What changed in this filing

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Item 9A. Controls and Procedures

2022-03-11 compared with 2021-03-05 · 56 added, 119 removed, 167 unchanged (51% of the section changed)

6 unchanged sentences

Changes in internal controls over financial reporting.

We are finalizing the process of integrating our acquisition of Parcus Medical and Arthrosurface, including evaluating our internal controls, and designing and implementing an internal control structure over Parcus Medical and Arthrosurface’s operations, which will be complete in the first quarter of 2021.

During the year ended December 31, 2020 we implemented controls over the accounting and disclosures related to purchase accounting and integration of the Parcus Medical and Arthrosurface businesses, as well as enhanced controls surrounding the goodwill impairment assessment.

As a result of the COVID-19 pandemic, certain employees began working remotely in March 2020.

Additionally, we have enhanced existing controls by implementing more frequent forecasting and increasing board oversight.

We are continually monitoring and assessing the COVID-19 situation to determine any potential impact on the design and operating effectiveness of our internal controls over financial reporting.

There were no other material changes in our internal control over financial reporting during the year ended December 31, 2020, that have materially affected, or were reasonably likely to materially affect, our internal control over financial reporting.

Management’s Report on Internal Control over Financial Reporting

During the fourth quarter, we completed the implementation of our enterprise resource planning software at our Parcus Medical and Arthrosurface subsidiaries.

In this regard, we reviewed and modified our internal controls, as necessary.

There were no other changes in our internal control over financial reporting during the three months ended December 31, 2021 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting. 

Management ’

s Report on Internal Control over Financial Reporting

Our management is responsible for establishing and maintaining adequate internal control over financial reporting as defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act.

3 unchanged sentences

Our management assessed the effectiveness of our internal control over financial reporting as of December 31, 2021.

In making this assessment, management used the criteria set forth by the Committee of Sponsoring Organizations of the Treadway Commission in its 2013 Internal Control—Integrated Framework .

In making this assessment, management used the criteria set forth by the Committee of Sponsoring Organizations of the Treadway Commission in its 2013 Internal Control —

Integrated Framework .

Based on its assessment and those criteria, our management believes that our company maintained effective internal control over financial reporting as of December 31, 2021.

The foregoing assessment excludes certain elements of Parcus Medical and Arthrosurface’s internal control over financial reporting because they were acquired by the Company in a business combination on January 24, 2020 and February 3, 2020, respectively (see Note 3 –

Business Combinations in the Notes to Consolidated Financial Statements for additional information).

Subsequent to the acquisition, certain elements of Parcus Medical and Arthrosurface’s internal control over financial reporting and related processes were integrated into the Company’s existing systems and internal control over financial reporting.

Those controls that were not integrated have been excluded from our assessment of the effectiveness of internal control over financial reporting as of December 31, 2020.

This exclusion is in accordance with the general guidance issued by the Staff of the SEC that an assessment of a recent business acquisition may be omitted from management’s report on internal control over financial reporting in the first year of consolidation.

The exclusion represents controls covering approximately 14% of consolidated assets and 27% of consolidated revenues.

The effectiveness of our internal control over financial reporting as of December 31, 2020 has been audited by Deloitte & Touche LLP, an independent registered public accounting firm, as stated in their report which is included below in this Item 9A of this annual report on Form 10-K.

The effectiveness of our internal control over financial reporting as of December 31, 2021 has been audited by Deloitte & Touche LLP, an independent registered public accounting firm, as stated in their report which is included below in this Item 9A.

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

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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, 2021, of the Company and our report dated March 10, 2022, expressed an unqualified opinion on those 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 Parcus Medical, LLC acquired on January 24, 2020 and Arthrosurface, Inc.

acquired on February 3, 2020, and whose combined financial statements constitute 14% of total assets (excluding goodwill and intangibles, which are included within the scope assessment) and 27% of revenues of the consolidated financial statement amounts as of and for the year ended December 31, 2020.

Accordingly, our audit did not include the internal control over financial reporting at Parcus Medical, LLC and Arthrosurface, Inc.

Basis for Opinion

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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

Boston, Massachusetts

March 10, 2022

OTHER INFORMATION

On October 28, 2021, the Board of Directors elected Sheryl L.

Conley as a member of the Board effective as of October 28, 2021.

DISCLOSURE REGARDING FOREIGN JURISDICTIONS THAT PREVENT INSPECTIONS

Not applicable.

DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE

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Consolidated Statements of Operations and Comprehensive Income

Consolidated Statements of Stockholders’

Consolidated Statements of Stockholders’ Equity

Consolidated Statements of Cash Flows

1 unchanged sentence

(2)            Schedules

 Schedules have been omitted as all required information has been disclosed in the financial statements and related footnotes. 

(3)            Exhibits

9 unchanged sentences

and Farley White Wiggins, LLC, relating to 32 Wiggins Avenue, Bedford, Massachusetts

Lease Agreement, dated December 30, 2009, between Fidia Farmaceutici S.p.A.

and Fidia Advanced Biopolymers S.r.l., relating to Via Ponte della Fabbrica 3/A and 3/B Abano Terme, Padua, Italy

Amendment No.

1 to Lease Agreement, dated June 18, 2010, between Fidia Farmaceutici S.p.A.

and Anika Therapeutics S.r.l.

(formerly Fidia Advanced Biopolymers S.r.l.) relating to Via Ponte Della Fabbrica 3/A and 3/B Abano Terme, Padua, Italy

Amendment No.

2 to Lease Agreement, dated September 20, 2010, between Fidia Farmaceutici S.p.A.

and Anika Therapeutics S.r.l.

(formerly Fidia Advanced Biopolymers S.r.l.) relating to Via Ponte Della Fabbrica 3/A and 3/B Abano Terme, Padua, Italy

Translation of Amendment No.

3 to Lease Agreement, dated April 16, 2012, between Fidia Farmaceutici S.p.A.

and Anika Therapeutics S.r.l.

(formerly Fidia Advanced Biopolymers S.r.l.) relating to Via Ponte Della Fabbrica 3/A and 3/B Abano Terme, Padua, Italy

Translation of Amendment No.

4 to Lease Agreement, dated February 22, 2016, between Fidia Farmaceutici S.p.A.

and Anika Therapeutics S.r.l.

(formerly Fidia Advanced Biopolymers S.r.l.) relating to Via Ponte Della Fabbrica 3/A and 3/B Abano Terme, Padua, Italy

Translation of Lease Agreement, dated October 9, 2015, between Anika Therapeutics S.r.l.

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and Consorzio Zona Industriale E Porto Fluviale di Padova relating to Land Registry of the Municipality of Padova, Page 148, cadastral map 516 and 517

Lease Agreement, dated November 26, 2012, between High Properties and Parcus Medical LLC relating to 6423 Parkland Drive, Suites 101 and 102, Sarasota, FL

Amendment #1 to the Lease, Renewal Amendement, dated January 4, 2018, between High Properties and Parcus Medical LLC relating to 6423 Parkland Drive, Suites 101 and 102, Sarasota, FL

Lease Agreement, dated May 25, 2017, between High Properties and Parcus Medical, LLC relating to 6455 Parkland Drive, Suite 101, Sarasota, FL

Credit Agreement, dated as of October 24, 2017, among Anika Therapeutics, Inc., certain subsidiaries of Anika Therapeutics, Inc.

3 unchanged sentences

First Amendment effective August 13, 2019, with respect to the Credit Agreement dated as of October 24, 2017 and the Security and Pledge Agreement dated as of October 24, 2017

Second Amendment effective May 14, 2020, with respect to the Credit Agreement dated as of October 24, 2017 and the Security and Pledge Agreement dated as of October 24, 2017

Sale and Purchase Agreement, dated December 30, 2009, by and between Fidia Farmaceutici S.p.A.

and Anika Therapeutics, Inc.

Tolling Agreement, dated December 30, 2009, between Fidia Farmaceutici S.p.A.

and Fidia Advanced Biopolymers S.r.l.

Amendment No.

1 to Tolling Agreement, dated January 1, 2012, between Fidia Farmaceutici S.p.A.

and Anika Therapeutics S.r.l.

(formerly Fidia Advanced Biopolymers S.r.l.) 

Registration Rights Agreement, dated December 30, 2009, between Anika Therapeutics, Inc.

and Fidia Farmaceutici S.p.A.

Second Amendment effective May 14, 2020, with respect to the Credit Agreement dated as of October 24, 2017 and First Amendment to the Security and Pledge Agreement dated as of October 24, 2017

Third Amendment to Credit Agreement dated as of November 12, 2021, by and among Anika Therapeutics, Inc., the Subsidiary Guarantors party thereto, the Lenders party thereto, Bank of America, N.A., as administrative agent, L/C Issuer and Swingline Lender, and the other parties thereto

License Agreement, dated as of December 20, 2003, by and between Anika Therapeutics, Inc.

2 unchanged sentences

and DePuy Mitek, Inc.

†10.10

Anika Therapeutics, Inc.

Senior Executive Incentive Compensation Plan

†10.11

Anika Therapeutics, Inc.

Non-Employee Director Compensation Policy

Non-Employee Director Compensation Policy (restated as of February 9, 2022)

†10.9a

1 unchanged sentence

†10.9b

Amendment to Second Amended and Restated 2003 Stock Option and Incentive Plan (adopted April 11, 2013)

Amendment to Second Amended and Restated 2003 Stock Option and Incentive Plan (adopted April 11, 2013)

†10.9c

4 unchanged sentences

Anika Therapeutics, Inc.

2017 Omnibus Incentive Plan

†10.13b

Anika Therapeutics, Inc.

2017 Omnibus Incentive Plan (as amended effective June 16, 2021)

†10.13c

Anika Therapeutics, Inc.

2017 Omnibus Incentive Plan (as amended effective June 16, 2020)

†10.13d

†10.10b

Form of Notice of Grant of Incentive Stock Option, including Terms and Conditions of Stock Option, granted under Anika Therapeutics, Inc.

2017 Omnibus Incentive Plan.

†10.13e

†10.10c

Form of Notice of Grant of Nonqualified Stock Option, including Terms and Conditions of Stock Option, granted under Anika Therapeutics, Inc.

2017 Omnibus Incentive Plan

†10.13f

†10.10d

Form of Notice of Grant of Restricted Stock Award, including Terms and Conditions of Restricted Stock Award, granted under Anika Therapeutics, Inc.

2017 Omnibus Incentive Plan.

†10.13g

†10.10e

Form of Notice of Grant of Restricted Stock Units, including Terms and Conditions of Restricted Stock Units, granted under Anika Therapeutics, Inc.

2017 Omnibus Incentive Plan

†10.13h

†10.10f

Form of Notice of Grant of Deferred Stock Awards Units, including Terms and Conditions of Deferred Stock Units, granted under Anika Therapeutics, Inc.

2017 Omnibus Incentive Plan

†10.14a

Employment Agreement, dated February 25, 2020, by and between Anika Therapeutics, Inc., and Dr.

†10.14b

†10.10g

Anika Therapeutics, Inc.

2021 Employee Stock Purchase Plan (adopted March 17, 2021)

†10.10h

Anika Therapeutics, Inc.

2021 Inducement Plan (adopted November 4, 2021)

†10.10i

Form of Notice of Grant of Nonqualified Stock Option, including Terms and Conditions of Stock Option, granted under Anika Therapeutics, Inc.

2021 Inducement Plan

†10.10j

Form of Notice of Grant of Restricted Stock Units Award, including Terms and Conditions of Restricted Stock Award, granted under Anika Therapeutics, Inc.

2021 Inducement Plan

†10.10k

Form of Notice of Grant of Deferred Stock Awards Units, including Terms and Conditions of Deferred Stock Units, granted under Anika Therapeutics, Inc.

2021 Inducement Plan

†10.11

Employment Agreement, dated April 23, 2020, by and between Anika Therapeutics, Inc., and Dr.

†10.12

Offer letter dated as of July 29, 2020 between Anika Therapeutics, Inc.

Executive Retention Agreement, dated August 10, 2020, by and between Anika Therapeutics, Inc.

and Michael Levitz

†10.16a

Employment Agreement, dated July 27, 2017, by and between Anika Therapeutics, Inc.

and Joseph Darling

†10.16b

Amendment No.

1 dated March 8, 2018 to Employment Agreement dated July 27, 2017 by and between Anika Therapeutics, Inc.

and Joseph G.

†10.16c

Amendment No.

2 dated April 9, 2019 to Employment Agreement dated July 27, 2017, as amended March 8, 2018, by and between Anika Therapeutics, Inc.

and Joseph G.

†10.17a

Employment Agreement, dated March 22, 2010, between Anika Therapeutics, Inc.

and Sylvia Cheung

†10.17b

Amendment No.

1, dated December 8, 2010, to the Employment Agreement, dated March 22, 2010, by and between Anika Therapeutics, Inc.

and Sylvia Cheung

†10.17c

Amendment No.

2 dated April 9, 2019 to the Employment Agreement, dated March 22, 2010, as amended December 8, 2010 by and between Anika Therapeutics, Inc.

and Sylvia Cheung

†10.18a

Employment Agreement, dated September 10, 2009, between Anika Therapeutics, Inc.

†10.18b

Amendment No.

1 to Employment Agreement, dated December 1, 2010, by and between Anika Therapeutics, Inc.

†10.19a

Employment Agreement, dated October 17, 2008, between Anika Therapeutics, Inc.

and Charles H.

Sherwood, Ph.D.

†10.19b

Amendment No.

1 to Employment Agreement, dated December 8, 2010, by and between Anika Therapeutics, Inc.

and Charles H.

Sherwood, Ph.D.

Consulting Agreement between Anika Therapeutics, Inc.

and Charles H.

Sherwood, Ph.D., dated March 8, 2018

†10.13

1 unchanged sentence

and Thomas Finnerty

†10.22

Separation Agreement, effective July 8, 2019, by and between Anika Therapeutics, Inc.

and Edward S.

Consulting Agreement, effective July 5, 2019, by and between Anika Therapeutics, Inc.

and Edward S.

Fixed Dollar Accelerated Share Repurchase Transaction Confirmation entered into as of May 24, 2018 by and between Morgan Stanley & Co.

4 unchanged sentences

Consent of Deloitte & Touche LLP

Certification of Principal Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

Certification of Principal Executive Officer pursuant to Section 

302 of the Sarbanes-Oxley Act of 2002

Certification of Principal Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

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(ii) Consolidated Statements of Operations and Comprehensive Income for the Years Ended December 31, 2021, December 31, 2020, and December 31, 2019;

(iii) Consolidated Statements of Stockholders’

Equity for the Years Ended December 31, 2019, December 31, 2018, and December 31, 2017;

(iii) Consolidated Statements of Stockholders’ Equity for the Years Ended December 31, 2021, December 31, 2020, and December 31, 2019;

(iv) Consolidated Statements of Cash Flows for the Years Ended December 31, 2021, December 31, 2020, and December 31, 2019;

17 unchanged sentences

/s/ CHERYL BLANCHARD

Chief Executive Officer

President and Chief Executive Officer

Blanchard, Ph.D.

2 unchanged sentences

/s/ MICHAEL LEVITZ

Chief Financial Officer

Executive Vice President, Chief Financial Officer and Treasurer

Michael Levitz

(Principal Accounting Officer and Principal Financial Officer)

(Principal Financial Officer)

March 10, 2022

/s/ IAN MCLEOD

Vice President, Chief Accounting Officer

(Principal Accounting Officer)

March 10, 2022

/s/ JEFFERY S.

1 unchanged sentence

March 10, 2022

/s/ JOSEPH L.

/s/ SHERYL L.

March 10, 2022

12 unchanged sentences

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 9A. Controls and Procedures