Covenant Logistics Group Inc

ITEM 1A.

RISK FACTORS

While we attempt to identify, manage, and mitigate risks and uncertainties associated with our business, some level of risk and uncertainty will always be present. Our Form 10-KQ for the year ended December 31, 2024, in the section entitled "Item 1A. Risk Factors," describes some of the risks and uncertainties associated with our business. The information presented below supplements such risk factors. We are amending and restating in its entirety the risk factor entitled Litigation may adversely affect our business, financial condition, and results of operations from our Annual Report Form 10-K for the year ended December 31quarter ended June 30, 2024, as set forth below. The risk factor set forth below should be read in conjunction with the risk factors included in 5 and our Annual Report on Form 10 -K for the year ended December 31, 2024. These risks and uncertainties have the potential to materially affect our business, financial condi, in the section, results of operations, cash flows, projected results, and future prospects.

Litigation may adversely affect our business, financial condition, and results of operations.

Our business is subject to the risk of litigation by employees, independent contracts entitled "Item 1A. Risk Factors, customers, vendors, government agencies, stockholders, and other parties through private actions, class actions, administrative proceedings, regulatory actions, and other processes. Recently, trucking companies, including us, have been and currently are subject to lawsuits, including class action lawsuits, alleging violations of various federal and state wage and hour laws regarding, among other things, employee meal breaks, rest periods, overtime eligibility, and failure to pay for all hours worked. A number of these lawsuits have resulted in the payment of substantial settlements or damages by the defendants. We operate a business that hauls arms, ammunitions, and explosives that could increase our exposure if there were an accident involving this freight.

The outcome of litigation, particularly class action lawsuits and regulatory actions, is difficult to assess or quantify, and the magnitude of " describe some of the risks and uncertainties associated with our business. These risks and uncertainties have the potential loss relating to such lawsuits may remain unknown for substantto material periods of time. The cost to defend litigation maly also be significant. Not all claims are covered by our insurance, and there can be no assurance that our coverage limits will be adequate to cover all amounts in dispute. Additionally, our premiums for certain insurance layers are subject to upward adjustments based on claims experience. To the extent we experience claims that are uninsured, exceed our coverage limits, involve significant aggregate use of our self-insured retention amounts, or cause increases in our insurance premiums, it could lead to increased volatility in our insurance and claims expense and any resulting increases in such expenses could have a materially adverse effect on our businessffect our business, financial condition, results of operations, financial condition, or cacash flows.

In addition, we may be subject, and have been subject in the past, to litigation resulting from trucking accidents. The number and severity of litigation claims may be worsened by distract, projected driving by both truck drivers and other motorists. These lawsuits have resultedresults, and may result in the future, in the payment of substantial settlements or damages and increases of our insurance cos prospects.

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