What Global Industrial Co. told the SEC could break it.

As a distributor that invests working capital in inventory, Global Industrial is exposed to supply-chain timing risk: delays in the timely availability of products from its suppliers have in the past and could again delay receipt of needed product and result in delayed or lost sales, with global supply chains (particularly products and components imported from China and other Asian nations) vulnerable to quarantines, factory slowdowns/shutdowns, border closings, travel restrictions and allocation of hard-to-source products.

“delays in the timely availability of products from our suppliers has in the past and could in the future delay receipt of needed product, resulting in delayed or lost sales”

Global Industrial concluded its disclosure controls and procedures were not effective as of December 31, 2025 due to material weaknesses at its Indoff LLC subsidiary (which represents approximately 13% of revenue) in key IT general controls — change management, segregation of duties and privileged access; until remediated, these weaknesses create risk of material misstatement, potential investor-confidence and compliance consequences, and remediation costs.

“the Company's disclosure controls and procedures were not effective due to material weaknesses identified at its subsidiary, Indoff LLC (Indoff), which represents approximately 13% of revenue. The material weaknesses at Indoff relate to the design and operation of certain key Information Technology General Controls (“ITGCs”), specifically related to change management, segregation of duties, and privileged access.”

Global Industrial buys substantially all its products from third-party large and small manufacturers and wholesale distributors (no single supplier was 10%+ of purchases), but it historically sources a substantial portion of products from manufacturers in China — still its largest country-of-origin concentration despite reductions since the 2019 Section 232/301 tariffs — exposing it to global-sourcing and supply-chain risks; loss or interruption of supplier relationships, or disruption in China/Asia supply chains, could hurt sales, raise inventory levels and increase costs.

“Historically, we source a substantial portion of our products from manufacturers that are located in China. While China sourced products have been reduced in recent years since the expansion of Section 232 and 301 tariffs in 2019, China still represents the largest concentration of country of origin goods.”

Because Global Industrial imports heavily, it is materially exposed to U.S. trade policy: throughout 2025 the administration imposed blanket IEEPA tariffs on goods from Mexico and Canada, reciprocal tariffs on countries that tariff U.S. goods, and expanded steel and aluminum (and derivative-product) tariffs, on top of existing Section 232/301 China tariffs, and canceled prior tariff exclusions — measures that could materially and adversely affect its costs, margins and results.

“the current administration implemented a number of additional measures under trade policy, including the imposition of blanket tariffs against goods sourced in Mexico and Canada under the Authority of the International Emergency Economic Powers Act ("IEEPA"), reciprocal tariffs on the import of goods from other countries that charge tariffs on imports of US produced goods and expanded tariffs on steel and aluminum imports,”