Exela Technologies, Inc.

Item 1A. Risk Factors.

In addition toExcept for the other information set forthrisk factor in this quarterly report, you should carefully consider tcluded below, there have been no material changes to the risk factors describpreviously disclosed in Part I, Item 1A. Risk Factors in the 2023 Form 10K, which could ma and in our Quarterially affect our business, financial condition and/or operating results. Tly Report on Form 10-Q for the

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quarisks described in those Risk Factors are not the only risks facing usterly period ended June 30, 2024. Additional risks and uncertainties not currently known to us or that we currently deem to be immaterial also may materially and adversely affect our business, financial condition and/or operating results.

Our securities mayhave been delisted from Nasdaq

Our Common Stock is currently listed for trading on the Nasdaq, and the continued listing of our Common Stock on t and experience the Nasdaq is subject to our compliance with a number of listing standards, including Nasdaq Listirisks of trading Rule 5550(b)(2), which requires that the Company maintain a market value of listed securities (MVLS) of at least $35

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millioin an over-the-coun (the MVLS requirement). ter market.

On November 136, 2023, the Company 4, we received a notice (the MVLS Nwritten notice)fication from Nasdaq notifying it tthat it was not in compliance with Nasdaq Listithey would suspend trading Rule 5550(b)(2) because, for the last 30 consecutive business days, thof our common stock and Series B Cumulative Companys MVLS was below the minimum requirement of $35 million. In nvertible Perpetual Preferred Stock (the MVLS Notice, Nasdaq indicated that the Company had 180 calendar days from the date of the MVLS Notice (or until May 13Series B Preferred Stock) (formerly Nasdaq: XELA and XELAP) on November 8, 2024) to regain compliance with the MVLS Rule by having our MVLS close at or above $35 million for a minimum of ten cons, and a Form 25-NSE will be filed with the Secutive business days. On May 14, 2024, we received a second notice stating that thrities and Exchange Company had not regained compliance with the MVLS Rule, and itsmission (the SEC) to delist such securities would be delisted from the Nasdaq Capital Market unless the Company. We will remain subject to SEC requested an appeal of the delistiporting determinobligation by May 21, 2024. The Company appealed s.

As a result of the determinatsuspension and the Nasdaq Hearings Panel (the Panel) held a heardelisting on this matter on July 2, 2024 (the Hearing). At the Hearing, the Company present, our common stock and Series B Preferred its plan for complying with the MVLS Rule, which includes consummatStock began trading the potential spin-off of on the BPA Business described in this report under Managements DiscussionOTC Pink under the symbols XELA and Analysis of Financial Condition XELAP on November 8, 2024, and Results of OperationsPotential Future Transactions. On Jusuch market is currently 17, 2024, the Panel determined to grant the Company's request to coonly trading market for our securities. We antinue its listing on cipate that Nasdaq, provided that, among other will soon file a Form 25-NSE with things, (i) on or before August 30, 2024, te SEC to formally remove the Company will file a registration statement with the Ses securities and Exchange Commission for the stock to be issued in the spin-off of from listing and registration on Nasdaq, although the BPA Business and (ii) on or before October 25, 2024, the Company will complete the spin-off of the BPA Business to demonstrate compliance with the MVLS Rule.

Thereexact timing of such filing is currently unknown.We can bprovide no assurance that weour securities will consummattinue the spin-off or that we will oo trade on OTC Pink, whetherwise be able to remedy and broker-dealers will continue to satisfy the MVLS Rule and other continuing listing requirements and remain listed on provide public quotes of our securities on OTC Pink, whether the Nasdaq. If our Common Stock or Series B Preferred Stock were no longer listedtrading volume of our securities on the Nasdaq, investors might onlyOTC Pink will be ablesufficient to traprovide on one of the over-the-counterfor an efficient trading markets. This would likely impair  or whethe liquidity ofr quotes for our securities notwill continue only in  OTC Pink in the number of shares thatfuture, which could be bought and sold at a given price, which might be depressresult in significantly lower trading volumes and reduced by the relative illiliquidity, but also through delays in the timing of transactions and reduction in media and analyst coverage for investors seeking to buy or sell our securities. In addition, we could face significant material adverse consequences, including limited availability of market quotations for our securities and a decreased ability to issue additional securities or obtain additional financing in addition to negative perceptions about us and our business that may result from delisting.

The conversion of Exela's Series A Convertible Preferred Stock following a Fundamental Change could substantially dilute the existing holders of Exela Common Stock.

The conversion of our Series A Perpetual Convertible Preferred Stock (the "Series A Preferred Stock) following the occurrence of a "Fundamental Change," as defined in the Certificate of Designations, Preferences, Rights and Limitations of the Series A Preferred Stock (filed as an exhibit to the Company's Current Report on Form 8-K, dated July 18, 2017)(the "Certificate of Designations") could result in substantial dilution of the outstanding Exela Common Stock. Upon a Fundamental Change, if Exela does not redeem the Series A Preferred Stock, the Certificate of Designations allows holders to convert their entire accumulated liquidation preference (approximately $44.2 million in the aggregate as of June 30, 2024) into Common Stock at a favorable rate for 15 days following the effective date of the Fundamental Change based on the greater of (i) the price to be paid (or deemed paid) per share of Common Stock in such transaction or the average closing price of Common Stock on the 20 consecutive trading days immediately preceding the effective date of the Fundamental Change (or, such lesser number of trading days as shall follow the public announcement of such transaction) and (ii) $0.10. The maximum number of shares of Common Stock issuable upon conversion will not exceed 85% of the total number of shares of Common Stock outstanding on a fully-diluted basis. As a result, if Exela does not redeem the Series A Preferred Stock following a Fundamental Change, the holders of Exela Series A Preferred Stock could receive up to 85% of the Exela Common Stock after exercising their conversion rights.