in years)	0.00 years			0.00 years
Weighted average discount rate
Operating leases		7.0	%		6.8	%
Finance leases		0.0	%		0.0	%

The following table reconciles the undiscounted cash flows for the Company’s finance and operating leases as of June 30, 2022, to the finance and operating lease liabilities recorded on the Company’s balance sheet:

	Operating Leases			Finance Leases
Year ending December 31,
Remainder of 2022		11,726			174
2023		20,100			-
2024		15,638			-
2025		9,291			-
2026		2,717			-
Thereafter		2,101			-
Total lease payments		61,573			174
Less: Imputed interest		(6,221	)		-
Total present value to lease liabilities	$	55,352		$	174

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Note 14 - Investment in Equity-accounted Investees

6 Months Ended

Jun. 30, 2022

Notes to Financial Statements

Equity Method Investments and Joint Ventures Disclosure [Text Block]

Following are the entity wise details of equity-accounted investees:

	% of ownership interest						Carrying amount
Name of entity	June 30, 2022			December 31, 2021			June 30, 2022		December 31, 2021
a) CSS Corp LP		61.35	%		61.35	%		35,513		31,688
b) Immaterial associates								-		-
Carrying amount of investment in equity-accounted investees								35,513		31,688

	Three months ended June 30, 2022		Three months ended June 30, 2021		Six months ended June 30, 2022		Six months ended June 30, 2021
Aggregate amounts of the group’s share of income (loss) of equity-accounted investees		3,833		59		3,825		45

a) CSS Corp LP

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.

*Subsequently reduced to 61.35%

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 income (loss) of equity-accounted investee is accounted under the “equity method” as per which the share of income (loss) of equity-accounted investee has been added to the cost.

Summarized financial position
	June 30, 2022			December 31, 2021
Current assets		34			42
Non-current assets		57,964			51,690
Current and non-current liabilities		(111	)		(80	)
Net assets		57,887			51,652
		-			-
Company share in %		61.35	%		61.35	%
Company share		35,513			31,688
Carrying amount of investment in equity-accounted investee		35,513			31,688

Reconciliation to carrying amounts
	June 30, 2022		December 31, 2021
Opening net assets		31,688		-
Acquired during the year		-		25,000
Share of income of equity-accounted investees		3,825		6,688
Other comprehensive income		-		-
		35,513		31,688

Summarized statement of comprehensive income
	Three months ended June 30, 2022			Three months ended June 30, 2021			Six months ended June 30, 2022			Six months ended June 30, 2021
Revenue		-			-			-			-
Cost of services		-			-			-			-
Gross profit		-			-			-			-
Selling, general and administrative expenses		(26	)		(34	)		(34	)		(54	)
Operating loss		(26	)		(34	)		(34	)		(54	)
Unrealised gain on investment		6,273			139			6,268			139
Net income		6,247			105			6,234			85
Other comprehensive income		-			-			-			-
Total comprehensive income for the period		6,247			105			6,234			85
Aggregate amounts of the Company share of income of equity-accounted investee at 61.35%		3,833			64			3,825			52

b) Individually immaterial associates

The Company 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 income (loss) of equity-accounted investee, is accounted under the “equity method” as per which the share of income (loss) of equity-accounted investee had been added to the cost. In 2021 the Company had realized carrying amounts related to investment in individually immaterial associates.

Aggregate share of loss of immaterial associates was $5 and $7 for three months ended and six months ended June 30, 2021, respectively.

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Note 15 - Common Stock

6 Months Ended

Jun. 30, 2022

Notes to Financial Statements

Stockholders' Equity Note Disclosure [Text Block]

Share Repurchase Plan

In the year 2004, the Company had announced the “Repurchase plan” that authorized the Company to repurchase up-to $ 25 million of common stock. The program will remain in effect until the same is terminated by the Board of 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 management deems appropriate and will be funded from our working capital or other financing alternatives. Repurchases will be implemented by the Chief Financial Officer 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 (BOD) meeting held on August 26, 2021, the Board of Director’s approved the 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 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 six months ended June 30, 2022, we repurchased an aggregate of 279,407 shares of our common stock under our repurchase plan at an average cost of $4.75 per share.

Stock repurchase activity during the six months ended June 30, 2022 was as follows:

Period Ended	Total number of shares purchased		Average price paid per share (1) ($)		Total number of shares purchased as part of publicly announced program		Maximum dollar value that may yet to be purchased under program ($)
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
April 30, 2022		-		-		-		831,229
May 31, 2022		20,000		3.15		20,000		768,156
June 30, 2022		-		-		-		768,156
Total		279,407				279,407

1. Excludes broker commission.

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Note 16 - Private Offer Transaction Cost

6 Months Ended

Jun. 30, 2022

Notes to Financial Statements

Private Offer Transaction Cost [Text Block]

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 $1,192 during the six months ended June 30, 2022 which is included in selling, general and administrative expenses.

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Note 17 - Subsequent Events

6 Months Ended

Jun. 30, 2022

Notes to Financial Statements

Subsequent Events [Text Block]

None.

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Significant Accounting Policies (Policies)

6 Months Ended

Jun. 30, 2022

Accounting Policies [Abstract]

Use of Estimates, Policy [Policy Text Block]

Use of Estimates

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, 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 assumption about the possible effect of the global macroeconomic conditions, including heightened inflation, changes to fiscal and monetary policy, higher interest rates, currency fluctuations, labor shortages & challenges in supply chain, have the potential to negatively impact the Company. There current macroeconomic conditions may continue or aggravate and could cause the United States economy or other global economies to experience an economic slowdown or recession. We anticipate our business and operations could be materially adversely affected by a prolonged recession in the United States or other major global economy. Although these estimates and assumptions 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.

Revenue from Contract with Customer [Policy Text Block]

Revenue

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" for further information.

Lessee, Leases [Policy Text Block]

Leases

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 non-financial 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.

Goodwill and Intangible Assets, Goodwill, Policy [Policy Text Block]

Goodwill and Intangible Assets

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 "Goodwill and Intengible Assets" 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.

Foreign Currency Transactions and Translations Policy [Policy Text Block]

Foreign Currency Matters

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 U.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.

Equity Method Investments [Policy Text Block]

Investment in equity-accounted investees

Investment in 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 financial and operating policy decisions of the investee but is not control or joint control over those policies.

Investment in equity accounted investees are accounted for using equity method of accounting. Under the equity method, the investment in equity accounted investee is initially recognized at cost and adjusted thereafter for the post acquisition changes in the Company’s share of net assets of the equity accounted investees. Goodwill relating to investment in 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 reflects the Company’s share of the results of operations of the equity accounted investees. When there has been a change recognized directly in the equity of the 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 are eliminated to the extent of the interest in the equity accounted investees. The Company’s share of income (loss) of equity accounted investee is shown on the face of the consolidated statement of income (loss).

The financial statements of the 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 application of the equity method, the Company determines at each reporting date whether there is any objective evidence that the investment in 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 of income (loss) of 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.

Share-Based Payment Arrangement [Policy Text Block]

Stock-Based Compensation

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.

Common Stock Warrant Accounting, Policy [Policy Text Block]

Common Stock Warrant Accounting

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." 

Reclassification, Comparability Adjustment [Policy Text Block]

Consolidated Cash Flow Statement

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.

In the fourth quarter of 2021, a correction was made to present the payment of an amount of $8,475 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 the above reclassifications are an increase in cash flows from operating activities by $8,475 and a corresponding decline in cash flows from financing activities $8,475.

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 related to the transaction 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.

Costs Associated with Exit or Disposal Activities or Restructurings, Policy [Policy Text Block]

Restructuring Charges

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.

Legal Costs, Policy [Policy Text Block]

Reserves/Contingencies for Litigation and Other Matters

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.

New Accounting Pronouncements, Policy [Policy Text Block]

Recent Accounting Pronouncements

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 are currently evaluating the impact of 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 U.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 any term loan obtained by the Company which is linked to LIBOR. The Company is closely monitoring the 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 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 adopting ASU 2021-10 within its Form 10-K for the fiscal year 2022.

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Note 3 - Goodwill and Intangible Assets (Tables)

6 Months Ended

Jun. 30, 2022

Notes Tables

Schedule of Goodwill [Table Text Block]

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

	June 30, 2022		December 31, 2021
Opening balance		183,397		183,397
Impairment		-		-
Closing balance	$	183,397	$	183,397

Schedule of Finite-Lived Intangible Assets [Table Text Block]

	As of June 30, 2022
	Gross Intangibles		Accumulated Amortization		Net Intangibles		Weighted Average Amortization Period (years)
Customer relationships		66,220		24,670		41,550		6.5
Brand		49,500		16,892		32,608		7.1
Trademarks		13,210		3,476		9,734		7.5
Other intangibles		2,130		1,072		1,058		4.9
	$	131,060	$	46,110	$	84,950

	As of December 31, 2021
	Gross Intangibles		Accumulated Amortization		Net Intangibles		Weighted Average Amortization Period (years)
Customer relationships		66,220		21,887		44,333		6.5
Brand		49,500		15,074		34,426		7.1
Trademarks		13,210		3,036		10,174		7.5
Other intangibles		2,130		971		1,159		4.9
	$	131,060	$	40,968	$	90,092

Schedule of Finite-Lived Intangible Assets, Future Amortization Expense [Table Text Block]

Year ending December 31,	Amount
Remainder of 2022		5,175
2023		10,306
2024		10,252
2025		10,252
2026		9,490
Thereafter		39,475

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Note 4 - Revenue (Tables)

6 Months Ended

Jun. 30, 2022

Notes Tables

Disaggregation of Revenue [Table Text Block]

	Three Months Ended June 30,					Six Months Ended June 30,
Vertical	2022		2021			2022		2021
Telecom		60,694		53,611			116,746		105,285
E-commerce & Consumer		18,851		26,221			39,377		52,324
Media & Cable		15,927		23,778			32,869		49,572
Financial & Business Services		17,605		15,763			34,300		31,214
Travel & Hospitality		13,495		10,542			27,010		21,039
Healthcare & Education		7,363		40,018			18,826		57,705
Technology, IT & Related Services		5,112		4,858			10,457		9,939
Other verticals		28,594		14,645			55,373		25,853
Gross revenue		167,641		189,436			334,958		352,931
Less: Warrant contra revenue		-		(405	)		-		(830	)
Net revenue	$	167,641	$	189,031		$	334,958	$	352,101

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Note 5 - Net Income (Loss) Per Share (Tables)

6 Months Ended

Jun. 30, 2022

Notes Tables

Schedule of Earnings Per Share, Basic and Diluted [Table Text Block]

	Three Months Ended June 30,				Six Months Ended June 30,
	2022		2021		2022		2021
Shares used in basic earnings per share calculation		40,284		40,786		40,311		40,689
Effect of dilutive securities:
Stock options		24		436		55		-
Restricted stock/Deferred stock units		-		-		-		-
Total effects of dilutive securities		24		436		55		-
Shares used in dilutive earnings per share calculation		40,308		41,222		40,366		40,689

Schedule of Antidilutive Securities Excluded from Computation of Earnings Per Share [Table Text Block]

	Three Months Ended June 30,				Six Months Ended June 30,
	2022		2021		2022		2021
Anti-dilutive securities
Stock options		-		62		-		2,114

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Note 6 - Impairment Losses & Restructuring/Exit Cost (Tables)

6 Months Ended

Jun. 30, 2022

Notes Tables

Restructuring and Related Costs [Table Text Block]

	Employee related			Facilities related			Total
Balance on December 31, 2021		480			155			635
Accruals/(reversal)		1,820			332			2,152
Payments		(1,751	)		(465	)		(2,216	)
Balance as of June 30, 2022	$	549		$	22		$	571

	Employee related			Facilities related			Total
Balance on December 31, 2020		-			25			25
Accruals/(reversal)		3,519			193			3,712
Payments		(3,039	)		(63	)		(3,102	)
Balance on December 31, 2021	$	480		$	155		$	635

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Note 7 - Derivative Instruments (Tables)

6 Months Ended

Jun. 30, 2022

Notes Tables

Schedule of Cash Flow Hedges Included in Accumulated Other Comprehensive Income (Loss) [Table Text Block]

	Gain (Loss) Recognized in AOCI, net of tax				Gain (loss) reclassified from AOCI into Income
	Six Months Ended June 30, 2022		Six Months Ended June 30, 2021		Six Months Ended June 30, 2022		Six Months Ended June 30, 2021
Cash flow hedges
Foreign exchange contracts	$	-	$	-	$	-	$	8

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Note 9 - Debt (Tables)

6 Months Ended

Jun. 30, 2022

Notes Tables

Schedule of Debt [Table Text Block]

	June 30, 2022		December 31, 2021
Short term debt
Working capital facilities		5,112		3,611
Current portion of long term debt
Current maturity of term loan		14,438		4,125
Current maturity of equipment loan		1,663		1,682
Current maturity of finance lease obligations		174		434
Total	$	21,387		9,852
Long term debt
Term loan, net of debt issuance costs		148,516	$	158,543
Equipment loan		767		1,632
Finance lease obligations		-		-
Total	$	149,283	$	160,175

Contractual Obligation, Fiscal Year Maturity [Table Text Block]

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

Schedule of Debt Issuance Cost [Table Text Block]

	June 30, 2022			December 31, 2021
Opening balance		2,332			2,670
Add: Debt issuance cost (refinancing of term loan)		-			11,269
Less: Expensed out (ASC 470 - extinguishment or modification)		-			(10,937	)
Less: Amortization of debt issuance cost		(286	)		(670	)
Closing balance		2,046			2,332

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Note 11 - Accumulated Other Comprehensive Loss (Tables)

6 Months Ended

Jun. 30, 2022

Notes Tables

Comprehensive Income (Loss) [Table Text Block]

	Foreign Currency Translation Adjustments			Defined Benefit Plan			Equity attributable to Startek shareholders			Non-controlling interests			Total
Balance on December 31, 2021		(6,816	)		(3,871	)		(10,687	)		(3,887	)		(14,574	)
Foreign currency translation		(3,389	)		-			(3,389	)		-			(3,389	)
Reclassification to operations		-			-			-			-			-
Pension amortization		-			(312	)		(312	)		(374	)		(686	)
Balance at June 30, 2022	$	(10,205	)	$	(4,183	)	$	(14,388	)	$	(4,261	)	$	(18,649	)

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Note 12 - Segment Reporting (Tables)

6 Months Ended

Jun. 30, 2022

Notes Tables

Schedule of Segment Reporting Information, by Segment [Table Text Block]

	Three Months Ended				Six Months Ended
	June 30,				June 30,
	2022		2021		2022		2021
Revenue
Americas		41,952		84,680		87,367		148,605
India & Sri Lanka		26,264		24,079		54,224		45,561
Malaysia		11,431		13,816		22,711		28,781
Middle East		63,054		45,714		121,741		88,954
Argentina & Peru		9,321		9,143		17,626		17,302
Rest of World		15,619		11,599		31,289		22,898
Total	$	167,641	$	189,031	$	334,958	$	352,101

	Three Months Ended						Six Months Ended
	June 30,						June 30,
	2022			2021			2022			2021
Operating income (loss)
Americas		(316	)		5,369			(2,635	)		7,264
India & Sri Lanka		1,178			2,594			4,644			1,366
Malaysia		2,579			3,414			4,605			7,828
Middle East		2,103			3,009			6,404			8,750
Argentina & Peru		(949	)		(393	)		(3,269	)		(436	)
Rest of World		917			865			2,593			1,264
Segment operating income		5,512			14,858			12,342			26,036
Startek consolidation adjustments
Private offer transaction cost		(692	)		-			(1,192	)		-
Intangible amortization		(2,581	)		(2,583	)		(5,142	)		(5,143	)
Total operating income	$	2,239		$	12,275		$	6,008		$	20,893

	As on		As on
	June 30, 2022		December 31, 2021
Property, plant and equipment, net
Americas		10,838		11,335
India & Sri Lanka		9,908		8,712
Malaysia		2,558		2,818
Middle East		5,201		7,461
Argentina & Peru		1,219		1,453
Rest of World		2,770		2,389
Total	$	32,494	$	34,168

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Note 13 - Leases (Tables)

6 Months Ended

Jun. 30, 2022

Notes Tables

Lease, Cost [Table Text Block]

	Three Months Ended June 30, 2022		Three Months Ended June 30, 2021		Six Months Ended June 30, 2022		Six Months Ended June 30, 2021
Operating lease cost	$	5,722	$	6,479	$	11,585	$	13,288
Finance lease cost
Amortization of right-of-use assets		118		153		261		339
Interest on lease liabilities		5		15		65		32
Total finance lease cost	$	123	$	168	$	326	$	371

	Six Months Ended June 30, 2022		Six Months Ended June 30, 2021
Cash paid for amounts included in the measurement of lease liabilities
Operating cash flows from operating leases		12,647		13,246
Operating cash flow from finance leases		65		32
Financing cash flows from finance leases		260		371
Right-of-use assets obtained in exchange for lease obligations
Operating leases		2,498		2,105
Finance leases		-		-

Assets And Liabilities, Lessee [Table Text Block]

	As of June 30, 2022			As of December 31, 2021
Operating leases
Operating lease right-of-use assets	$	51,157		$	63,012
Operating lease liabilities - Current		22,710			24,393
Operating lease liabilities - Non-current		32,642			44,263
Total operating lease liabilities	$	55,352		$	68,656
Finance Leases
Property and equipment, at cost		4,118			4,128
Accumulated depreciation		(3,870	)		(3,641	)
Property and equipment, at net	$	248		$	487
Finance lease liabilities - Current		174			434
Finance lease liabilities - Non-current		-			-
Total finance lease liabilities	$	174		$	434

Weighted average remaining lease term	As of June 30, 2022			As of December 31, 2021
Operating leases (in years)	3.26 years			3.58 years
Finance leases (in years)	0.00 years			0.00 years
Weighted average discount rate
Operating leases		7.0	%		6.8	%
Finance leases		0.0	%		0.0	%

Finance Lease, Liability, Fiscal Year Maturity [Table Text Block]

	Operating Leases			Finance Leases
Year ending December 31,
Remainder of 2022		11,726			174
2023		20,100			-
2024		15,638			-
2025		9,291			-
2026		2,717			-
Thereafter		2,101			-
Total lease payments		61,573			174
Less: Imputed interest		(6,221	)		-
Total present value to lease liabilities	$	55,352		$	174

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Note 14 - Investment in Equity-accounted Investees (Tables)

6 Months Ended

Jun. 30, 2022

Notes Tables

Equity Method Investments [Table Text Block]

	% of ownership interest						Carrying amount
Name of entity	June 30, 2022			December 31, 2021			June 30, 2022		December 31, 2021
a) CSS Corp LP		61.35	%		61.35	%		35,513		31,688
b) Immaterial associates								-		-
Carrying amount of investment in equity-accounted investees								35,513		31,688

	Three months ended June 30, 2022		Three months ended June 30, 2021		Six months ended June 30, 2022		Six months ended June 30, 2021
Aggregate amounts of the group’s share of income (loss) of equity-accounted investees		3,833		59		3,825		45

Summarized financial position
	June 30, 2022			December 31, 2021
Current assets		34			42
Non-current assets		57,964			51,690
Current and non-current liabilities		(111	)		(80	)
Net assets		57,887			51,652
		-			-
Company share in %		61.35	%		61.35	%
Company share		35,513			31,688
Carrying amount of investment in equity-accounted investee		35,513			31,688

Reconciliation to carrying amounts
	June 30, 2022		December 31, 2021
Opening net assets		31,688		-
Acquired during the year		-		25,000
Share of income of equity-accounted investees		3,825		6,688
Other comprehensive income		-		-
		35,513		31,688

Summarized statement of comprehensive income
	Three months ended June 30, 2022			Three months ended June 30, 2021			Six months ended June 30, 2022			Six months ended June 30, 2021
Revenue		-			-			-			-
Cost of services		-			-			-			-
Gross profit		-			-			-			-
Selling, general and administrative expenses		(26	)		(34	)		(34	)		(54	)
Operating loss		(26	)		(34	)		(34	)		(54	)
Unrealised gain on investment		6,273			139			6,268			139
Net income		6,247			105			6,234			85
Other comprehensive income		-			-			-			-
Total comprehensive income for the period		6,247			105			6,234			85
Aggregate amounts of the Company share of income of equity-accounted investee at 61.35%		3,833			64			3,825			52

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Note 15 - Common Stock (Tables)

6 Months Ended

Jun. 30, 2022

Notes Tables

Class of Treasury Stock [Table Text Block]

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
April 30, 2022		-		-		-		831,229
May 31, 2022		20,000		3.15		20,000		768,156
June 30, 2022		-		-		-		768,156
Total		279,407				279,407

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Note 2 - Summary of Significant Accounting Policies (Details Textual) - USD ($) $ in Thousands	3 Months Ended	6 Months Ended		12 Months Ended
	Dec. 31, 2021	Jun. 30, 2022	Jun. 30, 2021	Dec. 31, 2021
Amortization of Debt Issuance Costs		$ 286	$ 11,302
Net Cash Provided by (Used in) Operating Activities, Total		8,706	11,478
Net Cash Provided by (Used in) Financing Activities, Total		$ (634)	$ 27,983
Revision of Prior Period, Adjustment [Member] | Correction to Debt Issuance Costs From Income to Cash Flow Statements [Member]
Amortization of Debt Issuance Costs	$ 8,475,000
Revision of Prior Period, Adjustment [Member] | Aggregate Change From Reclassifications [Member]
Net Cash Provided by (Used in) Operating Activities, Total				$ 8,475,000
Net Cash Provided by (Used in) Financing Activities, Total				$ (8,475,000)

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Note 3 - Goodwill and Intangible Assets (Details Textual) $ in Thousands	6 Months Ended
	Jun. 30, 2022 USD ($)
Goodwill Impairment Analysis, Period for Which Revenue, Operating Margins and Cash Flows Are Projected (Year)	5 years
Impairment of Intangible Assets, Finite-lived	$ 0

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Note 3 - Goodwill and Intangible Assets - Goodwill (Details) - USD ($) $ in Thousands	6 Months Ended	12 Months Ended
	Jun. 30, 2022	Dec. 31, 2021
Goodwill	$ 183,397	$ 183,397
Opening balance	183,397	183,397
Impairment	0	0
Americas [Member]
Goodwill	64,315	64,315
Opening balance	64,315
INDIA
Goodwill	12,554	12,554
Opening balance	12,554
Malaysia 1 [Member]
Goodwill	47,543	47,543
Opening balance	47,543
SAUDI ARABIA
Goodwill	54,840	54,840
Opening balance	54,840
AUSTRALIA
Goodwill	4,145	$ 4,145
Opening balance	$ 4,145

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Note 3 - Goodwill and Intangible Assets - Summary of Intangible Assets (Details) - USD ($) $ in Thousands	6 Months Ended	12 Months Ended
	Jun. 30, 2022	Dec. 31, 2021
Gross Intangibles	$ 131,060	$ 131,060
Accumulated Amortization	46,110	40,968
Net Intangibles	84,950	90,092
Customer Relationships [Member]
Gross Intangibles	66,220	66,220
Accumulated Amortization	24,670	21,887
Net Intangibles	$ 41,550	$ 44,333
Weighted Average Amortization Period (Year)	6 years 6 months	6 years 6 months
Brand [Member]
Gross Intangibles	$ 49,500	$ 49,500
Accumulated Amortization	16,892	15,074
Net Intangibles	$ 32,608	$ 34,426
Weighted Average Amortization Period (Year)	7 years 1 month 6 days	7 years 1 month 6 days
Trademarks [Member]
Gross Intangibles	$ 13,210	$ 13,210
Accumulated Amortization	3,476	3,036
Net Intangibles	$ 9,734	$ 10,174
Weighted Average Amortization Period (Year)	7 years 6 months	7 years 6 months
Other Intangible Assets [Member]
Gross Intangibles	$ 2,130	$ 2,130
Accumulated Amortization	1,072	971
Net Intangibles	$ 1,058	$ 1,159
Weighted Average Amortization Period (Year)	4 years 10 months 24 days	4 years 10 months 24 days

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Note 3 - Goodwill and Intangible Assets - Expected Future Amortization of Intangible Assets (Details) $ in Thousands	Jun. 30, 2022 USD ($)
Remainder of 2022	$ 5,175
2023	10,306
2024	10,252
2025	10,252
2026	9,490
Thereafter	$ 39,475

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Note 4 - Revenue - Disaggregated Revenue (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2022	Jun. 30, 2021	Jun. 30, 2022	Jun. 30, 2021
Revenue	$ 167,641	$ 189,436	$ 334,958	$ 352,931
Revenue	167,641	189,436	334,958	352,931
Warrant adjustment	0	(405)	0	(830)
Net revenue	167,641	189,031	334,958	352,101
Communications [Member]
Revenue	60,694	53,611	116,746	105,285
Revenue	60,694	53,611	116,746	105,285
E-Commerce and Consumer [Member]
Revenue	18,851	26,221	39,377	52,324
Revenue	18,851	26,221	39,377	52,324
Media [Member]
Revenue	15,927	23,778	32,869	49,572
Revenue	15,927	23,778	32,869	49,572
Financial and Business Service [Member]
Revenue	17,605	15,763	34,300	31,214
Revenue	17,605	15,763	34,300	31,214
Travel and Hospitality [Member]
Revenue	13,495	10,542	27,010	21,039
Revenue	13,495	10,542	27,010	21,039
Health Care and Education [Member]
Revenue	7,363	40,018	18,826	57,705
Revenue	7,363	40,018	18,826	57,705
Technology, IT and Related Service [Member]
Revenue	5,112	4,858	10,457	9,939
Revenue	5,112	4,858	10,457	9,939
Other Sector [Member]
Revenue	28,594	14,645	55,373	25,853
Revenue	$ 28,594	$ 14,645	$ 55,373	$ 25,853

XML

Note 5 - Net Income (Loss) Per Share - Basic and Diluted Earnings Per Share (Details) - shares shares in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2022	Jun. 30, 2021	Jun. 30, 2022	Jun. 30, 2021
Basic (in shares)	40,284	40,786	40,311	40,689
Total effects of dilutive securities (in shares)	24	436	55	0
Shares used in dilutive earnings per share calculation (in shares)	40,308	41,222	40,366	40,689
Share-Based Payment Arrangement, Option [Member]
Effect of dilutive securities (in shares)	24	436	55	0
Restricted Stock/Deferred Stock Units [Member]
Effect of dilutive securities (in shares)	0	0	0	0

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Note 5 - Net Income (Loss) Per Share - Summary of Anti-dilutive Securities (Details) - shares shares in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2022	Jun. 30, 2021	Jun. 30, 2022	Jun. 30, 2021
Stock Options and Warrants [Member]
Stock options (in shares)	0	62	0	2,114

XML

Note 6 - Impairment Losses & Restructuring/Exit Cost (Details Textual) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended	12 Months Ended
	Dec. 31, 2022	Sep. 30, 2022	Jun. 30, 2022	Dec. 31, 2021
Payments for Restructuring			$ 2,216	$ 3,102
Employee Severance [Member]
Payments for Restructuring			1,751	3,039
Facility Closing [Member]
Payments for Restructuring			$ 465	$ 63
Forecast [Member] | Employee Severance [Member]
Payments for Restructuring	$ 549
Forecast [Member] | Facility Closing [Member]
Payments for Restructuring		$ 22

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Note 6 - Impairment Losses & Restructuring Exit Cost - Restructuring and Related Costs (Details) - USD ($) $ in Thousands	6 Months Ended	12 Months Ended
	Jun. 30, 2022	Dec. 31, 2021
Balance	$ 635	$ 25
Accruals/(reversal)	2,152	3,712
Payments	(2,216)	(3,102)
Ending balance	571	635
Employee Severance [Member]
Balance	480	0
Accruals/(reversal)	1,820	3,519
Payments	(1,751)	(3,039)
Ending balance	549	480
Facility Closing [Member]
Balance	155	25
Accruals/(reversal)	332	193
Payments	(465)	(63)
Ending balance	$ 22	$ 155

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Note 7 - Derivative Instruments (Details Textual) - Designated as Hedging Instrument [Member] - Cash Flow Hedging [Member] - Foreign Exchange Contract [Member]	6 Months Ended
	Jun. 30, 2022
Minimum [Member]
Derivative, Term of Contract (Month)	3 months
Maximum [Member]
Derivative, Term of Contract (Month)	12 months

XML

Note 7 - Derivative Instruments - Effect of Derivative Instruments Designated as Cash Flow Hedges (Details) - Designated as Hedging Instrument [Member] - Cash Flow Hedging [Member] - Foreign Exchange Contract [Member] - USD ($) $ in Thousands	6 Months Ended
	Jun. 30, 2022	Jun. 30, 2021
Gain (Loss) Recognized in AOCI, net of tax	$ 0	$ 0
Gain/ (Loss) Reclassified from AOCI into Income	$ 0	$ 8

XML

Note 9 - Debt (Details Textual) - USD ($) $ in Thousands		6 Months Ended
	Feb. 18, 2021	Jun. 30, 2022	Dec. 31, 2021	Dec. 31, 2020	Nov. 02, 2020	Dec. 27, 2018
Short-Term Debt, Total		$ 5,112	$ 3,611
Loans Payable [Member] | London Interbank Offered Rate (LIBOR) [Member]
Debt Instrument, Basis Spread on Variable Rate		4.50%
Senior Debt Facility [Member]
Debt Instrument, Face Amount	$ 185,000
Debt Issuance Costs, Net, Total		$ 2,046	2,332	$ 2,670
Senior Debt Facility [Member] | At 21 and 24 Months From Closing [Member]
Debt Instrument, Amortization, Percent	2.50%
Senior Debt Facility [Member] | At 27, 30, 33, and 36 Months From Closing [Member]
Debt Instrument, Amortization, Percent	3.75%
Senior Debt Facility [Member] | At 39, 42, 45, 48, and 51 Months From Closing [Member]
Debt Instrument, Amortization, Percent	5.00%
Senior Debt Facility [Member] | At 54 Months From Closing [Member]
Debt Instrument, Amortization, Percent	10.00%
Senior Debt Facility [Member] | At 57 Months From Closing [Member]
Debt Instrument, Amortization, Percent	15.00%
Senior Debt Facility [Member] | London Interbank Offered Rate (LIBOR) [Member]
Debt Instrument, Basis Spread on Variable Rate	4.50%
Senior Debt Facility [Member] | Revolving Credit Facility [Member]
Line of Credit Facility, Maximum Borrowing Capacity	$ 20,000
Senior Debt Facility [Member] | Loans Payable [Member]
Debt Instrument, Face Amount	165,000
Debt Issuance Costs, Net, Total	11,300
Interest Expense, Debt, Total	8,500
Senior Term Agreement [Member] | Loans Payable [Member]
Debt Issuance Costs, Net, Total	2,800	2,100
Interest Expense, Debt, Total	$ 2,500
Non-recourse Factoring [Member]
Long-Term Debt, Gross		21,100	$ 21,600
BMO Equipment Loan [Member] | Secured Debt [Member]
Debt Instrument, Face Amount						$ 2,060
Debt Instrument, Interest Rate, Stated Percentage						7.57%
Long-term Debt, Term (Year)						2 years 6 months
Equipment Loan [Member] | Secured Debt [Member]
Debt Instrument, Face Amount					$ 4,000
Long-Term Debt, Gross		$ 2,100
Debt Instrument, Interest Rate, Stated Percentage					5.27%
Long-term Debt, Term (Year)					34 months
Minimum [Member] | Loans Payable [Member] | London Interbank Offered Rate (LIBOR) [Member]
Debt Instrument, Basis Spread on Variable Rate		3.75%
Maximum [Member] | Loans Payable [Member] | London Interbank Offered Rate (LIBOR) [Member]
Debt Instrument, Basis Spread on Variable Rate		4.50%
Line of Credit [Member]
Line of Credit Facility, Maximum Borrowing Capacity		$ 30,000
Short-Term Debt, Total		$ 5,100
Line of Credit [Member] | Minimum [Member]
Debt Instrument, Basis Spread on Variable Rate		3.00%
Line of Credit [Member] | Maximum [Member]
Debt Instrument, Basis Spread on Variable Rate		4.50%

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Note 9 - Debt - Summary of Debt (Details) - USD ($) $ in Thousands	Jun. 30, 2022	Dec. 31, 2021
Short-Term Debt, Total	$ 5,112	$ 3,611
Current maturity of term loan	16,274	6,241
Current maturity of equipment loan	16,274	6,241
Total current debt	21,387	9,852
Long term debt	149,283	160,175
Long term debt	149,283	160,175
Loans Payable [Member]
Current maturity of term loan	14,438	4,125
Current maturity of equipment loan	14,438	4,125
Long term debt	148,516	158,543
Long term debt	148,516	158,543
Secured Debt [Member]
Current maturity of term loan	1,663	1,682
Current maturity of equipment loan	1,663	1,682
Long term debt	767	1,632
Long term debt	767	1,632
Finance Lease Obligations [Member]
Current maturity of term loan	174	434
Current maturity of equipment loan	174	434
Long term debt	0	0
Long term debt	0	0
Working Capital Facilities [Member]
Short-Term Debt, Total	$ 5,112	$ 3,611

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Note 9 - Debt - Principal Payments Due on Term Loan (Details) $ in Thousands	Jun. 30, 2022 USD ($)
Remainder of 2022	$ 4,125
Total	165,000
Loans Payable [Member]
2023	22,688
2024	30,937
2025	57,750
2026	$ 49,500

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Note 9 - Debt - Debt Issuance Cost (Details) - USD ($) $ in Thousands	6 Months Ended		12 Months Ended
	Jun. 30, 2022	Jun. 30, 2021	Dec. 31, 2021
Less: Amortization of debt issuance cost	$ (286)	$ (11,302)
Senior Debt Facility [Member]
Opening balance	2,332	$ 2,670	$ 2,670
Add: Debt issuance cost (refinancing of term loan)	0		11,269
Less: Expensed out (ASC 470 - extinguishment or modification)	0		(10,937)
Less: Amortization of debt issuance cost	(286)		(670)
Closing balance	$ 2,046		$ 2,332

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Note 10 - Share-based Compensation (Details Textual) - USD ($) $ in Thousands	6 Months Ended
	Jun. 30, 2022	Jan. 23, 2018
Share-Based Payment Arrangement, Option [Member]
Share-Based Payment Arrangement, Nonvested Award, Option, Cost Not yet Recognized, Amount	$ 3,160
Share-Based Payment Arrangement, Nonvested Award, Cost Not yet Recognized, Period for Recognition (Year)	2 years 4 months 24 days
Selling, General and Administrative Expenses [Member]
Share-Based Payment Arrangement, Expense	$ 833
Amazon Transaction Agreement [Member]
Class of Warrant or Right, Outstanding (in shares)		4,000,000

XML

Note 11 - Accumulated Other Comprehensive Loss - Summary of Accumulated Other Comprehensive Loss (Details) $ in Thousands	6 Months Ended
	Jun. 30, 2022 USD ($)
Accumulated Foreign Currency Adjustment Attributable to Parent [Member]
Balance	$ (6,816)
Foreign currency translation	(3,389)
Reclassification to operations	0
Pension amortization	0
Balance	(10,205)
Accumulated Gain (Loss), Net, Cash Flow Hedge, Parent [Member]
Balance	(3,871)
Foreign currency translation	0
Reclassification to operations	0
Pension amortization	(312)
Balance	(4,183)
Accumulated Defined Benefit Plans Adjustment Attributable to Parent [Member]
Balance	(10,687)
Foreign currency translation	(3,389)
Reclassification to operations	0
Pension amortization	(312)
Balance	(14,388)
AOCI Attributable to Noncontrolling Interest [Member]
Balance	(3,887)
Foreign currency translation	0
Reclassification to operations	0
Pension amortization	(374)
Balance	(4,261)
AOCI Including Portion Attributable to Noncontrolling Interest [Member]
Balance	(14,574)
Foreign currency translation	(3,389)
Reclassification to operations	0
Pension amortization	(686)
Balance	$ (18,649)

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Note 12 - Segment Reporting (Details Textual) $ in Thousands		3 Months Ended		6 Months Ended
	Feb. 25, 2021 USD ($)	Jun. 30, 2022	Jun. 30, 2021	Jun. 30, 2022 USD ($)	Jun. 30, 2021 USD ($)
Number of Reportable Segments				6
Payments to Acquire Equity Method Investments				$ (0)	$ 25,000
CSS Corp. [Member]
Payments to Acquire Equity Method Investments	$ 25,000
Revenue from Contract with Customer Benchmark [Member] | Customer Concentration Risk [Member] | Customer One [Member]
Concentration Risk, Percentage		19.00%	16.00%	18.00%	17.00%

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Note 12 - Segment Reporting - Summary of Segment Reporting Information, By Segment (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2022	Jun. 30, 2021	Jun. 30, 2022	Jun. 30, 2021	Dec. 31, 2021
Revenue	$ 167,641	$ 189,031	$ 334,958	$ 352,101
Operating loss	2,239	12,275	6,008	20,893
Private offer transaction cost	(692)	0	(1,192)	0
Property, plant and equipment, net	32,494		32,494		$ 34,168
Operating Segments [Member]
Operating loss	5,512	14,858	12,342	26,036
Segment Reconciling Items [Member]
Intangible amortization	(2,581)	(2,583)	(5,142)	(5,143)
Americas [Member]
Property, plant and equipment, net	10,838		10,838		11,335
Americas [Member] | Operating Segments [Member]
Revenue	41,952	84,680	87,367	148,605
Operating loss	(316)	5,369	(2,635)	7,264
India and Sri Lanka [Member]
Property, plant and equipment, net	9,908		9,908		8,712
India and Sri Lanka [Member] | Operating Segments [Member]
Revenue	26,264	24,079	54,224	45,561
Operating loss	1,178	2,594	4,644	1,366
Malaysia 1 [Member]
Property, plant and equipment, net	2,558		2,558		2,818
Malaysia 1 [Member] | Operating Segments [Member]
Revenue	11,431	13,816	22,711	28,781
Operating loss	2,579	3,414	4,605	7,828
Middle East [Member]
Property, plant and equipment, net	5,201		5,201		7,461
Middle East [Member] | Operating Segments [Member]
Revenue	63,054	45,714	121,741	88,954
Operating loss	2,103	3,009	6,404	8,750
Argentina and Peru [Member]
Property, plant and equipment, net	1,219		1,219		1,453
Argentina and Peru [Member] | Operating Segments [Member]
Revenue	9,321	9,143	17,626	17,302
Operating loss	(949)	(393)	(3,269)	(436)
Rest of World [Member]
Property, plant and equipment, net	2,770		2,770		$ 2,389
Rest of World [Member] | Operating Segments [Member]
Revenue	15,619	11,599	31,289	22,898
Operating loss	$ 917	$ 865	$ 2,593	$ 1,264

XML

Note 13 - Leases (Details Textual)	6 Months Ended
	Jun. 30, 2022
Lessee, Lease, Termination Period (Year)	1 year
Minimum [Member]
Lease, Remaining Lease Term (Year)	1 year
Lessee, Lease, Renewal Term (Year)	3 years
Maximum [Member]
Lease, Remaining Lease Term (Year)	10 years
Lessee, Lease, Renewal Term (Year)	5 years

XML

Note 13 - Leases - Components of Lease Expense (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2022	Jun. 30, 2021	Jun. 30, 2022	Jun. 30, 2021
Operating lease cost	$ 5,722	$ 6,479	$ 11,585	$ 13,288
Amortization of right-of-use assets	118	153	261	339
Interest on lease liabilities	5	15	65	32
Total finance lease cost	$ 123	$ 168	326	371
Operating cash flows from operating leases			12,647	13,246
Operating cash flow from finance leases			65	32
Financing cash flows from finance leases			260	371
Operating leases			2,498	2,105
Finance leases			$ 0	$ 0

XML

Note 13 - Leases - Supplemental Balance Sheet Information (Details) - USD ($) $ in Thousands	Jun. 30, 2022	Dec. 31, 2021
Operating lease right-of-use assets	$ 51,157	$ 63,012
Operating lease liabilities - Current	22,710	24,393
Operating lease liabilities - Non-current	32,642	44,263
Total operating lease liabilities	55,352	68,656
Finance lease liabilities - Non-current	0	$ 0
Total finance lease liabilities	$ 174
Operating leases (Year)	3 years 3 months 3 days	3 years 6 months 29 days
Finance leases (Year)	0 years	0 years
Operating leases	7.00%	6.80%
Finance leases	0.00%	0.00%
Property, Plant and Equipment, Net [Member]
Property and equipment, at cost	$ 4,118	$ 4,128
Accumulated depreciation	(3,870)	(3,641)
Property and equipment, at net	248	487
Current Maturities of Long-term Debt [Member]
Finance lease liabilities - Current	174	434
Total finance lease liabilities	$ 174	$ 434

XML

Note 13 - Leases - Maturities of Lease Liabilities (Details) - USD ($) $ in Thousands	Jun. 30, 2022	Dec. 31, 2021
Remainder of 2022, Operating leases	$ 11,726
Remainder of 2022, Finance leases	174
2023, Operating leases	20,100
2023, Finance leases	0
2024, Operating leases	15,638
2024, Finance leases	0
2025, Operating leases	9,291
2025, Finance leases	0
2026, Operating leases	2,717
2026, Finance leases	0
Thereafter, Operating leases	2,101
Thereafter, Finance leases	0
Total lease payments, Operating leases	61,573
Total lease payments, Finance leases	174
Less imputed interest, Operating leases	(6,221)
Less imputed interest, Finance leases	0
Total present value to lease liabilities	55,352	$ 68,656
Total present value to lease liabilities	$ 174

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Note 14 - Investment in Equity-accounted Investees (Details Textual) - USD ($) $ in Thousands		3 Months Ended		6 Months Ended
	Feb. 25, 2021	Jun. 30, 2022	Jun. 30, 2021	Jun. 30, 2022	Jun. 30, 2021	Dec. 31, 2021
Payments to Acquire Equity Method Investments				$ (0)	$ 25,000
Income (Loss) from Equity Method Investments		$ 3,833	$ 59	$ 3,825	$ 45
CSP Management Limited [Member]
Payments to Acquire Call Options	$ 5,000
CSS Corp. [Member]
Payments to Acquire Equity Method Investments	$ 25,000
Equity Method Investment, Ownership Percentage	26.00%
CSS Corp LP [Member]
Payments to Acquire Equity Method Investments	$ 25,000
Equity Method Investment, Ownership Percentage	62.50%	61.35%		61.35%		61.35%
Queensland Partnership Group Pty. Ltd. [Member]
Equity Method Investment, Ownership Percentage		33.33%		33.33%
Services Queensland Partnership [Member]
Equity Method Investment, Ownership Percentage		16.67%		16.67%
Investment in Individually Immaterial Associate [Member]
Income (Loss) from Equity Method Investments		$ 5		$ 7

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Note 14 - Investment in Equity-accounted Investees - Equity-accounted Investees (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended		12 Months Ended
	Jun. 30, 2022	Jun. 30, 2021	Jun. 30, 2022	Jun. 30, 2021	Dec. 31, 2021	Feb. 25, 2021
Carrying amount of investment in equity-accounted investees	$ 35,513		$ 35,513		$ 31,688
Aggregate amounts of the group’s share of income (loss) of equity-accounted investees	3,833	$ 59	3,825	$ 45
Current assets	227,019		227,019		225,018
Non-current assets	400,562		400,562		417,457
Current and non-current liabilities	(375,677)		(375,677)		$ (389,155)
Other comprehensive income	(3,486)	(913)	(4,075)	(2,381)
Gross profit	16,727	24,554	37,784	49,241
Selling, general and administrative expenses	(13,743)	(12,298)	(29,624)	(26,469)
Operating loss	2,239	12,275	6,008	20,893
Net income	1,867	6,885	624	(5,270)
Total comprehensive income for the period	$ (858)	7,207	$ (1,161)	(4,116)
CSS Corp LP [Member]
% of ownership interest	61.35%		61.35%		61.35%	62.50%
Carrying amount of investment in equity-accounted investees	$ 35,513		$ 35,513		$ 31,688
Aggregate amounts of the group’s share of income (loss) of equity-accounted investees	3,833	64	3,825	52
Net assets	57,887		57,887		51,652
Opening net assets			51,652
Net Assets, Ending Balance	57,887		57,887		51,652
Immaterial Associates [Member]
Carrying amount of investment in equity-accounted investees					0
CSS Corp LP [Member]
Aggregate amounts of the group’s share of income (loss) of equity-accounted investees			3,825		6,688
Current assets	34		34		42
Non-current assets	57,964		57,964		51,690
Current and non-current liabilities	(111)		(111)		(80)
Net assets	35,513		35,513		31,688
Opening net assets			31,688	0	0
Acquired during the year			0		25,000
Other comprehensive income	0	0	0	0	0
Net Assets, Ending Balance	35,513		35,513		31,688
Cost of services	0	0	0	0
Gross profit	0	0	0	0
Operating loss	(26)	(34)	(34)	(54)
Unrealised gain on investment	6,273	139	6,268	139
Net income	6,247	105	6,234	85
Total comprehensive income for the period	6,247	105	6,234	85
CSS Corp LP [Member] | Selling, General and Administrative Expenses [Member]
Selling, general and administrative expenses	$ (26)	$ (34)	(34)	$ (54)
CSS Corp LP [Member] | CSS Corp LP [Member]
Net assets					31,688
Opening net assets			$ 31,688
Net Assets, Ending Balance					$ 31,688

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Note 15 - Common Stock (Details Textual) - USD ($) $ / shares in Units, $ in Millions									6 Months Ended
	Jun. 30, 2022	May 31, 2022	Apr. 30, 2022	Mar. 31, 2022		Feb. 28, 2022	Jan. 31, 2022		Jun. 30, 2022	Dec. 14, 2021	Aug. 26, 2021	Dec. 31, 2004
Treasury Stock, Shares, Acquired (in shares)	0	20,000	0	52,739		75,865	130,803		279,407
Treasury Stock Acquired, Average Cost Per Share (in dollars per share)	$ 0	$ 3.15	$ 0	$ 4.36	[1]	$ 4.90	$ 5.08	[1]
Repurchase Plan [Member]
Stock Repurchase Program, Authorized Amount										$ 2	$ 2	$ 25
Treasury Stock, Shares, Acquired (in shares)	0	20,000	0	52,739		75,865	130,803		279,407
Treasury Stock Acquired, Average Cost Per Share (in dollars per share)									$ 4.75

[1] Excludes broker commission.

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Note 15 - Common Stock - Stock Repurchase Activity (Details) - USD ($)									6 Months Ended
	Jun. 30, 2022	May 31, 2022	Apr. 30, 2022	Mar. 31, 2022		Feb. 28, 2022	Jan. 31, 2022		Jun. 30, 2022
Total Number of Shares Purchased (in shares)	0	20,000	0	52,739		75,865	130,803		279,407
Average Price Paid per Share (in dollars per share)	$ 0	$ 3.15	$ 0	$ 4.36	[1]	$ 4.90	$ 5.08	[1]
Repurchase Plan [Member]
Total Number of Shares Purchased (in shares)	0	20,000	0	52,739		75,865	130,803		279,407
Average Price Paid per Share (in dollars per share)									$ 4.75
Maximum Dollar Value that May Yet be Purchased Under the Programs	$ 768,156	$ 768,156	$ 831,229	$ 831,229		$ 1,061,426	$ 1,432,822		$ 768,156

[1] Excludes broker commission.

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Note 16 - Private Offer Transaction Cost (Details Textual) - USD ($) $ / shares in Units, $ in Millions	6 Months Ended
	Jun. 30, 2022	Jan. 17, 2022
Share Price (in dollars per share)		$ 5.40
Selling, General and Administrative Expenses [Member]
Private Offer Transaction Costs	$ 1,192
CSP Management Limited [Member] | StarTek [Member]
Noncontrolling Interest, Ownership Percentage by Noncontrolling Owners		56.00%