0001437749-22-019356 | 10-Q | XBRL Viewer

Document And Entity Information - shares	6 Months Ended
Document And Entity Information - shares	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

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

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)

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

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

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

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

Note 5 - Net Income (Loss) Per Share

6 Months Ended

Jun. 30, 2022

Notes to Financial Statements

Earnings Per Share [Text Block]

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

2,114

Note 7 - Derivative Instruments

6 Months Ended

Jun. 30, 2022

Notes to Financial Statements

Derivative Instruments and Hedging Activities Disclosure [Text Block]

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

Note 8 - Fair Value Measurements

6 Months Ended

Jun. 30, 2022

Notes to Financial Statements

Fair Value Disclosures [Text Block]

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.

- Definition

The entire disclosure for the fair value of financial instruments (as defined), including financial assets and financial liabilities (collectively, as defined), and the measurements of those instruments as well as disclosures related to the fair value of non-financial assets and liabilities. Such disclosures about the financial instruments, assets, and liabilities would include: (1) the fair value of the required items together with their carrying amounts (as appropriate); (2) for items for which it is not practicable to estimate fair value, disclosure would include: (a) information pertinent to estimating fair value (including, carrying amount, effective interest rate, and maturity, and (b) the reasons why it is not practicable to estimate fair value; (3) significant concentrations of credit risk including: (a) information about the activity, region, or economic characteristics identifying a concentration, (b) the maximum amount of loss the entity is exposed to based on the gross fair value of the related item, (c) policy for requiring collateral or other security and information as to accessing such collateral or security, and (d) the nature and brief description of such collateral or security; (4) quantitative information about market risks and how such risks are managed; (5) for items measured on both a recurring and nonrecurring basis information regarding the inputs used to develop the fair value measurement; and (6) for items presented in the financial statement for which fair value measurement is elected: (a) information necessary to understand the reasons for the election, (b) discussion of the effect of fair value changes on earnings, (c) a description of [similar groups] items for which the election is made and the relation thereof to the balance sheet, the aggregate carrying value of items included in the balance sheet that are not eligible for the election; (7) all other required (as defined) and desired information.

+ References + Details

Note 9 - Debt

6 Months Ended

Jun. 30, 2022

Notes to Financial Statements

Debt Disclosure [Text Block]

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

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.

- Definition

The entire disclosure for information about short-term and long-term debt arrangements, which includes amounts of borrowings under each line of credit, note payable, commercial paper issue, bonds indenture, debenture issue, own-share lending arrangements and any other contractual agreement to repay funds, and about the underlying arrangements, rationale for a classification as long-term, including repayment terms, interest rates, collateral provided, restrictions on use of assets and activities, whether or not in compliance with debt covenants, and other matters important to users of the financial statements, such as the effects of refinancing and noncompliance with debt covenants.

+ References

Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 470
-URI https://asc.fasb.org/topic&trid=2208564

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+ Details

Note 10 - Share-based Compensation

6 Months Ended

Jun. 30, 2022

Notes to Financial Statements

Share-Based Payment Arrangement [Text Block]

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.

Note 11 - Accumulated Other Comprehensive Loss

6 Months Ended

Jun. 30, 2022

Notes to Financial Statements

Comprehensive Income (Loss) Note [Text Block]

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	)

Note 12 - Segment Reporting

6 Months Ended

Jun. 30, 2022

Notes to Financial Statements

Segment Reporting Disclosure [Text Block]

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.

- Definition

The entire disclosure for reporting segments including data and tables. Reportable segments include those that meet any of the following quantitative thresholds a) it's reported revenue, including sales to external customers and intersegment sales or transfers is 10 percent or more of the combined revenue, internal and external, of all operating segments b) the absolute amount of its reported profit or loss is 10 percent or more of the greater, in absolute amount of 1) the combined reported profit of all operating segments that did not report a loss or 2) the combined reported loss of all operating segments that did report a loss c) its assets are 10 percent or more of the combined assets of all operating segments.

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+ Details