▸ Climate change, extreme weather and risks arising from the transition to a lower-carbon economy may impact our business.· · · · · ● 1 ▸ Indirect regulatory risks and opportunities related to products or services from high emitting companies; and· · · · · ● 1 ▸ Litigation risks for emitters of greenhouse gases.· · · · · ● 1 ▸ Our use of artificial intelligence ("AI") technologies may not be successful and may present business, financial, legal and reputational risk.· · · · · ● 1 ▸ Pandemics, epidemics or other outbreaks of diseases have had and may in the future have a material adverse impact upon our business, liquidity, results of operations and financial condition.· · · · · ● 1 ▸ U.S. federal policy changes may adversely affect our business.· · · · · ● 1 ▸ We maintain cyber risk insurance, but this insurance may not be sufficient to cover all of our losses from any breaches of our networks.· · · · · ● 1 ▸ Issues in the development and use of artificial intelligence, combined with an uncertain regulatory environment, may result in reputational harm, liability, or other adverse consequences to our business operations.· · · · ● ● 2 ▸ Issues relating to our use of artificial intelligence and machine learning technologies, combined with an uncertain legal and regulatory environment, could materially and adversely affect our business, financial condition and results of operations.· · · · ● ● 2 ▸ We may face data protection, data security, and privacy risks in connection with privacy regulation.· · · ● ● ● 3 ▸ Evolving expectations around corporate responsibility practices, specifically related to environmental, social and governance (“ESG”) matters, may expose us to reputational and other risks.· · ● ● ● ● 4 ▸ If any of the following risks and uncertainties develop into actual events, these events could have a material adverse effect on our business, financial condition or results of operations.· · ● ● ● ● 4 ▸ group Risks Related to Governmental Regulations, Laws and Taxation· · ● ● ● ● 4 ▸ group Risks Related to the Company’s Business and Operation· · ● ● ● ● 4 ▸ We may not have adequate insurance for potential liabilities, including liabilities arising from litigation.· · ● ● ● ● 4 ▸ Existing and potential customers may consider outsourcing their IT requirements to foreign countries, which could have an adverse effect on our ability to obtain new customers or retain existing customers.· ● ● ● ● ● 5 ▸ If our clients are subjected to cyber-attacks or data security breaches, it may result in damage to our business and the disclosure of our confidential information.· ● ● ● ● ● 5 ▸ Our leverage could materially and adversely affect our financial condition or operating flexibility and prevent us from fulfilling our obligations under our Credit Agreement.· ● ● ● ● ● 5 ▸ Our multi-year Center of Excellence service offering may be early terminated on short notice from the client, which could materially and adversely affect our business, backlog and future revenues.· ● ● ● ● ● 5 rw ▸ Our results of operations and share price could be adversely affected if we are unable to maintain effective internal controls.· ● ● ● ● ● 5 ▸ Our strategy of expansion through the acquisition of additional companies may not be successful and may result in slower growth of our business and reduced operating margins.· ● ● ● ● ● 5 ▸ Our success depends upon retaining the services of our management team and key operating employees.· ● ● ● ● ● 5 rw ▸ Our success depends upon the maintenance and protection of our intellectual property rights and processes, and any substantial costs incurred protecting such rights and processes may decrease our operating margins.· ● ● ● ● ● 5 ▸ Reclassification of our independent contractors by tax or regulatory authorities could have a material adverse effect on our business model and/or could require us to pay significant retroactive wages, taxes and penalties.· ● ● ● ● ● 5 ▸ Requirements of the Affordable Care Act may continue to increase our employee benefits costs and could negatively affect our operating results, cash flows and financial condition if such costs aren’t recovered with increases in client bill rates.· ● ● ● ● ● 5 ▸ Restrictions on immigration or unjustified or discriminatory enforcement of immigration laws could increase our cost of doing business, cause us to change the way we conduct our business or otherwise disrupt our operations.· ● ● ● ● ● 5 ▸ Security breaches and other disruptions could compromise our information and expose us to liability, which would cause our business and reputation to suffer.· ● ● ● ● ● 5 ▸ Wage costs in India may increase, which may reduce our operating margins and reduce a competitive advantage of ours.· ● ● ● ● ● 5 ▸ We are dependent upon our Indian operations and there can be no assurance that our Indian operations will support our growth strategy and historical cost structure.· ● ● ● ● ● 5 ▸ We make estimates and assumptions in connection with the preparation of our consolidated financial statements and any changes to those estimates and assumptions could adversely affect our financial results.· ● ● ● ● ● 5 ▸ We may be subject to liability to clients arising from our engagements.· ● ● ● ● ● 5 ▸ In recent years, the vast majority of our H1-B hires were not subject to the annual quota limiting H1-B visas because they were already in the U.S. under H1-B visa status with other employers. As a result, the negative· · · · ● · 1 ▸ We are exposed to various possible claims relating to our business. In the ordinary course of business, we have, and in the future, may become the subject of various claims, lawsuits, and administrative proceedings· · · · ● · 1 ▸ Negative economic or business conditions brought on by a global health pandemic, epidemic or outbreak may adversely affect demand for our services.· · ● ● ● · 3 ▸ To the extent the COVID-19 pandemic or the efforts taken to control its spread adversely affects our business and financial results, it may also have the effect of heightening many of the other risks described in this· · ● · · · 1 ▸ Any disruption in the supply of power, IT infrastructure and telecommunications lines to our facilities could disrupt our business process or subject us to additional costs.· ● ● ● ● · 4 ▸ If our clients are adversely affected by climate change or related compliance costs, this may reduce their spending and demand for our services, leading to a decrease in revenue.· ● ● ● ● · 4 ▸ group In the past years, more companies started to use· ● · · · · 1 ▸ Internal controls related to the operation of our business are critical to our ability to provide accurate financial statements and an appropriate internal control environment. We are required to provide a report from· ● · · · · 1 ▸ Our Data and Analytics Services segment markets a multi-year service offering known as a Center of Excellence. This service provides our clients with a virtual extension of their internal team to assist with their· ● · · · · 1 ▸ Our business is certified as a minority-owned business, and loss of that certification may impact our ability to gain new customers or expand our business with existing customers.· ● ● ● · · 3 ▸ group Sunil Wadhwani and Ashok Trivedi,· ● · · · · 1 ▸ You should carefully consider each of the following risk factors and all of the other information set forth in this Annual Report on Form· ● · · · · 1 ▸ A significant number of organizations are attempting to migrate their IT business applications to advanced technologies. As a result, our● · · · · · 1 ▸ Acquisitions of technology companies and assets are inherently risky and subject to many factors outside of our control and no assurance can● · · · · · 1 ▸ group Any disruption in the supply of power, IT infrastructure and● · · · · · 1 ▸ Approximately 99% of our revenues are generated from clients located in North America. Our business depends on the overall demand for IT and● · · · · · 1 ▸ At December 31, 2020, we had outstanding borrowings of $17.5 million under our Credit Agreement with PNC Bank and certain other● · · · · · 1 ▸ group Because the NMSDC certification relies in● · · · · · 1 ▸ Climate change vulnerability is posing new threats and opportunities in the global economy. Climate change and measures adopted to address it can affect us, our clients and suppliers in myriad ways, depending on the● · ● · · · 2 rw ▸ group Existing and potential customers may consider● · · · · · 1 ▸ H1-B visa holders’ employment with staffing and data analytics companies, which could result in reduced revenues and/or a higher cost of recruiting.● · · · · · 1 ▸ group If our clients are adversely affected by● · · · · · 1 ▸ If our clients are subjected to cyber-attacks or data security breaches, it● · · · · · 1 ▸ group Immigration change continues to attract significant attention in the● · · · · · 1 ▸ In 2017, U.S. Congress and the Trump administration made substantial changes to U.S. policies, which included● · · · · · 1 ▸ In our IT Staffing Services segment, we are party to several “preferred vendor” contracts, and we are seeking additional similar contracts in order to obtain new or additional business from large and● ● · · · · 2 rw ▸ group In the ordinary course of our business, we● · · · · · 1 ▸ In the past years, more companies started to use low-cost offshore outsourcing centers to perform● · · · · · 1 ▸ Internal controls related to the operation of our business are critical to our ability to● · · · · · 1 ▸ Operating results below current levels or other adverse factors, including increases in interest rates, could result in us being unable to● · · · · · 1 ▸ group Our Data and Analytics Services segment● · · · · · 1 ▸ group Our Indian recruitment and delivery centers depend● · · · · · 1 ▸ Our July 13, 2017 acquisition of the service division of InfoTrellis, Inc. and our October 1, 2020 acquisition of AmberLeaf Partners,● · · · · · 1 ▸ Our ability to make required payments or to refinance our indebtedness depends on our future performance, which will be● · · · · · 1 ▸ Our acquisition AmberLeaf Partners, Inc. may not provide us with the long-term business advantages that we expected, which may result in the slower growth of our business and reduced operating margins.● ● ● · · · 3 rw ▸ group Our acquisitions of InfoTrellis, Inc. and● · · · · · 1 ▸ Our business involves the delivery of professional services and is labor-intensive. Our success depends● · · · · · 1 ▸ group Our business is certified as a● · · · · · 1 ▸ Our failure to manage growth, attract and retain personnel or a significant interruption in our ability to transmit data and voice● · · · · · 1 ▸ group Our leverage could materially and● · · · · · 1 ▸ Our multi-year Center of Excellence service offering may be early terminated with a short-notice from the client, which could● · · · · · 1 ▸ group Our quarterly operating results may be● · · · · · 1 ▸ Our revenues are highly dependent on clients located in North America, as well as clients concentrated in● · · · · · 1 ▸ Our success depends in part upon certain methodologies and tools we use in designing, developing and implementing application systems and other● · · · · · 1 ▸ group Our success depends upon the● · · · · · 1 ▸ group Our wage costs in India have● · · · · · 1 ▸ Our “preferred vendor” contracts generally result in lower margins. In addition, we may not● · · · · · 1 ▸ Reclassification of our independent contractors by tax or regulatory authorities could have a material adverse effect on our business model and/or could● · · · · · 1 ▸ Restrictions on immigration or unjustified or discriminatory enforcement of immigration laws could● · · · · · 1 ▸ Security breaches and other disruptions could compromise our information and● · · · · · 1 ▸ group Should we experience a disaster or other business● · · · · · 1 ▸ South Asia has, from time to time, experienced instances of civil unrest and hostilities among neighboring countries, such as between India and● · · · · · 1 ▸ Sunil Wadhwani and Ashok Trivedi, co-founders of the Company, own approximate 60% of Mastech● · · · · · 1 ▸ group The COVID-19 pandemic and● · · · · · 1 ▸ The Credit Agreement contains financial covenants, including but not limited to, covenants related to the● · · · · · 1 ▸ The IT staffing and data analytics services industries are characterized by rapid technological● · · · · · 1 ▸ The IT staffing services and data analytics services industries are highly competitive and served by numerous global, national, regional and● · · · · · 1 ▸ The Indian rupee may increase in value relative to the dollar, increasing our costs. Although, we receive the vast majority of our● · · · · · 1 ▸ The U.S. Congress, the current administration, or any new administration may make substantial changes to fiscal, tax, and other federal policies that may adversely affect our business.● ● ● ● ● · 5 rw ▸ The execution of austerity measures that we implemented in 2020 to mitigate the impact of the pandemic on our financial results may not● · · · · · 1 ▸ Unmitigated climate change is likely to have severe physical impacts on companies with exposed assets or business operations, including● · · · · · 1 ▸ We are a large minority-owned staffing and data analytics services firm and have been certified as minority-owned by the National Minority● · · · · · 1 ▸ We are dependent on the proper functioning of information systems in operating our business. Critical information systems are used in every aspect of our daily operations, perhaps most significantly, in the● ● · · · · 2 rw ▸ We are dependent upon our Indian operations and there can be no assurance that our Indian● · · · · · 1 ▸ group We are highly dependent on our management team and● · · · · · 1 ▸ We are subject to periodic federal, state and local tax audits for various tax years. We also need to comply with new, evolving or revised tax● · · · · · 1 ▸ We are unable to predict the extent to which the global COVID-19 pandemic may adversely impact our business operations, financial performance and results of operations.● · ● ● ● · 4 rw ▸ We identified material weaknesses in our internal controls designed to address management● · · · · · 1 ▸ We purchase various insurance policies to limit or transfer certain risks inherent in our operations. These● · · · · · 1 ▸ We recruit IT professionals on a global basis and, therefore, must comply● · · · · · 1 ▸ group We utilize individuals to provide certain services in● · · · · · 1 ▸ Within our IT Staffing Services segment, many large users of staffing services are employing MSP’s to manage their contractor expenses in an effort to drive down overall costs. MSP clients represented approximately● · · ● · · 2 rw ▸ Government regulation of H1-B visas may materially affect our workforce and limit our supply of qualified IT professionals, or increase our cost of securing workers.● · ● ● ● ● 5 rw ▸ Adverse results in tax audits or interpretations of tax laws could have an adverse impact on our business.● ● ● ● ● ● 6 ▸ If our insurance costs increase significantly, these incremental costs could negatively affect our financial results.● ● ● ● ● ● 6 rw ▸ Lack of success in recruitment and retention of IT and data and analytics professionals may decrease our revenues, impair our ability to service clients and pursue opportunities in the market and increase the costs needed to maintain our workforce.● ● ● ● ● ● 6 rw ▸ Negative or uncertain economic conditions in North America or elsewhere may adversely affect demand for our services.● ● ● ● ● ● 6 rw ▸ Our inability to successfully recover should we experience a disaster or other business continuity problem could cause material financial loss, loss of human capital, regulatory actions, reputational harm or legal liability.● ● ● ● ● ● 6 rw ▸ Our industries are highly competitive and fragmented, which may limit our ability to increase our prices for services.● ● ● ● ● ● 6 ▸ Our ownership is highly concentrated in two individuals and the interests of those individual shareholders may not coincide with yours.● ● ● ● ● ● 6 ▸ Our quarterly operating results may be subject to significant variations.● ● ● ● ● ● 6 rw ▸ Our revenues are highly concentrated, and the loss of a significant client would adversely affect our business and revenues.● ● ● ● ● ● 6 rw ▸ Regional conflicts in South Asia could adversely affect the Indian economy, disrupt our operations and cause our business to suffer.● ● ● ● ● ● 6 ▸ group Risks Related to Economic and Financial Conditions● ● ● ● ● ● 6 ▸ Risks posed by climate change may materially increase our compliance costs and adversely impact our profitability.● ● ● ● ● ● 6 ▸ The covenants in our Credit Agreement impose restrictions that may limit our operating and financial flexibility.● ● ● ● ● ● 6 rw ▸ We depend on the proper functioning of our information systems.● ● ● ● ● ● 6 ▸ We may have difficulty maintaining client relationships if the trend towards utilizing Managed Service Providers (“MSPs”) or setting up Global Capability Centers (GCC's) continues.● ● ● ● ● ● 6 rw ▸ We must keep pace with the rapid technological changes that characterize the IT and data and analytics industries and our failure to do so could result in lower demand for services.● ● ● ● ● ● 6 rw 
