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 the controls and procedures will meet their objectives. In designing and evaluating the disclosure controls and procedures, management recognizes that any controls and procedures, no matter how well designed and operated, can provide only reasonable, not absolute, assurance that the desired control objectives are met. Further, the design of a control system is a resource constraint, therefore, in reaching a reasonable level of assurance, management applies its judgment in evaluating the cost-benefit relationship of possible controls and procedures. Because of the inherent limitations in a cost-effective control system, misstatements due to error or fraud may occur and may not be detected.
Management, including our Chief Executive Officer (who is designated as our principal executive officer) and our Chief Financial Officer and Chief Operating Officer (who is designated as our principal financial officer), evaluated the effectiveness of our disclosure controls and procedures as defined in Rule 13a-15(e) and 15d-15(e) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), as of December 31, 2024. Based on that evaluation, our Chief Executive Officer and Chief Financial Officer and Chief Operating Officer have concluded that our disclosure controls and procedures were effective at a reasonable assurance level, as of December 31, 2024.
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 Rule 13a-15(f) under the Exchange Act). Management conducted an assessment of the effectiveness of our internal control over financial reporting as of December 31, 2024 based on the criteria set forth in “Internal Control-Integrated Framework” (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Based on this assessment, management has concluded that our internal control over financial reporting was effective as of December 31, 2024 based on those criteria.
Management reviewed the results of its assessment with our Audit Committee. The effectiveness of our internal control over financial reporting as of December 31, 2024 has been audited by Deloitte & Touche LLP, and their opinion is stated in their audit report, which is included in Part II, Item 8 of this Annual Report on Form 10-K.
Remediation of Previously Reported Material Weakness
As previously reported in Part II, Item 9A. “Controls and Procedures” of our Annual Report on Form 10-K for the fiscal year ended December 31, 2023, in connection with our assessment of the effectiveness of internal control over financial reporting as of December 31, 2023, we identified control deficiencies in the area of our ITGC related to (i) user access and segregation of duty controls that restrict user and privileged access to appropriate personnel; (ii) program change management controls; and (iii) certain computer operations controls that, when aggregated, arose to a material weakness.
We have completed execution of our remediation plan for this material weakness and, as of December 31, 2024, successfully remediated this material weakness by implementing the following measures:
• Implemented a software solution to identify and facilitate review of changes made to our Enterprise Resource Planning (“ERP”) system via newly designed detective controls to supplement our existing preventative controls.
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• Implemented a tool to better monitor access via a secure gateway to our operating systems, as well as better management of credentials across all financially impactful applications and the underlying internally managed infrastructure.
• Enhanced our user access review procedures to increase scope and precision.
• Minimized number of users with elevated access within our ERP system, limiting sensitive roles to only individuals with functional requirements.
• Redesigned and implemented ITGCs and deployment of additional training to further strengthen the overall control environment.
Changes in Internal Control over Financial Reporting
Other than the remediation efforts completed and described above, there were no changes in our internal control over financial reporting during the fiscal quarter ended December 31, 2024 that materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.
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Item 9B. Other Information
Trading Arrangements
During the quarter ended December 31, 2024, our directors and officers (as defined in Rule 16a-1(f) under the Exchange Act) adopted or terminated the contracts, instructions or written plans for the purchase or sale of Arlo's securities set forth in the table below:
Type of Trading Arrangement
Name and Position Action Action Date Rule 10b5-1 (1)
Non-Rule 10b5-1 (2)
Total Shares to be Sold Expiration Date
Jocelyn Carter-Miller ,
Director
Adoption November 27, 2024 (3)
X 20,000 October 8, 2025
Kurtis Binder ,
Chief Financial Officer and Chief Operating Officer
Termination December 13, 2024 (4)
X 131,213 December 13, 2024
_________________________
(1) Contract, instruction or written plan intended to satisfy the affirmative defense conditions of Rule 10b5-1(c) under the Exchange Act.
(2) “Non-Rule 10b5-1 trading arrangement” as defined in Item 408(c) of Regulation S-K under the Exchange Act.
(3) Adopted for personal tax planning purposes.
(4) Represents the termination of a written plan intended to satisfy the affirmative defense conditions of Rule 10b5-1(c) adopted on November 29, 2023 which expired in accordance with its terms.
Item 9C. Disclosure Regarding Foreign Jurisdictions that Prevent Inspections
Not applicable.
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PART III
Item 10. Directors, Executive Officers and Corporate Governance
The information required by this item and not set forth below is incorporated by reference to our definitive proxy statement for our 2025 Annual Meeting of Stockholders to be filed with the SEC within 120 days after the end of the fiscal year ended December 31, 2024 (the “Proxy Statement”), under the sections headed “Election of Directors” and “Board of Directors and Corporate Governance.”
We have adopted a Code of Ethics that applies to our Chief Executive Officer and senior financial officers, including our Chief Financial Officer, as required by the SEC. The current version of our Code of Ethics can be found on our Internet site at http://www.arlo.com. Additional information required by this Item regarding our Code of Ethics is incorporated by reference to the information contained in the section captioned “Code of Business Conduct and Ethics” in our Proxy Statement.
We intend to satisfy the disclosure requirement under Item 5.05 of Form 8-K regarding an amendment to, or waiver from, a provision of our Code of Ethics by posting such information on our website at http://www.arlo.com within four business days following the date of such amendment or waiver.
Item 11. Executive Compensation
The information required by this item is incorporated by reference to our Proxy Statement under the captions “Compensation and Human Capital Committee” and “Executive Compensation”, except as to information disclosed therein pursuant to Item 402(v) of Regulation S-K relating to pay versus performance.
Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters
The information required by this item is incorporated by reference to our Proxy Statement under the caption “Security Ownership of Certain Beneficial Owners and Management.”
Item 13. Certain Relationships and Related Transactions, and Director Independence
The information required by this item is incorporated by reference to our Proxy Statement under the captions “Certain Relationships and Related Transactions” and “Board of Directors and Corporate Governance.”
Item 14. Principal Accountant Fees and Services
The information required by this item is incorporated by reference to our Proxy Statement under the caption “Ratification of Appointment of Independent Registered Public Accounting Firm.”
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PART IV
Item 15. Exhibit and Financial Statement Schedules
(a) The following documents are filed as part of this report:
(1) Consolidated Financial Statements.
The following consolidated financial statements of Arlo Technologies, Inc. are filed as part of this Annual Report on Form 10-K in Item 8, Financial Statements and Supplementary Data .
Page
Report of Independent Registered Public Accounting Firm
( Deloitte & Touche LLP ; Costa Mesa, California ; PCAOB ID: 34 )
72
Report of Independent Registered Public Accounting Firm
( PricewaterhouseCoopers LLP ; San Jose, California ; PCAOB ID: 238 )
74
Consolidated Balance Sheets as of December 31, 2024 and 2023
75
Consolidated Statements of Comprehensive Loss for the three years ended December 31, 2024, 2023 and 2022
76
Consolidated Statements of Stockholders’ Equity for the three years ended December 31, 2024, 2023 and 2022
77
Consolidated Statements of Cash Flows for the three years ended December 31, 2024, 2023 and 2022
78
Notes to Consolidated Financial Statements 79
(2) Financial Statement Schedules.
All financial statement schedules have been omitted as the information is not required under the related instructions or is not applicable or because the information required is already included in the consolidated financial statements or the notes to those consolidated financial statements.
(3) Exhibits.
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INDEX TO EXHIBITS
Incorporated by Reference
Exhibit Number
Exhibit Description Form Date Number Filed Herewith
3.1
Amended and Restated Certificate of Incorporation of Arlo Technologies, Inc.
8-K 8/7/2018 3.1
3.2
Amended and Restated Bylaws of Arlo Technologies, Inc.
8-K 8/7/2018 3.2
4.1
Common Stock Certificate of Arlo Technologies, Inc.
S-1/A 7/23/2018 4.1
4.2
Description of Common Stock of Arlo Technologies, Inc.
10-K 2/26/2021 4.2
10.1
Master Separation Agreement, by and between NETGEAR, Inc. and Arlo Technologies, Inc. dated as of August 2, 2018
8-K 8/7/2018 10.1
10.2
Transition Services Agreement, by and between NETGEAR, Inc. and Arlo Technologies, Inc. dated as of August 2, 2018
8-K 8/7/2018 10.2
10.3
Tax Matters Agreement, by and between NETGEAR, Inc. and Arlo Technologies, Inc. dated as of August 2, 2018
8-K 8/7/2018 10.3
10.4
Employee Matters Agreement, by and between NETGEAR, Inc. and Arlo Technologies, Inc. dated as of August 2, 2018
8-K 8/7/2018 10.4
10.5
Intellectual Property Rights Cross-License Agreement, by and between NETGEAR, Inc. and Arlo Technologies, Inc. dated as of August 2, 2018
8-K 8/7/2018 10.5
10.6
Registration Rights Agreement, by and between NETGEAR, Inc. and Arlo Technologies, Inc. dated as of August 2, 2018
8-K 8/7/2018 10.6
10.8 *
Confirmatory Employment Letter with Matthew McRae
8-K 8/7/2018 10.7
10.9 *
Confirmatory Employment Letter with Christine Gorjanc
8-K 8/7/2018 10.8
10.10 *
Confirmatory Employment Letter with Patrick Collins
8-K 8/7/2018 10.9
10.11 *
Confirmatory Employment Letter with Brian Busse
8-K 8/7/2018 10.10
10.12 *
Change in Control and Severance Agreement
8-K 8/7/2018 10.11
10.13 *
2018 Employee Stock Purchase Plan
10-K 2/22/2019 10.14
10.14 *
Indemnification Agreement for directors and executive officers
S-1/A 7/23/2018 10.16
10.15
Cooperation Agreement, dated April 30, 2019, by and among Arlo Technologies, Inc. and the VIEX Parties listed therein
8-K 5/1/2019 10.1
10.16 †
Asset Purchase Agreement, by and between Arlo Technologies, Inc. and Verisure S.à.r.l. dated as of November 4, 2019
10-K 2/28/2020 10.23
10.17 †
Supply Agreement, by and between Arlo Technologies, Inc. and Verisure S.à.r.l. dated as of November 4, 2019, as amended on June 23, 2020, November 1, 2021, and December 1, 2021
10-K 3/2/2022 10.23
10.18 *
Confirmatory Employment Letter with Gordon Mattingly
10-Q 8/6/2020 10.2
10.19 *
Form of Change in Control and Severance Agreement for non-CEO Executive Officers
10-Q 8/6/2020 10.3
10.21
Sublease, by and between Arlo Technologies, Inc. and Vocera Communications, Inc., dated as of May 25, 2021
10-Q 8/5/2021 10.1
10.22 *
Performance Stock Unit Award under 2018 Equity Incentive Plan to Matthew McRae, dated September 9, 2021
10-Q 11/10/2021 10.2
10.23
Credit Agreement, by and among Arlo Technologies, Inc., the lenders that are from time to time parties thereto and HSBC Bank USA, National Association, as Administrative Agent, Issuing Bank and Swingline Lender, dated as of November 14, 2024
8-K 11/18/2024 10.1
10.24 *
Form of Service and Cash Balance Performance-Based Restricted Stock Unit Agreement for Executive Officers
10-Q 5/11/2022 10.1
10.25 *
Form of Service and Stock Market Performance-Based Restricted Stock Unit Agreement for Executive Officers
10-Q 5/11/2022 10.2
10.26 *
Performance Stock Unit Award under 2018 Equity Incentive Plan
10-Q 5/11/2022 10.3
10.27 *
Form of Notice of Stock Option Grant (Change in Control)
10-Q 11/9/2022 10.1
10.28 *
Form of Notice of Stock Option Grant (Global)
10-Q 11/9/2022 10.2
10.29 *
Form of Notice of Grant of Restricted Stock Units (Standard)
10-Q 11/9/2022 10.3
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10.30 *
Form of Notice of Grant of NEO Service and Performance-Based Stock Option (IPO Grant)
10-Q 11/9/2022 10.4
10.31 *
Form of Notice of Grant of Restricted Stock Units (Non-Employee Director)
10-Q 11/9/2022 10.5
10.32 *
Form of Notice of Grant of Service and Performance-Based Restricted Stock Units (Cash Balance)
10-Q 11/9/2022 10.6
10.33 *
Form of Notice of Grant of Service and Performance-Based Restricted Stock Units (TSR)
10-Q 11/9/2022 10.7
10.34 *
Employment Offer Letter with Kurt Binder, dated August 23, 2022
8-K 8/26/2022 10.1
10.35 *
Arlo Technologies, Inc. 2018 Equity Incentive Plan, as amended
8-K 8/26/2022 10.2
10.36 *
Form of Retention Agreement
10-Q 11/9/2022 10.10
10.37 *
Form of Notice of Grant of Performance-Based Restricted Stock Units (Retention Agreement)
10-Q 11/9/2022 10.11
10.38 *
Form of Notice of Grant of Restricted Stock Units (Inducement Award)
10-Q 11/9/2022 10.12
10.39 *
Form of Notice of Grant of Performance-Based Restricted Stock Units (Inducement Award)
10-Q 11/9/2022 10.13
10. 40 *
Amended and Restated Non-Employee Director Compensation Policy
10-Q 8/8/2024 10.1
1 0.41
F orm of Amendment to Retention Agreement
8-K
11/7/2024 10.1
1 9.1
I nsider Trading Policy
X
21.1
List of subsidiaries and affiliates
X
23.1
Consent of Deloitte & Touche LLP, Independent Registered Public Accounting Firm
X
23.2
Consent of PricewaterhouseCoopers LLP, Independent Registered Public Accounting Firm
X
24.1
Power of Attorney (included on the Signatures page)
X
31.1
Rule 13a-14(a)/15d-14(a) Certification of Principal Executive Officer
X
31.2
Rule 13a-14(a)/15d-14(a) Certification of Principal Financial Officer
X
32.1
Section 1350 Certification of Principal Executive Officer
X
32.2
Section 1350 Certification of Principal Financial Officer
X
97 †
Arlo Technologies, Inc. Clawback Policy
10-K 2/29/2024 97
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 X
101.SCH Inline XBRL Taxonomy Extension Schema Document X
101.CAL Inline XBRL Taxonomy Extension Calculation Linkbase Document X
101.DEF Inline XBRL Taxonomy Extension Definition Linkbase Document X
101.LAB Inline XBRL Taxonomy Extension Label Linkbase Document X
101.PRE Inline XBRL Taxonomy Extension Presentation Linkbase Document X
104 104 Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101) X
* Indicates management contract or compensatory plan or arrangement.
† Pursuant to Item 601(b)(10) of Regulation S-K, certain portions of this exhibit have been omitted by means of marking such portions with asterisks because the Registrant has determined that the information is both not material and is the type that the Registrant treats as private or confidential.
Item 16. Form 10-K Summary
None.
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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.
ARLO TECHNOLOGIES, INC.
Registrant
/s/ MATTHEW MCRAE
Matthew McRae
Chief Executive Officer
(Principal Executive Officer)
/s/ KURTIS BINDER
Kurtis Binder
Chief Financial Officer and Chief Operating Officer
(Principal Financial and Accounting Officer)
Date: February 27, 2025
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POWER OF ATTORNEY
KNOW ALL PERSONS BY THESE PRESENTS, that each person whose signature appears below constitutes and appoints Matthew McRae and Kurtis Binder, and each of them, his or her attorneys-in-fact, each with the power of substitution, for him or her in any and all capacities, to sign any and all amendments to this Annual Report on Form 10-K and to file the same, with exhibits thereto and other documents in connection therewith, with the Securities and Exchange Commission, hereby ratifying and confirming all that each of said attorneys-in-fact, or his substitute or substitutes, may do or cause to be done by virtue hereof.
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 and in the capacities and on the dates indicated:
Signature Title Date
/s/ MATTHEW MCRAE Chief Executive Officer February 27, 2025
Matthew McRae (Principal Executive Officer)
/s/ KURTIS BINDER Chief Financial Officer and Chief Operating Officer February 27, 2025
Kurtis Binder (Principal Financial and Accounting Officer)
/s/ PRASHANT AGGARWAL Director February 27, 2025
Prashant Aggarwal
/s/ JOCELYN E. CARTER-MILLER Director February 27, 2025
Jocelyn E. Carter-Miller
/s/ RALPH E. FAISON Director February 27, 2025
Ralph E. Faison
/s/ CATRIONA FALLON Director February 27, 2025
Catriona Fallon
/s/ AMY ROTHSTEIN Director February 27, 2025
Amy Rothstein
/s/ GRADY K. SUMMERS Director February 27, 2025
Grady K. Summers
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