Item 9A. Controls and Procedures
ITEM 9A. CONTROLS AND PROCEDURES
Evaluation of Disclosure Controls and Procedures
We maintain disclosure controls and procedures that are designed to provide reasonable assurance that information required to be disclosed by us in the reports we file or submit under the Securities Exchange Act of 1934, as amended (the “Exchange Act”), is recorded, pro cessed, summarized and reported within the time periods specified in the SEC’s rules and forms, and that such information is accumulated and communicated to management, including our Chief Executive Officer and Chief Financial Officer, as appropriate, to allow timely decisions regarding required disclosure. In designing and evaluating such controls and procedures, we recognize that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving the desired control objectives.
As required by Rule 13a-15(b) of the Exchange Act, our management, including our Chief Executive Officer and Chief Financial Officer, have evaluated the effectiveness of our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Exchan ge Act) as of the end of the period covered by this annual report. Based on that evaluation, our Chief Executive Officer and Chief Financial Officer have concluded that our disclosure controls and procedures are effective as of December 31, 2024.
Our disclosure controls and procedures are designed to provide reasonable assurance of achieving their objectives as specified above. However, our management, including our Chief Executive Officer and Chief Financial Officer, does not expect that our disclosure controls and procedures will prevent or detect all errors and fraud. Any control system, no matter how well designed and operated, is based upon certain assumptions and can provide only reasonable, not absolute, assurance that its objectives will be met. Further, no evaluation of controls can provide absolute assurance that misstatements due to error or fraud will not occur or that all control issues and instances of fraud, if any, within our Company have been detected.
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 Rule 13a-15(f) and 15d-15(f) under the Exchange Act.
Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. 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.
Under the supervision of our Chief Executive Officer and Chief Financial Officer, management conducted an evaluation of the effectiveness of our internal control over financial reporting as of December 31, 2024 based on the guidelines established in Internal Control—Integrated Framework (2013 Framework) issued by the Committee of Sponsoring Organizations of the Treadway Commission.
On June 3, 2024, we completed our acquisition of Elevated Facility Services Group (Elevated); see Note 4 to the Consolidated Financial Statements for more information. We are currently integrating Elevated into our internal control framework and processes and, pursuant to the SEC's guidance that an assessment of a recently acquired business may be omitted from the scope of an assessment in the year of acquisition, the scope of our assessment of the effectiveness of our internal control over financial reporting as of December 31, 2024 does not include Elevated. The operations of Elevated are 7.5% of our consolidated assets and 1.7% of our consolidated revenue as of and for the year ended December 31, 2024, respectively.
Based on this evaluation, our management concluded that our internal control over financial reporting was effective as of December 31, 2024.
KPMG LLP, our independent registered public accounting firm, has issued its report on the effectiveness of our internal control over financial reporting, which is included in Part II, Item 8 of this annual report on Form 10-K.
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2024 Remediation Activities
In its 2023 Item 9A filed on Form 10-K, management identified material weaknesses over user access controls related to an information technology system resulting from insufficient risk assessment and the identification and risk assessment of processes and internal controls in place at certain third-party service organizations. Management, through the below remediation activities, were able to successfully remediate the previously communicated material weaknesses in existence as of December 31, 2023.
The Company performed the following remediation activities in 2024:
• We implemented third-party software designed to identify segregation of duties conflicts based on established roles and responsibilities;
• We conducted an analysis of conflict reports derived by the third-party software and documented mitigation where established controls exist and operate effectively and designed and implemented new controls to mitigate those conflicts where such controls did not previously exist.
• The Company implemented a process to assess and monitor the population of third-party service organizations, and the related attestation reports related to internal controls at those service organizations, that are important to the Company’s internal control over financial reporting.
As a result of the remediation activities completed during 2024, we remediated the prior year material weaknesses.
Changes in Internal Control over Financial Reporting
Management, together with our CEO and CFO, evaluated the changes in the Company’s internal control over financial reporting during the quarter ended December 31, 2024.
Other than changes described above, there have been no changes in the Company’s internal control over financial reporting (as defined in Rules 13a-15(f) and 15d-15(f) of the Securities Exchange Act of 1934, as amended) during the quarter ended December 31, 2024 that have materially affected, or are reasonably likely to materially affect, the Company’s internal control over financial reporting.
ITEM 9B. OTHER INFORMATION
Rule 10b5-1 Trading Plans
No officers or directors, as defined in Rule 16a-1(f), adopted and/or terminated a “Rule 10b5-1 trading arrangement” or a “non-Rule 10b5-1 trading arrangement,” as defined in Regulation S-K Item 408, during the quarter ended December 31, 2024.
Exchange Act Section 13(r) Disclosure
During the year ended December 31, 2024, specifically, during the third fiscal quarter of 2024, as previously reported on our Form 10-Q filed with the Securities and Exchange Commission on October 31, 2024, Chubb Fire & Security Limited, a United Kingdom subsidiary of the Company (“Chubb U.K.”), engaged in activities that we are required to disclose under Section 13(r) of the Securities Exchange Act of 1934, as amended, as part of the Iran Threat Reduction and Syria Human Rights Act (“ITRA”). Chubb U.K. installs security systems and fire detection equipment and offers inspection services. An internal review has identified that Chubb U.K. provided services at a U.K. office of Bimeh Iran Insurance Co (U.K.) Ltd. (“Bimeh”), a United Kingdom subsidiary of the Iran Insurance Company, which is owned by the Government of Iran. We expect gross revenue and net profit associated with this transaction to be nominal, if any. We do not plan to provide any future equipment or services to Bimeh.
ITEM 9C. DISCLOSURE REGARDING FOREIGN JURISDICTIONS THAT PREVENT INSPECTIONS
None.
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PART III
ITEM 10. DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE
Information on executive officers required by this item is incorporated by reference from "Executive Officers" in Part I of this Annual Report on Form 10-K. Information required by this Item is incorporated by reference from the Company's definitive proxy statement to be filed no later than 120 days after December 31, 2024 (the "Definitive Proxy Statement").
The Company's Board of Directors has adopted an insider trading policy which governs the purchase, sale, and/or other dispositions of our securities by directors, officers, and employees and other covered persons and is designed to promote compliance with insider trading laws, rules and regulations, and listing standards applicable to the Company. A copy of our Insider Trading Policy is filed as Exhibit 19.1 to this Annual Report on Form 10-K. In addition, with regard to the Company’s trading in its own securities, it is the Company’s policy to comply with the federal securities laws and the applicable exchange listing requirements.
ITEM 11. EXECUTIVE COMPENSATION
Information required by this Item will be contained in the Definitive Proxy Statement and is incorporated herein by reference.
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS
Information required by this Item, other than the information regarding our equity plans set forth below required by Item 201(d) of Regulation S-K, will be contained in the Definitive Proxy Statement and is incorporated herein by reference.
Equity Compensation Plan Information
The following table provides information about the Company's equity compensation plans under which the Company's equity securities are authorized for issuance as of December 31, 2024.
As of December 31, 2024
Plan Category Number of Securities to be Issued Upon Exercise of
Outstanding Options, Warrants and Rights
(a) Number of Securities Remaining Available for Future Issuance
Under Equity Compensation Plans (Excluding Securities
Reflected in Column (a))
(c)
Equity compensation plans approved by security holders
2019 Plan (1)
2,421,212 11,998,287
Total 2,421,212 11,998,287
(1) Included in the total number of securities in column (a) is 2,421,212 time-based restricted stock units, EBITDA performance-based restricted stock units, and market-based performance restricted stock units, which have no exercise price.
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE
Information required by this Item will be contained in the Definitive Proxy Statement and is incorporated herein by reference.
ITEM 14. PRINCIPAL ACCOUNTING FEES AND SERVICES
Information required by this Item will be contained in the Definitive Proxy Statement and is incorporated herein by reference.
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PART IV
ITEM 15. EXHIBITS, FINANCIAL STATEMENT SCHEDULES
The following financial statements, schedules and exhibits are filed as part of this Form 10-K:
(a)(1) Financial Statements – the consolidated financial statements and the reports of the Independent Registered Public Accounting firms are listed on pages 55 through 112.
(a)(2) Financial Statement Schedules – Schedule II – Valuation and Qualifying Accounts.
(a)(3) Exhibits including those incorporated by reference – The Exhibit Index below contains a list of exhibits filed or furnished with this Form 10-K.
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Exhibit Index
Incorporated by Reference
(File No. 001-39275)
Exhibit
Number Description
Form
Exhibit Number
Period Covered or Date of Filing
Plans of Acquisition
2.1#
Amendment to Stock Purchase Agreement by and between Carrier Global Corporation, Carrier Investments UK Limited, Chubb Limited and APi Group Corporation dated as of January 3, 2022
Form 10-K
2.4
Year ended December 31, 2021
Organizational Documents
3.1
Certificate of Incorporation of APi Group Corporation
Form S-4
(File No. 333-237553)
3.1
May 1, 2020
3.2 Certificate of Designation of 5.5% Series B Perpetual Convertible Preferred Stock, effective as of January 3, 2021
Form 8-K
3.1
January 3, 2022
3.3 Ce rtificate of El imination of 5.5% S eries B Perpetual Converti ble Preferred Stock
Form 8-K
3.1 March 5, 2024
3.4 Bylaws of APi Group Corporation Certificate of Incorporation of APi Group Corporation
Form S-4
(File No. 333-237553)
3.2
May 1, 2020
Description of Securities and Indentures
4.1*
Description of Capital Stock.
4.2 Indenture, dated as of June 22, 2021, by and among APi Group Corporation, the guarantors party thereto and Computershare Trust Company, N.A.
Form 8-K
4.1
June 22, 2021
4.3 Supplemental Indenture, dated as of April 1, 2022, among APi Group DE, Inc., APi Group Corporation, the guarantors party thereto and Computershare Trust Company, N.A.
Form 8-K
4.2
April 1, 2022
4.4 Form of 4.125% Senior Note due 2029
Form 8-K
4.1 June 22, 2021
4.5 Indenture, dated as of October 21, 2021, between APi Escrow Corp. and Computershare Trust Company, N.A.
Form 8-K
4.1
October 21, 2021
4.6 Supplemental Indenture, dated as of January 3, 2022, among APi DE, the Company, the guaranteeing subsidiaries and Computershare Trust Company, N.A.
Form 8-K
4.2
January 3, 2022
4.7 Form of 4.750% Senior Note due 2029
Form 8-K
4.1 October 21, 2021
Management Contract or Compensatory Plan or Arrangement
10.1(a)†
APi Group Corporation 2019 Equity Incentive Plan
Form S-8
(File No. 333-238891)
10.1
June 3, 2020
10.1(b)†
Form of Restricted Stock Unit Agreement (Non-Employee Directors) – APi Group Corporation 2019 Equity Incentive Plan
Form S-4
(File No. 333-237553)
10.5
May 1, 2020
10.1(c)†
Form of Restricted Stock Unit Agreement (Employees) – APi Group Corporation 2019 Equity Incentive Plan
Form S-4
(File No. 333-237553)
10.6
May 1, 2020
10.1(d)†
Form of Restricted Stock Unit Agreement (Management – Time-Based Vesting) – APi Group Corporation 2019 Equity Incentive Plan.
Form 10-Q
10.18
Quarter ended March 31, 2021
10.1(e)†
Form of Restricted Stock Unit Agreement (Management – Performance-Based Vesting) – APi Group Corporation 2019 Equity Incentive Plan
Form 10-Q
10.19
Quarter ended March 31, 2021
10.2†
APi Group Corporation 2020 Employee Stock Purchase Plan
Form S-8
(File No. 333-238890)
10.1
June 3, 2020
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10.3†
APi Group, Inc. Profit Sharing & 401(k) Plan, as amended
Form S-8
(File No. 333-254675)
10.1
March 25, 2021
10.4(a)†
Executive Employment Agreement, dated as of September 2, 2019, by and among APi Group, Inc., J2 Acquisition Limited and Russell Becker
Form S-4
(File No. 333-237553)
10.1
May 1, 2020
10.4(b)†
Employment Agreement, dated September 1, 2021, by and between APi Group Corporation and Kevin Krumm
Form 8-K
10.2
September 8, 2021
10.4(c)†
Offer Letter, dated January 13, 2022, between APi Group Corporation and Kristina Morton
Form 10-K
10.30
Year ended December 31, 2022
10.4(d)†
Offer Letter, dated June 23, 2022, between APi Group Corporation and Louis Lambert
Form 10-K
10.31
Year ended December 31, 2022
10.5†
Form of Amended and Restated Director and Officer Indemnification Agreement
Form S-4
(File No. 333-237553)
10.7
May 1, 2020
10.6†
Executive Officer Severance Policy
Form 10-K
10.29
Year ended December 31, 2022
10.7†
Form of Option Deeds
Form S-4
(File No. 333-237553)
10.12
May 1, 2020
Financing and Credit Related Arrangements
10.8(a)
Credit Agreement, dated as of October 1, 2019, by and among APi Group DE, Inc., as borrower, J2 Acquisition Limited, the guarantors from time to time party thereto, the lenders from time to time party thereto, and Citibank, N.A., as administrative agent and as collateral agent
Form S-4
(File No. 333-237553)
10.8
May 1, 2020
10.8(b)
Amendment No. 1 to Credit Agreement, dated as of October 22, 2020, by and among APi Group DE, Inc., as borrower, APi Group Corporation, the guarantors from time to time party thereto, the lenders from time to time party thereto, and Citibank, N.A., as administrative agent and as collateral agent
Form 10-Q
10.14
Quarter ended September 30, 2020
10.8(c)
Amendment No. 2 to Credit Agreement , dated December 16, 2021, among APi Group DE, Inc., APi Group Corporation, the subsidiary guarantors from time to time party thereto, the lenders and letter of credit issuers from time to time party thereto, and Citibank, N.A. as administrative agent and collateral agent
Form 8-K
10.1
December 20, 2021
10.8(d)
Amendment No. 3 to Credit Agreement, dated as of May 19, 2023, by and among APi Group DE, Inc., as borrower, APi Group Corporation, the guarantors from time to time party thereto, the lenders from time to time party thereto, and Citibank, N.A., as administrative agent and as collateral agent
Form 10-Q
10.24
Quarter ended June 30, 2023
10.8(e)
Amendment No. 4 to Credit Agreement , dated as of October 11, 2023, among APi Group DE, Inc., as borrower, APi Group Corporation, the subsidiary guarantors from time to time party thereto, the lenders from time to time party thereto , and Citibank, N.A. as administrative agent and collateral agent
Form 8-K
10.1
October 13, 2023
10.8(f) Amendment No. 5 to Credit Agreement , dated as of February 28, 2024, by and amo ng APi Group DE, Inc., as borrow er, APi Group Corporation, the subsidiary guarantors from time to time party thereto, the lenders from time to time party thereto, and Citibank, N.A. as administrative agent and collateral agent
Form 8-K 10.2 February 28, 2024
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10.8(g)
Amendment No. 6 to C redi t Agree ment , dated as of May 10, 2024 , by and among APi Group DE, Inc., as borrower, APi Group Corporation, the subsidiary guarantors from time to time party thereto, the lenders from time to time party thereto, and Citibank, N.A. as administrative agent and collateral agent
Form 8-K
10.1 May 13, 2024
10.8(h)
Amendment No. 7 to Credit Agreement, dated February 14 , 202 5 , by and among APi Group DE, Inc., as borrower, APi Group Corporation, the subsidiary guarantors from time to time party thereto, the lenders from time to time party thereto, and Citibank, N.A. as administrative agent and collateral agent
Form 8-K
10.1 February 19, 2025
10.9 Pledge and Security Agreement, dated as of October 1, 2019, by and among APi Group DE, Inc., as borrower, J2 Acquisition Limited, the grantors from time to time party thereto, and Citibank, N.A., as administrative agent and as collateral agent
Form S-4
(File No. 333-237553)
10.9
May 1, 2020
10.10 Securities Purchase Agreement by and among APi Group Corporation, BTO Juno Holdings L.P. and Blackstone Tactical Opportunities Fund – FD L.P. dated as of July 26, 2021
Form 8-K
10.1
July 30, 2021
10.11 Securities Purchase Agreement by and among APi Group Corporation, Viking Global Equities Master Ltd. and Viking Global Equities II LP dated as of July 26, 2021
Form 8-K
10.2
July 30, 2021
10.12 Conversion and Repurchase Agreement, dated February 28, 2024, by and among APi Group Corporation, Juno Lower Holdings L.P., FD Juno Holdings L.P., Viking Global Equities Master Ltd. and Viking Global Equities II LP.
Form 8-K 10.1 February 28, 2024
Other Agreement
10.13 Registration Rights Agreement, dated March 24, 2020, by and between APi Group Corporation and Viking Global Opportunities Liquid Portfolio Sub-Master LP
Form S-4
(File No. 333-237553)
10.13
May 1, 2020
10.14 Registration Rights Agreement, dated January 3, 2022, by and among APi Group Corporation, Juno Lower Holdings L.P. and FD Juno Holdings L.P.
Form 8-K
10.4
January 3, 2022
10.15 Registration Rights Agreement, dated January 3, 2022, by and among APi Group Corporation, Viking Global Equities Master Ltd. and Viking Global Equities II LP
Form 8-K
10.5
January 3, 2022
10.16 Advisory Services Agreement, dated October 1, 2019, by and between APi Group Corporation and Mariposa Capital, LLC
Form S-4
(File No. 333-237553)
10.10
May 1, 2020
Other Exhibits
19.1* Insider Trading Policy, adopted and approved as of December 11, 2024
21.1* List of subsidiaries of the registrant.
23.1* Consent of KPMG LLP.
31.1*
Certification by Russell Becker, Chief Executive Officer, pursuant to Exchange Act Rules 13a-14 and 15d-14 as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
31.2*
Certification by G lenn David Jackola , I nterim Chief Financial Officer, pursuant to Exchange Act Rules 13a-14 and 15d-14 as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
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32.1**
Certification by Russell Becker, 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 by Glenn David Jackola , Interim Chief Financial Officer, pursuant to 18 U.S.C. Section 1350 as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
95.1*
Mine Safety Disclosures
97.1 APi Group Corporation Executive Officer Clawback Policy
Form 10-K
97.1 Year ended December 31, 2023
101.INS*
Inline XBRL Instance 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*
Cover Page Interactive Data File (embedded within the Inline XBRL document)
_____________________________________
* Filed herewith.
** Furnished herewith.
† Management contract or compensatory plan or arrangement.
# The schedules to these agreements have been omitted pursuant to Item 601(b)(2) of Regulation S-K. The registrant agrees to furnish a copy of any schedule omitted from the agreements to the SEC upon request.
ITEM 16. FORM 10-K SUMMARY
Not applicable.
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APi Group Corporation
SCHEDULE II – VALUATION AND QUALIFYING ACCOUNTS
(in millions)
Balance at beginning of period Credit loss expense Write-offs Balance at end of period
Allowance for doubtful accounts:
Year ended December 31, 2024 $ 5 $ 4 $ — $ 9
Year ended December 31, 2023 3 3 ( 1 ) 5
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SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, as amended, the Registrant has duly caused this Report to be signed on its behalf by the undersigned, thereunto duly authorized .
APi Group Corporation
Date: February 26, 2025
By: /s/ Russell A. Becker
Russell A. Becker
President and Chief Executive Officer
(principal executive officer)
Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, this Report has been signed below by the following persons on behalf of the Registrant in the capacities and on the dates indicated.
Signature Title Date
/s/ Russell A. Becker President and Chief Executive Officer (principal executive officer) February 26, 2025
Russell A. Becker
/s/ Glenn David Jackola Interim Chief Financial Officer (principal financial officer) February 26, 2025
Glenn David Jackola
/s/ Sir Martin E. Franklin Co-Chairman of the Board February 26, 2025
Sir Martin E. Franklin
/s/ James E. Lillie Co-Chairman of the Board February 26, 2025
James E. Lillie
/s/ Ian G. H. Ashken Director February 26, 2025
Ian G. H. Ashken
/s/ Paula D. Loop Director February 26, 2025
Paula D. Loop
/s/ Anthony E. Malkin Director February 26, 2025
Anthony E. Malkin
/s/ Thomas V. Milroy Director February 26, 2025
Thomas V. Milroy
/s/ Cyrus D. Walker Director February 26, 2025
Cyrus D. Walker
/s/ Carrie A. Wheeler Director February 26, 2025
Carrie A. Wheeler
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