Item 9A. Controls and Procedures
Item 9A. Controls and Procedures
Evaluation of Disclosure Controls and Procedures
Management is responsible for establishing and maintaining effective disclosure controls and procedures as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act, to provide reasonable assurance that the information required to be disclosed in reports that the Company files or submits under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms, and is accumulated and communicated to management, including the Company’s principal executive officer and principal financial officer, as appropriate to allow timely decisions regarding required disclosures. As of June 28, 2024, an evaluation was performed, under the supervision and with the participation of management, including our Chief Executive Officer (“CEO”) and Chief Financial Officer (“CFO”), of the effectiveness of the design and operation of our disclosure controls and procedures. Based on that evaluation, the Company’s CEO and CFO concluded that as of June 28, 2024, our disclosure controls and procedures were not effective due to the material weaknesses in internal control over financial reporting described below.
Notwithstanding the material weaknesses described, management concluded the consolidated financial statements included in this Annual Report on Form 10-K present fairly, in all material respects, our financial condition, results of operations and cash flows in accordance with U.S. GAAP.
Management Report on Internal Control Over Financial Reporting
The Company’s 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) to provide reasonable assurance regarding the reliability of the Company’s financial reporting and the preparation of consolidated financial statements for external purposes in accordance with U.S. GAAP.
Management, including the Company’s CEO and CFO, assessed the effectiveness of its internal control over financial reporting as of June 28, 2024. Management based its assessment on criteria established in Internal Control-Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (2013 COSO framework).
The Company completed the NEC Transaction in November 2023 (as defined above), and management has excluded the acquired business’s internal control over financial reporting from its assessment of the effectiveness of internal controls as of the fiscal year ended June 28, 2024. The acquired business represents approximately 14% of consolidated total revenues for the fiscal year ended June 28, 2024.
Based on its assessment, management concluded that the Company’s internal control over financial reporting was not effective as of June 28, 2024 due to the material weaknesses detailed below.
A material weakness is a deficiency, or a combination of deficiencies, in internal control over financial reporting, such that a reasonable possibility exists that a material misstatement of the Company’s annual or interim financial statements would not be prevented or detected on a timely basis.
Management determined that the Company had the following material weaknesses in its internal control over financial reporting as of June 28, 2024:
Ineffective control environment : the Company did not maintain an effective control environment based on the criteria established in the COSO framework. The Company did not have sufficient personnel with the appropriate levels of knowledge, experience, and training in accounting and internal control over financial reporting. The material weakness in the control environment led to the additional material weaknesses detailed below.
Ineffective control activities : the Company did not maintain effective control activities based on the criteria established in the COSO framework. Control activities were either not designed effectively or not performed in a timely manner to support the operating effectiveness of the controls to prevent and detect potential material errors. As a result, the following control deficiencies constitute a material weakness individually and in the aggregate: (a) management identified instances of ineffective controls over the review of certain (i) revenue transactions, (ii) reconciliations of revenue related account balances, and (iii) reconciliations covering the data transfer of revenue transactions between its financial systems; (b) management identified instances of ineffective controls related to the determination of the appropriate period for revenue recognition; (c) management identified instances of ineffective controls related to certain arrangements where revenue is recognized over time and (d) management identified instances of ineffective controls related to the review and approval of journal entries.
91
Ineffective monitoring activities : the Company did not maintain effective monitoring activities based on the criteria established in the COSO framework to determine whether the components of internal control over financial reporting were present and functioning. Monitoring activities were not in place to timely identify and initiate the transition of certain control activities or identify control activities that were not effectively designed.
Remediation Plan
During the fourth quarter of fiscal 2024 we initiated and will continue to implement measures designed to improve our internal control over financial reporting to remediate these material weaknesses with oversight from the Audit Committee of the Board of Directors, including the following:
• We hired and will continue to hire qualified accounting and internal control professionals with the appropriate level of experience and training to design, implement, execute, and monitor our system of internal control. During the fourth quarter of fiscal year 2024 we hired a new Chief Financial Officer, Head of Internal Audit, and backfilled vacancies resulting from key finance and accounting personnel turnover.
• We will provide training to the applicable control performers related to the importance of timely execution of control activities for which they are responsible.
• We will redesign controls over the determination of the appropriate period for revenue recognition, controls over arrangements where revenue is recognized over time and controls related to the review and approval of journal entries.
• We are implementing a formal monitoring program to perform the necessary evaluations to ascertain whether the components of internal control are present and functioning, including implementing corrective actions as necessary.
We are committed to maintaining a strong control environment and believe that these remediation efforts represent continued improvement in our control environment. We also expect, with oversight from the Audit Committee of the Board of Directors, to continue to review, optimize and enhance our financial reporting controls and procedures. The material weaknesses will not be considered remediated until the associated controls operate effectively for a sufficient period of time and management concludes, through testing, that the controls are operating effectively.
The effectiveness of internal control over financial reporting as of June 28, 2024 has been audited by the Company’s independent registered public accounting firm, as stated in their attestation report included herein.
Changes in Internal Controls Over Financial Reporting
The Company is in the process of implementing internal control procedures related to the acquired business and expects this to be completed during fiscal 2025.
Except as noted in the foregoing sentence and as set forth above in connection with our material weaknesses, there were no other changes to internal controls over financial reporting as defined in Rules 13a-15(f) or 15d-15(f) that occurred during the Company’s fourth fiscal quarter ended June 28, 2024 that has materially affected, or is reasonably likely to materially affect, the Company’s internal control over financial reporting.
Inherent Limitations on Effectiveness of Controls
The Company’s management, including its CEO and CFO, does not expect that its disclosure controls and procedures or its internal control over financial reporting will prevent or detect all errors and all fraud. A control system, no matter how well-designed and operated, can provide only reasonable, not absolute, assurance that the control system’s objectives will be met. The design of a control system must reflect the fact that there are resource constraints, and the benefits of controls must be considered relative to their costs. Further, because of the inherent limitations in all control systems, 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, have been detected. The design of any system of controls is based in part on certain assumptions about the likelihood of future events, and there can be no assurance that any design will succeed in achieving its stated goals under all potential future conditions. Projections of any evaluation of the effectiveness of controls to future periods are subject to risks. Over time, controls may become inadequate because of changes in conditions or deterioration in the degree of compliance with policies or procedures.
92
Report of Independent Registered Public Accounting Firm
To the shareholders and the Board of Directors of Aviat Networks, Inc.
Opinion on Internal Control over Financial Reporting
We have audited the internal control over financial reporting of Aviat Networks, Inc. and subsidiaries (the “Company”) as of June 28, 2024, 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, because of the effect of the material weaknesses identified below on the achievement of objectives of the control criteria, the Company has not maintained effective internal control over financial reporting as of June 28, 2024, 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 fiscal year ended June 28, 2024, of the Company and our report dated October 4, 2024, 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 of the NEC wireless transport business, which was acquired on November 30, 2023, and whose financial statements constitute approximately 14% of total revenue of the consolidated financial statements for the fiscal year ended June 28, 2024. Accordingly, our audit did not include the internal control over financial reporting for the NEC wireless transport business.
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 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.
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.
93
Material Weaknesses
A material weakness is a deficiency, or a combination of deficiencies, in internal control over financial reporting, such that there is a reasonable possibility that a material misstatement of the company’s annual or interim financial statements will not be prevented or detected on a timely basis. The following material weaknesses have been identified and included in management’s assessment:
The Company did not maintain an effective control environment based on the criteria established in the COSO framework. The Company did not have sufficient personnel with the appropriate levels of knowledge, experience, and training in accounting and internal control over financial reporting.
The material weakness in the control environment led to the additional material weaknesses detailed below.
The Company did not maintain effective control activities based on the criteria established in the COSO framework. Control activities were either not designed effectively or not performed in a timely manner to support the operating effectiveness of the controls to prevent and detect potential material errors. As a result, the following control deficiencies constitute a material weakness individually and in the aggregate: (a) the Company identified instances of ineffective controls over the review of certain (i) revenue transactions, (ii) reconciliations of revenue related account balances, and (iii) reconciliations covering the data transfer of revenue transactions between its financial systems; and (b) The Company identified instances of ineffective controls related to the determination of the appropriate period for revenue recognition; (c) the Company identified instances of ineffective controls related to certain arrangements where revenue is recognized over time and (d) management identified instances of ineffective controls related to the review and approval of journal entries.
The Company did not maintain effective monitoring activities based on the criteria established in the COSO framework to determine whether the components of internal control over financial reporting were present and functioning. Monitoring activities were not in place to timely identify and initiate the transition of certain control activities or identify control activities that were not effectively designed.
These material weaknesses were considered in determining the nature, timing, and extent of audit tests applied in our audit of the consolidated financial statements as of and for the fiscal year ended June 28, 2024, of the Company, and this report does not affect our report on such financial statements.
/s/ Deloitte & Touche LLP
Austin, Texas
October 4, 2024
94
Item 9B. Other Information
During the three months ended June 28, 2024, none of the Company’s Directors or Officers adopted , modified or terminated a “Rule 10b5-1 trading arrangement” or a “non-Rule 10b5-1 trading arrangement,” as defined in Item 408 of Regulation S-K.
As discussed in Note 16. Revisions to Prior Period Consolidated Financial Statements, subsequent to the third quarter of fiscal 2024, the Company identified errors in the quarterly financial statements for fiscal 2024 related to estimated total contract costs and progress to completion for an over-time arrangement. The Company has identified additional errors impacting the quarterly financial statements for fiscal 2024 related to the recognition of revenue prior to performance obligations being met and related to journal entries recorded in error. In accordance with ASC 250, Accounting Changes and Error Corrections and Staff Accounting Bulletins (“SAB”) No. 99, Materiality and No. 108, Considering the Effects of Prior Year Misstatements when Quantifying Misstatements in Current Year Financial Statements, the Company evaluated the materiality of the errors and determined that the impacts were not material, individually or in the aggregate, to the Company’s previously issued consolidated financial statements. The effect of the errors resulted in the following impacts to the quarterly financial statements for fiscal 2024:
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (unaudited)
Three Months Ended March 29, 2024
Nine Months Ended March 29, 2024
(In thousands, except per share amounts) As Previously Reported
Adjustments
As Revised
As Previously Reported
Adjustments
As Revised
Revenues:
Product sales $ 70,857 $ (13) $ 70,844 $ 196,794 $ (1,384) $ 195,410
Services 40,756 (778) 39,978 97,421 (1,408) 96,013
Total revenues 111,613 (791) 110,822 294,215 (2,792) 291,423
Cost of revenues:
Product sales 47,791 (8) 47,783 121,775 (786) 120,989
Services 27,288 (320) 26,968 67,224 (383) 66,841
Total cost of revenues 75,079 (328) 74,751 188,999 (1,169) 187,830
Gross margin 36,534 (463) 36,071 105,216 (1,623) 103,593
Selling and administrative 21,300 (1,102) 20,198 61,979 — 61,979
Operating income 5,028 639 5,667 15,569 (1,623) 13,946
Income before income taxes 4,037 639 4,676 13,920 (1,623) 12,297
Provision for income taxes 619 187 806 3,607 (521) 3,086
Net income $ 3,418 $ 452 $ 3,870 $ 10,313 $ (1,102) $ 9,211
Net income per share of common stock outstanding:
Basic $ 0.27 $ 0.04 $ 0.31 $ 0.86 $ (0.10) $ 0.76
Diluted $ 0.27 $ 0.03 $ 0.30 $ 0.84 $ (0.09) $ 0.75
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (unaudited)
Three Months Ended March 29, 2024
Nine Months Ended March 29, 2024
(In thousands) As Previously Reported
Adjustments
As Revised
As Previously Reported
Adjustments
As Revised
Net income $ 3,418 $ 452 $ 3,870 $ 10,313 $ (1,102) $ 9,211
Comprehensive income $ 3,077 $ 452 $ 3,529 $ 10,550 $ (1,102) $ 9,448
95
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (unaudited)
Nine Months Ended March 29, 2024
(In thousands) As Previously Reported
Adjustments
As Revised
Operating Activities
Net income $ 10,313 $ (1,102) $ 9,211
Deferred taxes 2,180 (521) 1,659
Accounts receivable 14,312 1,103 15,415
Unbilled receivables (17,039) 1,689 (15,350)
Inventories 7,037 (1,061) 5,976
Accrued expenses 11,449 (108) 11,341
Net cash provided by operating activities $ 22,229 $ — $ 22,229
CONDENSED CONSOLIDATED STATEMENTS OF EQUITY (unaudited)
Three Months Ended March 29, 2024
Accumulated Deficit Total Equity
(In thousands)
As Previously Reported
Balance as of December 29, 2023
$ (581,019) $ 253,936
Net income 3,418 3,418
Balance as of March 29, 2024
$ (577,601) $ 258,507
Adjustments
Balance as of December 29, 2023
$ (2,913) $ (2,913)
Net income 452 452
Balance as of March 29, 2024
$ (2,461) $ (2,461)
As Revised
Balance as of December 29, 2023
$ (583,932) $ 251,023
Net income 3,870 3,870
Balance as of March 29, 2024
$ (580,062) $ 256,046
96
Nine Months Ended March 29, 2024
Accumulated Deficit Total Equity
(In thousands)
As Previously Reported
Balance as of June 30, 2023
$ (587,914) $ 220,098
Net income 10,313 10,313
Balance as of March 29, 2024
$ (577,601) $ 258,507
Adjustments
Balance as of June 30, 2023
$ (1,359) $ (1,359)
Net income (1,102) (1,102)
Balance as of March 29, 2024
$ (2,461) $ (2,461)
As Revised
Balance as of June 30, 2023
$ (589,273) $ 218,739
Net income 9,211 9,211
Balance as of March 29, 2024
$ (580,062) $ 256,046
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (unaudited)
Three Months Ended December 29, 2023
Six Months Ended December 29, 2023
(In thousands, except per share amounts) As Previously Reported
Adjustments
As Revised
As Previously Reported
Adjustments
As Revised
Revenues:
Product sales $ 66,392 $ (1,371) $ 65,021 $ 125,937 $ (1,371) $ 124,566
Services 28,644 27 28,671 56,665 (630) 56,035
Total revenues 95,036 (1,344) 93,692 182,602 (2,001) 180,601
Cost of revenues:
Product sales 37,671 (778) 36,893 73,984 (778) 73,206
Services 20,535 (63) 20,472 39,936 (63) 39,873
Total cost of revenues 58,206 (841) 57,365 113,920 (841) 113,079
Gross margin 36,830 (503) 36,327 68,682 (1,160) 67,522
Selling and administrative 21,442 1,102 22,544 40,679 1,102 41,781
Operating income 4,994 (1,605) 3,389 10,541 (2,262) 8,279
Income before income taxes 5,237 (1,605) 3,632 9,883 (2,262) 7,621
Provision for income taxes 2,347 (499) 1,848 2,988 (708) 2,280
Net income $ 2,890 $ (1,106) $ 1,784 $ 6,895 $ (1,554) $ 5,341
Net income per share of common stock outstanding:
Basic $ 0.24 $ (0.09) $ 0.15 $ 0.59 $ (0.14) $ 0.45
Diluted $ 0.24 $ (0.09) $ 0.15 $ 0.57 $ (0.13) $ 0.44
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CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (unaudited)
Three Months Ended December 29, 2023
Six Months Ended December 29, 2023
(In thousands) As Previously Reported
Adjustments
As Revised
As Previously Reported
Adjustments
As Revised
Net income $ 2,890 $ (1,106) $ 1,784 $ 6,895 $ (1,554) $ 5,341
Comprehensive income $ 3,435 $ (1,106) $ 2,329 $ 7,473 $ (1,554) $ 5,919
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (unaudited)
Six Months Ended December 29, 2023
(In thousands) As Previously Reported
Adjustments
As Revised
Operating Activities
Net income $ 6,895 $ (1,554) $ 5,341
Deferred taxes 605 (708) (103)
Accounts receivable 3,063 631 3,694
Unbilled receivables (18,772) 1,370 (17,402)
Inventories 852 (848) 4
Accrued expenses 5,171 7 5,178
Other assets and liabilities (3,907) 1,102 (2,805)
Net cash provided by operating activities $ 6,909 $ — $ 6,909
CONDENSED CONSOLIDATED STATEMENTS OF EQUITY (unaudited)
Three Months Ended December 29, 2023
Accumulated Deficit Total Equity
(In thousands)
As Previously Reported
Balance as of September 29, 2023
$ (583,909) $ 226,150
Net income 2,890 2,890
Balance as of December 29, 2023
$ (581,019) $ 253,936
Adjustments
Balance as of September 29, 2023
$ (1,807) $ (1,807)
Net income (1,106) (1,106)
Balance as of December 29, 2023
$ (2,913) $ (2,913)
As Revised
Balance as of September 29, 2023
$ (585,716) $ 224,343
Net income 1,784 1,784
Balance as of December 29, 2023
$ (583,932) $ 251,023
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Six Months Ended December 29, 2023
Accumulated Deficit Total Equity
(In thousands)
As Previously Reported
Balance as of June 30, 2023
$ (587,914) $ 220,098
Net income 6,895 6,895
Balance as of December 29, 2023
$ (581,019) $ 253,936
Adjustments
Balance as of June 30, 2023
$ (1,359) $ (1,359)
Net income (1,554) (1,554)
Balance as of December 29, 2023
$ (2,913) $ (2,913)
As Revised
Balance as of June 30, 2023
$ (589,273) $ 218,739
Net income 5,341 5,341
Balance as of December 29, 2023
$ (583,932) $ 251,023
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (unaudited)
Three Months Ended September 29, 2023
(In thousands, except per share amounts) As Previously Reported
Adjustments
As Revised
Revenues:
Services $ 28,021 $ (657) $ 27,364
Total revenues 87,566 (657) 86,909
Gross margin 31,852 (657) 31,195
Operating income 5,547 (657) 4,890
Income before income taxes 4,646 (657) 3,989
Provision for income taxes 641 (209) 432
Net income $ 4,005 $ (448) $ 3,557
Net income per share of common stock outstanding:
Basic $ 0.35 $ (0.04) $ 0.31
Diluted $ 0.34 $ (0.04) $ 0.30
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (unaudited)
Three Months Ended September 29, 2023
(In thousands) As Previously Reported
Adjustments
As Revised
Net income $ 4,005 $ (448) $ 3,557
Comprehensive income $ 4,038 $ (448) $ 3,590
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CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (unaudited)
Three Months Ended September 29, 2023
(In thousands) As Previously Reported
Adjustments
As Revised
Operating Activities
Net income $ 4,005 $ (448) $ 3,557
Deferred taxes 39 (209) (170)
Unbilled receivables (2,395) 657 (1,738)
Net cash provided by operating activities 13,980 — 13,980
CONDENSED CONSOLIDATED STATEMENTS OF EQUITY (unaudited)
Three Months Ended September 29, 2023
Accumulated Deficit Total Equity
(In thousands)
As Previously Reported
Balance as of June 30, 2023
$ (587,914) $ 220,098
Net income 4,005 4,005
Balance as of September 29, 2023
$ (583,909) $ 226,150
Adjustments
Balance as of June 30, 2023
$ (1,359) $ (1,359)
Net income (448) (448)
Balance as of September 29, 2023
$ (1,807) $ (1,807)
As Revised
Balance as of June 30, 2023
$ (589,273) $ 218,739
Net income 3,557 3,557
Balance as of September 29, 2023
$ (585,716) $ 224,343
Item 9C. Disclosure Regarding Foreign Jurisdictions that Prevent Inspections
Not applicable.
100
PART III
Certain information required by Part III is omitted from this Annual Report on Form 10-K because the Company will file a definitive Proxy Statement with the SEC within 120 days after the end of its fiscal year ended June 28, 2024.
Item 10. Directors, Executive Officers and Corporate Governance
The Company adopted a Code of Conduct that is available at www.aviatnetworks.com. The Company’s Code of Conduct was most recently amended and restated in November 2022. If, in the future, the Company amends its Code of Conduct or grants waivers from its Code of Conduct with respect to any of its executive officers or directors, the Company will make information regarding such amendments or waivers available on its website for a period of at least 12 months.
For information with respect to Executive Officers, see Part I, Item 1 of this Annual Report on Form 10-K, under “Information about our Executive Officers,” which is incorporated herein by reference.
All information required to be disclosed in this Item 10 that is not otherwise contained herein will appear in the Company’s definitive Proxy Statement and is incorporated herein by reference.
Item 11. Executive Compensation
Information regarding the Company’s executive and director compensation will appear in its definitive Proxy Statement and is incorporated herein by reference.
Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters
Information regarding security ownership of certain beneficial owners and management and related stockholder matters will appear in the Company’s definitive Proxy Statement and is incorporated herein by reference.
Item 13. Certain Relationships and Related Transactions, and Director Independence
Information regarding certain relationships and related transactions, and director independence will appear in the Company’s definitive Proxy Statement and is incorporated herein by reference.
Item 14. Principal Accountant Fees and Services
Information regarding principal accountant fees and services will appear in the Company’s definitive Proxy Statement and is incorporated herein by reference.
101
PART IV
Item 15. Exhibits and Financial Statement Schedules
(a) The following documents are filed as part of this report:
Financial Statements and Schedules
The financial statements of Aviat Networks, Inc. are set forth in Item 8 of this Annual Report on Form 10-K. The financial statement schedules have been omitted because the required information is not required, not applicable or because the information is included elsewhere in the consolidated financial statements or notes thereto.
(b) Exhibits:
The information required by this Item is set forth on the Exhibit Index (following the Signatures section of this report) and is included, or incorporated by reference, in this Annual Report on Form 10-K.
Item 16. Form 10–K Summary
None.
102
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.
AVIAT NETWORKS, INC.
(Registrant)
Date: October 4, 2024 By: /s/ Michael Connaway
Michael Connaway
Senior Vice President and Chief Financial Officer
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/ Peter A. Smith President and Chief Executive Officer
(Principal Executive Officer) October 4, 2024
Peter A. Smith
/s/ Michael Connaway Senior Vice President and Chief Financial Officer
(Principal Financial Officer and Principal Accounting Officer) October 4, 2024
Michael Connaway
/s/ John Mutch Chair of the Board
October 4, 2024
John Mutch
/s/ Laxmi Akkaraju
Director October 4, 2024
Laxmi Akkaraju
/s/ Bryan Ingram
Director October 4, 2024
Bryan Ingram
/s/ Michele Klein Director October 4, 2024
Michele Klein
/s/ Bruce Taten Director October 4, 2024
Bruce Taten
103
EXHIBIT INDEX
The following exhibits are filed or furnished herewith or are incorporated herein by reference to exhibits previously filed with the SEC:
Ex. # Description
2.1#¥ Master Sale of Business Agreement, dated May 9, 2023, by and among the Company and NEC (incorporated by reference to Exhibit 2.1 to the Current Report on Form 8-K filed May 9, 2023, File No. 001-33278).
2.2#¥ Amendment to the Master Sale of Business Agreement, dated November 30, 2023, by and between the Company and NEC (incorporated by reference to Exhibit 2.2 to the Current Report on Form 8-K filed December 1, 2023, File No. 001-33279).
3.1 Amended and Restated Certificate of Incorporation of Aviat Networks, Inc., as amended (incorporated by reference to Exhibit 3.1 to the Current Report on Form 8-K filed with the SEC on November 13, 2023, File No. 001-33278).
3.2 Amended and Restated Bylaws of Aviat Networks, Inc. (incorporated by reference to Exhibit 3.1 to the Current Report on Form 8-K filed with the SEC on August 24, 2023, File No. 001-33278).
4.1 Certificate of Designation of Rights, Preferences and Privileges of Series A Participating Preferred Stock (incorporated by reference to Exhibit 3.2 to the Current Report on Form 8-K filed with the SEC on September 7, 2016. File No. 001-33278) .
4.2 Specimen common stock certificate, adopted as of January 29, 2010 (incorporated by reference to Exhibit 4.1.1 to the Annual Report on Form 10-K for fiscal year end July 2, 2010 filed with the SEC on September 9, 2010, File No. 001-33278) .
4.3 Amended and Restated Tax Benefit Preservation Plan, dated as of August 27, 2020, by and between Aviat Networks, Inc. and Computershare Inc., as Rights Agent (incorporated by reference to Exhibit 4.1 to the Current Report on Form 8-K filed with the SEC on August 31, 2020, File No. 011-33278) .
4.4 Amendment No. 1 to the Amended and Restated Tax Benefit Preservation Plan, dated as of February 28, 2023, by and between Aviat Networks, Inc. and Computershare Inc., as Rights Agent (incorporated by reference to Exhibit 4.1 to the Current Report on Form 8-K filed with the SEC on February 28, 2023, File No. 001-33278) .
4.5
Description of Registered Securities (incorporated by reference to Exhibit 4.5 to the Annual Report on Form 10-K for fiscal year end June 30, 2023 filed with the SEC on August 30, 2023, File No. 001-33278) .
10.1#◊
Registration Rights and Lock-Up Agreement, dated November 30, 2023, by and between the Company and NEC (incorporated by reference to Exhibit 10.1 to the Current Report on Form 8-K filed with the SEC on December 1, 2023, File No. 001-33278).
10.2#◊
Manufacturing and Supply Agreement, dated November 30, 2023, by and among the Company, NECPF and NEC (incorporated by reference to Exhibit 10.2 to the Current Report on Form 8-K filed with the SEC on December 1, 2023, File No. 001-33278).
10.3#◊
Global Transition Services Agreement, dated November 30, 2023, by and between the Company and NEC (incorporated by reference to Exhibit 10.3 to the Current Report on Form 8-K filed with the SEC on December 1, 2023, File No. 001-33278).
10.4#◊
Global Seller Transition Services Agreement, dated November 30, 2023, by and between the Company and NEC (incorporated by reference to Exhibit 10.4 to the Current Report on Form 8-K filed with the SEC on December 1, 2023, File No. 001-33278).
10.5#◊
Distribution Agreement, dated November 30, 2023, by and between Aviat Singapore and NEC South Africa (incorporated by reference to Exhibit 10.5 to the Current Report on Form 8-K filed with the SEC on December 1, 2023, File No. 001-33278).
10.6#◊
Framework Agreement, dated November 30, 2023, by and between Aviat Singapore and NEC Saudi Arabia (incorporated by reference to Exhibit 10.6 to the Current Report on Form 8-K filed with the SEC on December 1, 2023, File No. 001-33278).
10.7#◊
Distribution Agreement, dated November 30, 2023, by and between Aviat Singapore and NEC New Zealand (incorporated by reference to exhibit 10.7 to the Current Report on Form 8-K filed with the SEC on December 1, 2023, File No. 001-33278).
10.8#◊
Distribution Agreement, dated November 30, 2023, by and between Aviat Singapore and NEC Malaysia (incorporated by reference to Exhibit 10.8 to the Current Report on Form 8-K filed with the SEC on December 1, 2023, File No. 001-33278).
104
Ex. # Description
10.9#◊
Trademark License Agreement, dated November 30, 2023, by and between the Company and NEC (incorporated by reference to Exhibit 10.9 to the Current Report on Form 8-K filed with the SEC on December 1, 2023, File No. 001-33278).
10.10#◊
Intellectual Property License Agreement, dated November 30, 2023, by and between the Company and NEC (incorporated by reference to Exhibit 10.10 to the Current Report on Form 8-K filed with the SEC on December 1, 2023, File No. 001-33278).
10.11#◊
Trademark Assignment Agreement, dated November 30, 2023, by and between the Company and NEC (incorporated by reference to Exhibit 10.11 to the Current Report on Form 8-K filed with the SEC on December 1, 2023, File No. 001-33278).
10.12#◊
Development Services Agreement, dated November 30, 2023, by and between Opco and NEC (incorporated by reference to Exhibit 10.12 to the Current Report on Form 8-K filed with the SEC on December 1, 2023, File No. 001-33278).
10.13#◊
Credit Agreement dated May 9, 2023, by and among the Company, the Opco, the Singapore Borrower and the Lenders (incorporated by reference to Exhibit 10.1 to the Current Report on Form 8-K filed with the SEC on May 9, 2023, File No. 001-33278).
10.14#◊
First Amendment to Credit Agreement, dated November 22, 2023, by and among the Borrowers and the Lender (incorporated by reference to Exhibit 10.1 to the Current Report on Form 8-K filed with the SEC on November 29, 2023, File No. 001-33278).
10.15
Intellectual Property Agreement between Harris Stratex Networks, Inc. and Harris Corporation dated January 26, 2007 (incorporated by reference to Exhibit 10.4 to the Current Report on Form 8-K filed with the SEC on February 1, 2007, File No. 001-33278) .
10.16
Tax Sharing Agreement between Harris Stratex Networks, Inc. and Harris Corporation dated January 26, 2007 (incorporated by reference to Exhibit 10.11 to the Current Report on Form 8-K filed with the SEC on February 1, 2007, File No. 001-33278) .
10.17+
Standard Form of Executive Employment Agreement between Harris Stratex Networks, Inc. and certain executives (incorporated by reference to Exhibit 10.16 to the Current Report on Form 8-K filed with the SEC on February 1, 2007, File No. 001-33278) .
10.18
Letter Agreement, dated as of January 11, 2015, among Aviat Networks, Inc., Steel Partners Holdings L.P., Lone Star Value Management, LLC and certain other parties (incorporated by reference to Exhibit 10.1 to the Current Report on Form 8-K filed with the SEC on January 12, 2015, File No. 001-33278) .
10.19
Lease Agreement, dated June 8, 2016, between Aviat Networks, Inc., through its wholly owned subsidiary Aviat U.S., Inc., and The Irvine Company LLC (incorporated by reference to Exhibit 10.34 to the Annual Report on Form 10-K for fiscal year end July 1, 2016 filed with the SEC on September 9, 2016, File No. 001-33278) .
10.20+
Employment Agreement, dated January 2, 2020, between Aviat Networks, Inc. and Peter Smith (incorporated by reference to Exhibit 10.1 to the Current Report on Form 8-K filed with the SEC on January 2, 2020, File No. 001-33278) .
10.20.1+
First Amendment to the Employment Agreement between Aviat Networks, Inc. and Peter Smith, dated May 17, 2021 (incorporated by reference to Exhibit 10.1 to the Current Report on Form 8-K filed with the SEC on May 18, 2021, File No. 001-33278) .
10.20.2+
Second Amendment to Employment Agreement, dated July 4, 2021, between the Company and Peter Smith (incorporated by reference to Exhibit 10.1 to the Current Report on Form 8-K filed with the SEC on July 7, 2021, File No. 001-33278) .
10.20.3*+
Employ ment Agreement, dated April 15, 2024 , between the Company and Peter Smith .
10.21+
Aviat Networks, Inc. Amended and Restated 2018 Incentive Plan (incorporated by reference to Appendix 1 to the Registrant’s Proxy Statement on Schedule 14A filed with the SEC on September 27, 2021, File No. 001-33278) .
10.22+
Employment Agreement, dated September 21, 2021 between the Company and David Gray (incorporated by reference to Exhibit 10.1 to the Current Report on Form 8-K filed with the SEC on October 18, 2021, File No. 001-33278) .
10.22.1*+
Employment Agreement, dated April 15, 2024, between the Company and David Gray .
10.22.2+
Amendment of Employment Agreement and Release Agreement, dated May 28, 2024 between the Company and David Gray (incorporated by reference to Exhibit 10.1 to the Current Report on Form 8-K filed with the SEC on May 28, 2024, File No. 001-33278) .
105
Ex. # Description
10.23
I ndependent Contractor Agreement dated May 28, 2024 between the C ompany and David Gray (incorporated by reference to Exhibit 10.2 to the Current Report on Form 8-K filed with the SEC on May 28, 2024 , File No. 001-33278) .
10.24+
Employment Agreement, dated July 1, 2012 between the Company and Bryan Tucker (incorporated by reference to Exhibit 10.12 to the Annual Report on Form 10-K for fiscal year end July 1, 2022 filed with the SEC on September 14, 2022, File No. 001-33278) .
10.24.1+
Letter Agreement amending Employment Agreement dated June 27, 2019, between the Company and Bryan Tucker (incorporated by reference to Exhibit 10.12.1 to the Annual Report on Form 10-K for fiscal year end July 1, 2022 filed with the SEC on September 14, 2022, File No. 001-33278) .
10.25
Independent Contractor Agreement dated October 3, 2023 between the Company and Bryan Tucker (incorporated by reference to Exhibit 10.2 to the Current Report on Form 8-K filed with the SEC on October 4, 2023 , File No. 001-33278).
10.26*+
Employment Agreement, dated April 15, 2024, between the Company and Erin Boase .
10.27*+
Employment Agreement, dated April 15, 2024, between the Company and Gary Croke .
10.28*+
Employment Agreement, dated May 28 , 2024, between the Company and Michael Connaway .
19.1*
I nsider Trading Compliance Program and Policy Statement, dated August 22, 2023 .
21* List of Subsidiaries of Aviat Networks, Inc.
23.1* Consent of Deloitte & Touche LLP
23.2* Consent of BDO USA, P. C .
31.1* Rule 13a-14(a)/15d-14(a) Certification of President and Chief Executive Officer
31.2* Rule 13a-14(a)/15d-14(a) Certification of Chief Financial Officer
32.1** Section 1350 Certification of Chief Executive Officer and Chief Financial Officer
97.1*
I ncentive-Based Compensation Recoupment Policy, dated August 21, 2023.
101.INS XBRL Instance Document
101.SCH XBRL Taxonomy Extension Schema Document
101.CAL XBRL Taxonomy Extension Calculation Linkbase Document
101.DEF XBRL Taxonomy Extension Definition Linkbase Document
101.LAB XBRL Taxonomy Extension Label Linkbase Document
101.PRE XBRL Taxonomy Extension Presentation Linkbase Document
______________________________
+ Management compensatory contract, arrangement or plan required to be filed as an exhibit pursuant to Item 15(b) of this report.
* Filed herewith.
** Furnished herewith.
# Certain schedules and exhibits to this agreement have been omitted in accordance with Item 601(a)(5) of Regulation S-K. A copy of any omitted schedule and/or exhibit will be furnished to the SEC on request.
¥ Certain portions of this exhibit were redacted pursuant to Item 601(b)(2)(ii) of Regulation S-K.
◊
Certain portions of this exhibit were redacted pursuant to Item 601(b)(10)(iv) of Regulation S-K.
106