ACME UNITED CORP 10-K

Item 9A. Controls and Procedures Evaluation of Disclosure Controls and Procedures. An evaluation was performed under the supervision and with the participation of our management, including the Chief Executive Officer and Chief Financial Officer, of the effectiveness of the design and operation of our disclosure controls and procedures (as defined in Rule 13a-15(e) under the Exchange Act of 1934) as of December 31, 2022. Based on and as of the time of such evaluation, our management, including the Chief Executive Officer and Chief Financial Officer, concluded that our disclosure controls and procedures were effective as of the end of the period covered by this report to ensure that information required to be disclosed by us in the reports that we file or submit is recorded, processed, summarized and reported within the time periods specified in the Securities and Exchange Commission's rules and forms. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed by us in the reports that we file or submit under the Exchange Act of 1934 is accumulated and communicated to our management, including our Chief Executive Officer and Chief Financial Officer, as appropriate to allow timely decisions regarding required disclosure. As of December 31, 2022, our Chief Executive Officer and Chief Financial Officer have concluded that the financial statements included in this Annual Report on Form 10-K present fairly, in all material respects, the financial position, results of operations and cash flows of the Company in conformity with accounting principles generally accepted in the United States of America. Management's Report on Internal Control over Financial Reporting. Management is responsible for establishing and maintaining adequate internal control over financial reporting, as such term is defined in Exchange Act Rules 13a-15(f) and 15d-15(f). The Company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of our financial reporting and the preparation of our financial statements in accordance with United States Generally Accepted Accounting Principles (“GAAP”). Under the supervision and with the participation of management, including our Chief Executive Officer and Chief Financial Officer, we conducted an evaluation of the effectiveness of our internal control over financial reporting as of December 31, 2022, based on criteria established in Internal Control — Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission. Based on this evaluation, Management concluded that the Company’s internal control over financial reporting was effective as of December 31, 2022. Internal control over financial reporting is a process designed by, or under the supervision of, our Chief Executive Officer and Chief Financial Officer, and effected by the board of directors, management, and other personnel, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with GAAP including those policies and procedures that: (i) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of our assets, (ii) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with GAAP and that receipts and expenditures are being made only in accordance with authorizations of our management and directors, and (iii) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of our assets that could have a material effect on the financial statements. Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with policies and procedures may deteriorate. Marcum LLP, the independent registered public accounting firm that audited the consolidated financial statements of the Company included in this Annual Report on Form 10-K, has issued an attestation report on the effectiveness of the Company's internal control over financial reporting as of December 31, 2022. The report, which expresses an unqualified opinion on the effectiveness of the Company's internal control over financial reporting as of December 31, 2022, is included above under the heading Report of Independent Registered Public Accounting Firm. Changes in Internal Control over Financial Reporting. Except for changes referenced above, there have not been any changes in our internal control over financial reporting (as such term is defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act) during the fourth fiscal quarter ended December 31, 2022, to which this report relates, that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting. Item 9B. Other Information None. Item 9C. Other Information Not Applicable. 41 PART III Item 10. Directors, Executive Officers and Corporate Governance Information regarding Directors, Executive Officers and Corporate Governance is incorporated herein by reference to the section entitled “Election of Directors” contained in the Company’s Proxy Statement to be filed with the Securities and Exchange Commission in connection with the Company’s 2023 Annual Meeting of Shareholders. Code of Conduct The Company has adopted a Code of Conduct that is applicable to its employees, including the Chief Executive Officer, Chief Financial Officer and Controller. The Code of Conduct is available in the investor relations section on the Company’s website at www.acmeunited.com. If the Company makes any substantive amendments to the Code of Conduct which apply to its Chief Executive Officer, Chief Financial Officer or Controller, or grants any waiver, including any implicit waiver, from a provision of the Code of Conduct to the Company’s executive officers, the Company will disclose the nature of the amendment or waiver on its website. Information regarding compliance with Section 16(a) beneficial ownership reporting requirements and certain corporate governance matters is incorporated herein by reference to the sections entitled (i) “Compliance with Section 16(a) of the Securities Exchange Act of 1934”, (ii) “Nominations for Directors”, and (iii) “Audit Committee” contained in the Company’s Proxy Statement to be filed with the Securities and Exchange Commission in connection with its 2023 Annual Meeting of Shareholders. Item 11. Executive Compensation Information with respect to executive compensation is incorporated herein by reference to the section entitled “Executive Compensation” contained in the Company’s Proxy Statement to be filed with the SEC in connection with the Company’s 2023 Annual Meeting of Shareholders. Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters Information regarding security ownership of certain beneficial owners, directors and executive officers is incorporated herein by reference to the information in the section entitled “Security Ownership of Directors and Officers” contained in the Company’s Proxy Statement to be filed with the SEC in connection with its 2023 Annual Meeting of Shareholders. Item 13. Certain Relationships and Related Transactions, and Director Independence Information regarding certain relationships and related transactions is incorporated herein by reference to the information in the section entitled “Certain Relationships and Related Transactions” contained in the Company’s Proxy Statement to be filed with the SEC in connection with its 2023 Annual Meeting of Shareholders. Information regarding director independence is incorporated herein by reference to the section entitled “Independence Determinations” contained in the Company’s Proxy Statement to be filed with the Securities and Exchange Commission in connection with the Company’s 2023 Annual Meeting of Shareholders. Item 14. Principal Accounting Fees and Services Information regarding principal accountant fees and services is incorporated herein by reference to the section entitled “Fees to Auditors” contained in the Company’s Proxy Statement to be filed with the SEC in connection with its 2023 Annual Meeting of Shareholders . 42 PART IV Item 15. Exhibits and Financial Statement Schedules (a)(1) Financial Statements. • Consolidated Balance Sheets • Consolidated Statements of Operations • Consolidated Statements of Changes in Stockholders’ Equity • Consolidated Statements of Cash Flows • Notes to Consolidated Financial Statements • Report of Independent Registered Public Accounting Firm (a)(2) Financial Statement Schedules • Schedules other than those listed above have been omitted because of the absence of conditions under which they are required or because the required information is presented in the financial statements or notes thereto. (a)(3) The exhibits listed under Item 15(b) are filed or incorporated by reference herein. (b) Exhibits. The exhibits listed below are filed as part of this Annual Report on Form 10-K. Certain of the exhibits, as indicated, have been previously filed and are incorporated herein by reference. Exhibit No. Identification of Exhibit 3(i) Re-Stated Certificate of Incorporation July 1, 2005 (2) 3(ii) Bylaws (4) 4 Specimen of Common Stock certificate (18) (p) 4(vi) Description of Common Stock (19) 10.4 Severance Pay Plan dated September 28, 2004* (15) 10.5(a) Salary Continuation Plan dated September 28, 2004, as amended (3)* 10.6(a) 2005 Non-Salaried Director Stock Option Plan, amended (6) 10.6(b) Amendment to the 2005 Non-Salaried Director Stock Option Plan (12) 10.7 2017 Non-Salaried Director Stock Option Plan (9) 10.8 Deferred Compensation Plan dated October 2, 2007* (16) 10.9(a) 2012 Acme United Employee Stock Option Plan (11) 10.9(b) Amendment to the 2012 Acme United Employee Stock Option Plan* (12) 10.10(a) Revolving Loan Agreement with HSBC, dated April 5, 2012 (13) 10.10(b) Amendment No. 1 to Revolving Loan Agreement with HSBC Dated (14) 10.10(c) Amended and restated secured revolving note (14) 10.10(d) Amendment No. 2 to Revolving Loan Agreement with HSBC dated October 2013 (15) 10.10(e) Amendment No. 4 to Revolving Loan Agreement with HSBC dated May 6, 2016 (12) 10.10(f) Second amended and restated secured revolving note (12) 10.10(g) Amendment No. 5 to Revolving Loan Agreement with HSBC dated January 2017 (16) 10.10(h) Amendment No. 6 to Revolving Loan Agreement with HSBC dated March 2018 (20) 10.10(i) Amendment No. 7 to Revolving Loan Agreement with HSBC dated March 2018 (20) 10.10(j) Amendment No. 8 to Revolving Loan Agreement with HSBC dated March 2018 (20) 10.10(j) Amendment No. 9 to Revolving Loan Agreement with HSBC dated N ovember 2022 (21) 10.11 Change in Control Plan as amended dated February 24, 2011* (17) 43 21 Subsidiaries of the Registrant 23.1 Consent of Marcum LLP, Independent Registered Public Accounting Firm 31.1 Certification of Walter Johnsen pursuant to Rule 13a-14(a) and 15d-14(a) and Section 302 of the Sarbanes-Oxley Act of 2002 31.2 Certification of Paul Driscoll pursuant to Rule 13a-14(a) and 15d-14(a) and Section 302 of the Sarbanes-Oxley Act of 2002 32.1 Certification of Walter Johnsen pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 32.2 Certification of Paul Driscoll pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 101.INS* Inline XBRL Instance Document- the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document. 101.SCH* Inline XBRL Taxonomy Extension Schema Document 101.CAL* Inline XBRL Taxonomy Extension Calculation Linkbase Document 101.DEF* Inline XBRL Taxonomy Extension Definition Linkbase Document 101.LAB* Inline XBRL Taxonomy Extension Label Linkbase Document 101.PRE* Inline XBRL Taxonomy Extension Presentation Linkbase Document 104 The cover page from the Company’s Quarterly Report on Form 10-Q for the quarter ended June 30, 2019, has been formatted in Inline XBRL. * Indicates a management contract or a compensatory plan or arrangement (1) Previously filed as an Exhibit to the Company’s Form 8-K/A filed on August 19, 2014. (2) Previously filed in the Company’s Form 8-K filed on July 8, 2005. (3) Previously filed in the Company’s Form 8-K filed on February 9, 2005. (4) Previously filed in the Company’s Form 8-K filed on March 3, 2006. (5) Previously filed in the Company’s Proxy Statement for the 2005 Annual Meeting of Shareholders. (6) Previously filed in the Company’s Proxy Statement filed on March 29, 2005. This plan expired in 2015. (7) Previously filed in the Company’s Form 8-K filed on December 21, 2010. (8) Previously filed as an exhibit to the Company’s Form 10-K filed on March 17, 2005. (9) Previously filed as an exhibit to the Company’s Proxy Statement filed on March 22, 2017. (10) Previously filed as an exhibit to the Company’s Form 10-K filed on March 12, 2008. (11) Previously filed as an exhibit to the Company’s Form 10-Q filed on August 14, 2012. (12) Previously filed as an exhibit to the Company’s Form 10-Q filed on May 13, 2016. (13) Previously filed as an exhibit to the Company’s Form 10-Q filed on May 14, 2012. (14) Previously filed as an exhibit to the Company’s Form 10-Q filed on May 10, 2013. (15) Previously filed as an exhibit to the Company’s Form 10-K filed on March 6, 2014. (16) Previously filed as an exhibit to the Company’s Form 10-Q filed on August 4, 2017. (17) Previously filed as an exhibit to the Company’s Form 10-K filed on March 11, 2011. (1 8 ) Previously filed as an exhibit to the Company’s Form 10-K filed in 1971. ( 19 ) Previously filed as an exhibit to the Company’s Form 10-K filed on March 31, 2021. ( 20 ) Previously filed as an exhibit to the Company’s Form 10-Q filed on August 8, 2022. ( 21 ) Previously filed as an exhibit to the Company’s Form 10-Q filed on November 9, 2022. 44 Item 16. Form 10-K Summary Not applicable. Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized, on March 10, 2023. 45 ACME UNITED CORPORATION (Registrant) Signatures: Titles: /s/ Walter C. Johnsen Walter C. Johnsen Chairman and Chief Executive Officer /s/ Brian S. Olschan Brian S. Olschan President, Chief Operating Officer and Director /s/ Paul G. Driscoll Paul G. Driscoll Vice President, Chief Financial Officer, Secretary and Treasurer /s/ Rex Davidson Rex Davidson Director /s/ Richmond Y. Holden, Jr. Richmond Y. Holden, Jr. Director /s/ Susan H. Murphy Susan H. Murphy Director /s/ Stevenson E. Ward III Stevenson E. Ward III Director /s/ Brian K. Barker Brian K. Barker Director 46