What changed in this filing

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Item 9A. Controls and Procedures

2020-11-18 compared with 2019-12-17 · 32 added, 45 removed, 129 unchanged (37% of the section changed)

3 unchanged sentences

Disclosure controls and procedures are designed to ensure that information required to be disclosed by us in the reports we file or submit under the Exchange Act is recorded, processed, 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 the chief executive officer and chief financial officer, as appropriate, to allow timely decisions regarding required disclosure.

Based upon this evaluation, our chief executive officer and our chief financial officer concluded that because of the material weaknesses identified in our internal control over financial reporting discussed below, our disclosure controls and procedures were not effective as of September 30, 2019, the end of the period covered by this annual report.

Based upon this evaluation, our chief executive officer and our chief financial officer concluded that our disclosure controls and procedures were effective as of September 30, 2020, the end of the period covered by this annual report.

Management’s Report on Internal Control Over Financial Reporting

8 unchanged sentences

In making this assessment, we used the criteria set forth in Internal Control - Integrated Framework (2013) issued by the Committee of Sponsoring Organizations (COSO) of the Treadway Commission.

Based on our assessment, our management concluded that, as of September 30, 2019, our internal control over financial reporting was not effective because of the material weaknesses discussed below.

Based on this evaluation, management concluded that the Company's internal control over financial reporting was effective as of September 30, 2020.

The effectiveness of our internal control over financial reporting as of September 30, 2020 has been audited by PricewaterhouseCoopers LLP, an independent registered public accounting firm, as stated in their report which appears in Item 8.

Financial Statements and Supplementary Data.

Previously Identified Material Weakness in Internal Control Over Financial Reporting

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 our annual or interim financial statements will not be prevented or detected on a timely basis.

We did not maintain effective controls related to the accuracy of revenue recorded at a business unit within our Brooks Life Sciences segment.

Specifically, we did not maintain effective controls to verify the accuracy of the price

and quantity data for customer transactions entered into the business unit’s billing system, and to verify that the invoices generated from the billing system were based on the appropriate amounts.

These control deficiencies resulted in immaterial adjustments to revenue and related accounts and disclosures in the interim and annual consolidated financial statements for the years ended September 30, 2019, 2018, and 2017, which were corrected as an immaterial out of period adjustment in the fourth quarter of 2019.

Additionally, these control deficiencies could have resulted in misstatements of the revenue and accounts receivable account balances at this individual business unit that would have resulted in a material misstatement to the annual or interim consolidated financial statements that would not be prevented or detected.

Accordingly, our management has determined that these control deficiencies constitute a material weakness.

We also did not design and maintain effective controls related to the occurrence and cutoff of revenue on products shipped to customers from contract manufacturers for a business unit within our Brooks Semiconductor Solutions Group segment.

Specifically, we did not design and maintain effective controls to verify that revenue from product shipments from contract manufacturers in this business unit were evaluated for proper revenue recognition at the point of transfer of control.

Management determined that this control deficiency resulted in an audit adjustment related to the revenue, cost of sales and the corresponding balance sheet accounts of our consolidated financial statements for the fiscal year ended September 30, 2019.

Additionally, this control deficiency could have resulted in misstatements of the aforementioned accounts and disclosures at this individual business unit that would have resulted in a material misstatement to the annual or interim consolidated financial statements that would not be prevented or detected.

Accordingly, our management has determined that this control deficiency constitutes a material weakness.

We excluded GENEWIZ Group from our assessment of internal control over financial reporting as of September 30, 2019 because it was acquired by the Company in a purchase business combination during fiscal year 2019.

The total assets and total revenues of GENEWIZ Group, represent 9% and 16%, respectively, of the related consolidated financial statement amounts as of and for the year ended September 30, 2019.

Our independent registered public accounting firm, PricewaterhouseCoopers LLP, has expressed an adverse opinion on the effectiveness of our internal control over financial reporting.

PricewaterhouseCoopers LLP’s report appears in Item 8, “Financial Statements and Supplementary Date” above.

We previously disclosed in our 2019 Annual Report on Form 10-K, the following control deficiency, that constitutes a material weakness in our internal control over financial reporting:

● We did not maintain effective controls related to the accuracy of revenue recorded at a business unit within our Brooks Life Sciences Services segment.

Specifically, we did not maintain effective controls to verify the accuracy of the price and quantity data for customer transactions entered into the business unit’s billing system, and to verify that the invoices generated from the billing system were based on the appropriate amounts.

These control deficiencies resulted in immaterial misstatements and subsequent immaterial adjustments to revenue and related accounts and disclosures in the interim and annual consolidated financial statements for the years ended September 30, 2019, 2018 and 2017.

Remediation of Prior Material Weakness

During the quarter ended December 31, 2019, we implemented a new billing system and enterprise resource planning system (ERP) for the business unit within our Brooks Life Sciences with the reported material weakness.

In connection with the implementation, during the quarter ended March 31, 2020, we designed and implemented new and enhanced controls to verify the accuracy of price and quantity data for the business unit's customer transactions and verify that invoices generated from the business unit's billing system are based on appropriate amounts.

We also enhanced our documentation related to the business unit's billing systems, procedures, and controls, which will support its ability to train employees and execute the controls effectively.

Based on the actions taken, as well as the testing and evaluation of the design and operating effectiveness of the controls, we concluded that the material weakness related to the accuracy of price and quantity data for the business unit's customer transactions, and the verification that invoices generated from the business unit's billing system are based on appropriate amounts, was remediated as of September 30, 2020.

Changes in Internal Control Over Financial Reporting

There were no changes in internal control over financial reporting during the fiscal fourth quarter ended September 30, 2019, that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

Remediation Plan

We are committed and are taking steps necessary to remediate the control deficiencies that constituted the material weaknesses described above by implementing changes to our internal control over financial reporting.

Management has been implementing and continues to implement measures to ensure that the control deficiencies contributing to the material weaknesses are remediated, such that these controls are implemented and operating effectively.

The remediation actions in the Brooks Life Sciences segment are expected to include:

(i) implementing a new billing system and enterprise resource planning system (ERP) which will reduce the complexity of this billing process, (ii) improving the oversight of the accuracy of invoice processing and (iii) improving process documentation and training related to the billing and oversight process.

The remediation actions in the Brooks Semiconductor Solutions Group are expected to include (i) enhanced documentation of inventory cut-off procedures related to contract manufacturing sites (ii) additional employee training and (iii) additional cut-off review procedures for transactions occurring near the end of a reporting period.

There were no changes in internal control over financial reporting (as defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act) during the fiscal fourth quarter ended September 30, 2020, that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

Other Information

13 unchanged sentences

● Consolidated Financial Statements of the Company and the related notes are included under Part II, Item 8, “Financial Statements and Supplementary Data” of this Form 10-K.

● Consolidated Financial Statements of ULVAC Cryogenics, Inc.

as of June 30, 2019 and 2018 and for each of the periods ended June 30, 2019, 2018 and 2017 and the related notes are filed as Exhibit 99.2 hereto and incorporated herein by reference in this Form 10-K pursuant to Rule 3-09 of Regulation S-X.

● Other financial statement schedules are omitted because of the absence of conditions under which they are required or because the required information is given in the supplementary Consolidated Financial Statements or notes thereto.

14 unchanged sentences

333-88320), filed on May 15, 2002).

Description of Securities.

Description of Securities (incorporated herein by reference to Exhibit 4.02 of the Company’s Annual Report on Form 10-K, filed on December 17, 2019).

Form of Indemnification Agreement for directors and officers of the Company (incorporated herein by reference to Exhibit 10.02 of the Company’s Annual Report on Form 10-K, filed on November 17, 2017).

2 unchanged sentences

Offer letter, dated September 5, 2013, between the Company and Lindon G.

Robertson (incorporated herein by reference to Exhibit 10.03 of the Company’s Annual Report on Form 10-K, filed on December 17, 2019).

Letter Agreement, dated June 4, 2015, between the Company and Lindon G.

4 unchanged sentences

Separation Agreement, dated September 6, 2019, as amended, between the Company and Maurice H.

Tenney, III (incorporated herein by reference to Exhibit 10.07 of the Company’s Annual Report on Form 10-K, filed on December 17, 2019).

Offer Letter, dated June 12, 2014 between the Company and David C.

2 unchanged sentences

Jarzynka (incorporated herein by reference to Exhibit 10.1 to the Company’s Quarterly Report on Form 10-Q for the quarter ended June 30, 2017, filed on August 4, 2017).

Offer Letter dated September 12, 2018, between the Company and Amy Liao

Offer Letter dated September 12, 2018, between the Company and Amy Liao (incorporated herein by reference to Exhibit 10.10 of the Company’s Annual Report on Form 10-K, filed on December 17, 2019).

Form of Non-Competition Agreement (incorporated herein by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K, filed on June 9, 2015).

23 unchanged sentences

Consent of PricewaterhouseCoopers LLP

Consent of PricewaterhouseCoopers Aarata LLC

Certification of the Company’s Principal Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

1 unchanged sentence

Certification of the Company’s Principal Executive Officer and Principal Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

Report of Independent Auditors of ULVAC Cryogenics, Inc.

Consolidated Financial Statements of ULVAC Cryogenics, Inc.

as of June 30, 2019 and 2018 and for each of the periods ended June 30, 2019, 2018 and 2017.

The following material from the Company’s Annual Report on Form 10-K, for the year ended September 30, 2020, formatted in iXBRL (Inline eXtensible Business Reporting Language):

17 unchanged sentences

President and Chief Executive Officer

December 17, 2019

November 18, 2020

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.

2 unchanged sentences

(Principal Executive Officer)

December 17, 2019

November 18, 2020

/S/ LINDON G.

2 unchanged sentences

(Principal Financial Officer)

December 17, 2019

November 18, 2020

/S/ DAVID PIETRANTONI

2 unchanged sentences

(Principal Accounting Officer)

December 17, 2019

November 18, 2020

David Pietrantoni

CLINTON ALLEN

December 17, 2019

November 18, 2020

Clinton Allen

December 17, 2019

November 18, 2020

/S/ JOSEPH R.

December 17, 2019

November 18, 2020

/S/ KRISHNA G.

December 17, 2019

November 18, 2020

/S/ MICHAEL ROSENBLATT

December 17, 2019

November 18, 2020

Michael Rosenblatt

/S/ ALFRED WOOLLACOTT III

December 17, 2019

November 18, 2020

Alfred Woollacott III

December 17, 2019

November 18, 2020

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