Item 9A. Controls and Procedures
Item 9A. Controls and Procedures.
Conclusion regarding the effectiveness of disclosure controls and procedures.
Our management, with the participation of our Chief Executive Officer and Chief Financial Officer (principal accounting officer), evaluated the effectiveness of our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended (the “Exchange Act”)) as of December 31, 2023. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed by the Company in the reports that we file or submit under the Exchange Act 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. Management recognizes that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving their objectives and management necessarily applies its judgment in evaluating the cost-benefit relationship of possible controls and procedures.
Based on management’s evaluation of our disclosure controls and procedures as of December 31, 2023, our Chief Executive Officer and Chief Financial Officer concluded that, as of such date, our disclosure controls and procedures were effective.
Management’s report on Internal Control Over Financial Reporting.
Our 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). Under the supervision and with the participation of our management, including our Chief Executive Officer and Chief Financial Officer, we conducted an evaluation of the effectiveness of our internal control over financial reporting based on the framework in “Internal Control — Integrated Framework (2013)” issued by the Committee of Sponsoring Organizations of the Treadway Commission.
In making our assessment of the Company’s internal control over financial reporting as of December 31, 2023, we excluded from our assessment the internal control over financial reporting at Sierramotion Inc. (“Sierramotion”), which was acquired on September 22, 2023, whose financial statements collectively constitute 3% and 1% of net and total assets, respectively, less than 1% of revenues, and less than 1% of net income of the consolidated financial statement amounts as of and for the year ended December 31, 2023.
Based on this assessment, our management concluded that our internal control over financial reporting was effective as of December 31, 2023.
The effectiveness of our internal control over financial reporting as of December 31, 2023 has been audited by Deloitte & Touche LLP, an independent registered public accounting firm, as stated in its attestation report which is included below.
Our system of internal control over financial reporting was designed to provide reasonable assurance regarding the preparation and fair presentation of published financial statements in accordance with generally accepted accounting principles. All internal control systems, no matter how well designed, have inherent limitations. Therefore, even those systems determined to be effective can provide only reasonable assurance and 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 the policies or procedures may deteriorate.
Changes in Internal Control Over Financial Reporting
During the quarter ended December 31, 2023, there have been no changes in our internal control over financial reporting that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.
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REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
To the stockholders and the Board of Directors of Allient Inc.
Opinion on Internal Control over Financial Reporting
We have audited the internal control over financial reporting of Allient Inc. and subsidiaries (formerly Allied Motion Technologies Inc. and subsidiaries) (the “Company”) as of December 31, 2023, based on criteria established in Internal Control — Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). In our opinion, the Company maintained, in all material respects, effective internal control over financial reporting as of December 31, 2023, based on criteria established in Internal Control — Integrated Framework (2013) issued by COSO.
We have also audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the consolidated financial statements as of and for the year ended December 31, 2023, of the Company and our report dated March 5, 2024, expressed an unqualified opinion on those consolidated financial statements.
As described in Management’s Report on Internal Control Over Financial Reporting, management excluded from its assessment the internal control over financial reporting at Sierramotion Inc. (“Sierramotion”), which was acquired on September 22, 2023, and whose financial statement collectively constitute 3% and 1% of net and total assets, respectively, less than 1% of revenues, and 1% of net income of the consolidated financial statement amounts as of and for the year ended December 31, 2023. Accordingly, our audit did not include the internal control over financial reporting at Sierramotion.
Basis for Opinion
The Company’s management is responsible for maintaining effective internal control over financial reporting and for its assessment of the effectiveness of internal control over financial reporting, included in the accompanying Management’s Report on Internal Control Over Financial Reporting. Our responsibility is to express an opinion on the Company’s internal control over financial reporting based on our audit. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.
We conducted our audit in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether effective internal control over financial reporting was maintained in all material respects. Our audit included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, testing and evaluating the design and operating effectiveness of internal control based on the assessed risk, and performing such other procedures as we considered necessary in the circumstances. We believe that our audit provides a reasonable basis for our opinion.
Definition and Limitations of Internal Control over Financial Reporting
A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company’s internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements.
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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 the policies or procedures may deteriorate.
/s/ Deloitte & Touche LLP
Williamsville, New York
March 5, 2024
Item 9B. Other Information
N o t a pplicable.
PART III
Item 10. Directors, Executive Officers and Corporate Governance.
The Company’s definitive proxy statement which will be filed with the SEC pursuant to Registration 14A within 120 days of the end of the Company’s fiscal year is incorporated herein by reference.
Item 11. Executive Compensation.
The Company’s definitive proxy statement which will be filed with the SEC pursuant to Registration 14A within 120 days of the end of the Company’s fiscal year is incorporated herein by reference.
Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters.
The Company’s definitive proxy statement which will be filed with the SEC pursuant to Registration 14A within 120 days of the end of the Company’s fiscal year is incorporated herein by reference.
Equity Compensation Plan Information
The following table shows the equity compensation plan information of the Company at December 31, 2023:
Number of securities
remaining available for
future issuance under equity
Plan category
compensation plans
Equity compensation plans approved by security holders
745,260
Item 13. Certain Relationships and Related Transactions, and Director Independence.
The Company’s definitive proxy statement which will be filed with the SEC pursuant to Registration 14A within 120 days of the end of the Company’s fiscal year is incorporated herein by reference.
Item 14. Principal Accountant Fees and Services.
The Company’s definitive proxy statement which will be filed with the SEC pursuant to Registration 14A within 120 days of the end of the Company’s fiscal year is incorporated herein by reference.
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PART IV
Item 15. Exhibits and Financial Statement Schedules.
a) The following documents are filed as part of this Report:
1. Consolidated Financial Statements
a) Consolidated Balance Sheets as of December 31, 2023 and December 31, 2022.
b) Consolidated Statements of Income and Comprehensive Income for the years ended December 31, 2023, 2022, and 2021.
c) Consolidated Statements of Stockholders’ Equity for the years ended December 31, 2023, 2022, and 2021.
d) Consolidated Statements of Cash Flows for the years ended December 31, 2023, 2022, and 2021.
e) Notes to Consolidated Financial Statements.
f) Reports of Independent Registered Public Accounting Firm (PCAOB ID No. 34 ).
2. Financial Statement Schedules
Financial statement schedules have been omitted because either they are not applicable, or the required information is included in the financial statements or the notes thereto.
3. Exhibits
Exhibit No.
Subject
3.1
3.2
Amended and Restated Articles of Incorporation of the Company. (Incorporated by reference to Exhibit 3.1 to the Company’s Form 8-K filed June 16, 2010.)
Amended Articles of Incorporation of the Company. (Incorporated by reference to Exhibit 3.1 to the Company’s Form 8-K filed August 23, 2023.)
3.3
Bylaws of the Company. (Incorporated by reference to Exhibit 3. 2 to the Company’s Form 8-K filed August 23, 2023.)
4.1
Description of Securities of Allient Inc. (filed herewith.)
10.1*
2017 Omnibus Incentive Plan. (Incorporated by reference to Exhibit A to the Company’s Proxy Statement dated April 4, 2017.)
10.2*
Employment Agreement between Allied Motion Technologies Inc. and Richard S. Warzala, as Amended and Restated, effective March 22, 2016. (Incorporated by reference to Exhibit 10.1 to the Company’s Form 10-Q for the quarter ended March 31, 2016.)
10.3*
Change of Control Agreement between Allied Motion Technologies Inc. and Richard S. Warzala, as Amended and Restated, effective December 22, 2008. (Incorporated by reference to Exhibit 10.7 to the Company’s Form 10-K for the year ended December 31, 2008.)
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Exhibit No.
Subject
10.4*
Amendment to Employment Agreement and Change of Control Agreement for Richard S. Warzala dated and effective as of December 28, 2017 between Allied Motion Technologies Inc. and Richard S. Warzala. (Incorporated by reference to Exhibit 10.1 to the Company’s Form 8-K filed January 3, 2018.)
10.5*
Second Amendment to Employment Agreement for Richard S. Warzala dated and effective as of August 6, 2020 between Allied Motion Technologies Inc. and Richard S. Warzala. (Incorporated by reference to Exhibit 10.1 to the Company’s Form 8-K filed August 11, 2020.)
10.6*
T hird Amendment to Employment Agreement for Richard S. Warzala dated and effective as of M arch 17 , 2021 between Allied Motion Technologies Inc. and Richard S. Warzala. (Incorporated by reference to Exhibit 10.1 to the Company’s Form 1 0-Q for the quarter ended March 31, 2021 .)
10.7*
Deferred Compensation Plan, as Amended and Restated, effective May 31, 2011. (Incorporated by reference to Exhibit 10.2 to the Company’s Form 10-Q for the quarter ended June 30, 2011.)
10.8*
Form of Employment Agreement (Entered into with Michael R. Leach, Ashish R. Bendre and Geoffrey C. Rondeau each dated March 17, 2021.) (Incorporated by reference to Exhibit 10.2 to the Company’s Form 8-K filed March 23, 2021.)
10.9*
Managing Director’s Contract of Employment between Heidrive GmbH and Helmut Pirthauer dated December 3, 2016. (Incorporated by reference to Exhibit 10.3 to the Company’s Form 8-K filed March 23, 2021.)
10.10*
First Amendment to Managing Director’s Contract of Employment between Heidrive GmbH and Helmut Pirthauer dated March 12, 2018. (Incorporated by reference to Exhibit 10.4 to the Company’s Form 8-K filed March 23, 2021.)
10.11*
Second Amendment to Managing Director’s Contract of Employment between Heidrive GmbH and Helmut Pirthauer dated March 18, 2021. (Incorporated by reference to Exhibit 10.5 to the Company’s Form 8-K filed March 23, 2021.)
10.12*
Director Compensation Program, Stock Ownership Requirements and Stock-in-Lieu of Cash Retainer Plan (In corporated by reference to Exhibit 10.2 to the Company’s Form 10-Q for the quarter ended June 30, 2021. )
10.13
Third Amended and Restated Credit Agreement dated as of March 1, 2024 among Allient Inc. and Allied Motion Technologies B.V. as Borrowers, HSBC Bank USA, National Association, as Administrative Agent, the lenders from time to time party thereto, and HSBC Bank USA, National Association, Wells Fargo Bank, National Association, TD Bank, N.A. and PNC Capital Markets LLC, as Joint Lead Arrangers and Citizens Bank, N.A., as Syndication Agent (Incorporated by reference to Exhibit 10.1 to the Company’s Form 8-K filed March 4, 2024).
19
Allient Inc. Insider Trading Policy
21
List of Subsidiaries (filed herewith).
23.1
Consent of Deloitte & Touche LLP (filed herewith).
31.1
Certification of the Chief Executive Officer pursuant to Rule 13a-14(a) or 15d-14(a) of the Securities Exchange Act of 1934, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
31.2
Certification of the Chief Financial Officer pursuant to Rule 13a-14(a) or 15d-14(a) of the Securities Exchange Act of 1934, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
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Exhibit No.
Subject
32.1
Certification of the Chief Executive Officer pursuant to 18 U.S.C. Section 1350 as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
32.2
Certification of the Chief Financial Officer pursuant to 18 U.S.C. Section 1350 as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
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Allient Inc. Clawback Policy
101.1 SCH
Inline XBRL Taxonomy Extension Schema Document (filed herewith) .
101.2 CAL
Inline XBRL Taxonomy Extension Calculation Linkbase Document (filed herewith) .
101.3 DEF
Inline XBRL Taxonomy Extension Definition Linkbase Document (filed herewith) .
101.4 LAB
Inline XBRL Taxonomy Extension Label Linkbase Document (filed herewith) .
101.5 PRE
Inline XBRL Taxonomy Extension Presentation Linkbase Document (filed herewith) .
104
Cover Page Interactive Data File (formatted as inline XBRL with applicable taxonomy extension information contained in exhibits 101.*) (filed herewith) .
* Denotes management contract or compensatory plan or arrangement.
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SIGNATURES
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.
ALLIENT INC.
By:
/s/ MICHAEL R. LEACH
Michael R. Leach
Senior Vice President & Chief Financial Officer
Date:
March 5, 2024
Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant in the capacities and on the dates indicated.
Signatures
Title
Date
/s/ RICHARD S. WARZALA
President, Chief Executive Officer and
Chairman of the Board
March 5, 2024
Richard S. Warzala
/s/ MICHAEL R. LEACH
Senior Vice President & Chief Financial Officer
March 5, 2024
Michael R. Leach
/s/ RICHARD D. FEDERICO
Lead Director of the Independent Directors
March 5, 2024
Richard D. Federico
/s/ ROBERT B. ENGEL
Director
March 5, 2024
Robert B. Engel
/s/ STEVEN C. FINCH
Director
March 5, 2024
Steven C. Finch
/s/ JAMES J. TANOUS
Director
March 5, 2024
James J. Tanous
/s/ NICOLE R. TZETZO
Director
March 5, 2024
Nicole R. Tzetzo
/s/ MICHAEL R. WINTER
Director
March 5, 2024
Michael R. Winter
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