Item 9A. Controls and Procedures
Item 9A. Controls and Procedures
Evaluation of disclosure controls and procedures
Our management, with the participation of our Chief Executive Officer and our Chief Financial Officer, have evaluated our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act) as of the end of the period covered by this Annual Report on Form 10-K . Based on that evaluation, our Chief Executive Officer and our Chief Financial Officer have concluded that, as of the end of the period covered by this Annual Report on Form 10-K , our disclosure controls and procedures are designed at a reasonable assurance level and are effective to provide reasonable assurance that information we are required to disclose in reports that we file or submit under the Exchange Act is recorded, processed, summarized, and reported within the time periods specified in SEC rules and forms, and that such information is accumulated and communicated to our management, including our Chief Executive Officer and Chief Financial Officer, as appropriate, to allow timely decisions regarding required disclosure.
Management’s Annual 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 Exchange Act Rules 13a-15(f) and 15d-15(f). Under the supervision and with the participation of our management, including our Chief Executive Officer and Chief Financial Officer, we conducted an evaluation of the effectiveness of our internal control over financial reporting as of December 31, 2022 based on the guidelines established in the Internal Control—Integrated Framework (2013 framework) issued by the Committee of Sponsoring Organizations of the Treadway Commission. Our internal control over financial reporting includes policies and procedures that provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external reporting purposes in accordance with GAAP. Based on the results of our evaluation, our management concluded that our internal control over financial reporting was effective as of December 31, 2022.
The effectiveness of our internal control over financial reporting as of December 31, 2022 has been audited by Ernst & Young LLP, an independent registered public accounting firm, as stated in its report which is included in Item 8 of this Annual Report on Form 10-K .
Changes in internal control over financial reporting
There were no changes in our internal control over financial reporting identified in connection with the evaluation required by Rule 13a-15(d) and 15d-15(d) of the Exchange Act during the quarter ended December 31, 2022 , that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.
Inherent limitation on the effectiveness of internal control
The effectiveness of any system of internal control over financial reporting, including ours, is subject to inherent limitations, including the exercise of judgment in designing, implementing, operating, and evaluating the controls and procedures, and the inability to eliminate misconduct completely. Accordingly, any system of internal control over financial reporting, including ours, no matter how well designed and operated, can only provide reasonable, not absolute assurances. In addition, 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. We intend to continue to monitor and upgrade our internal controls as necessary or appropriate for our business, but cannot assure you that such improvements will be sufficient to provide us with effective internal control over financial reporting.
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Item 9B. Other Information.
Not applicable.
Item 9C. Disclosure Regarding Foreign Jurisdictions that Prevent Inspections.
Not Applicable.
PART III
Item 10. Directors, Executive Officers and Corporate Governance
The information required by this item is incorporated by reference to our Proxy Statement relating to our 2023 Annual Meeting of Shareholders. The Proxy Statement will be filed with the Securities and Exchange Commission within 120 days of the fiscal year ended December 31, 2022.
Codes of Business Conduct and Ethics
Our board of directors has adopted a Code of Business Conduct and Ethics that applies to all officers, directors and employees, which is available on our website at (https://investors.bandwidth.com/corporate-governance/governance-overview) under “Governance Documents”. We intend to satisfy the disclosure requirement under Item 5.05 of Form 8-K regarding amendments to, or waiver from, a provision of our Code of Business Conduct and Ethics and by posting such information on the website address and location specified above.
Item 11. Executive Compensation
The information required by this item is incorporated by reference to our Proxy Statement relating to our 2023 Annual Meeting of Shareholders. The Proxy Statement will be filed with the Securities and Exchange Commission within 120 days of the fiscal year ended December 31, 2022.
Item 12. Security Ownership of Certain Beneficial Owners and Management Related Stockholder Matters
The information required by this item is incorporated by reference to our Proxy Statement relating to our 2023 Annual Meeting of Shareholders. The Proxy Statement will be filed with the Securities and Exchange Commission within 120 days of the fiscal year ended December 31, 2022.
Item 13. Certain Relationships and Related Transactions and Director Independence
The information required by this item is incorporated by reference to our Proxy Statement relating to our 2023 Annual Meeting of Shareholders. The Proxy Statement will be filed with the Securities and Exchange Commission within 120 days of the fiscal year ended December 31, 2022.
Item 14. Principal Accountant Fees and Services
Our independent registered public accounting firm is Ernst & Young LLP , Raleigh, NC , Auditor Firm ID: 42 .
The information required by this item is incorporated by reference to our Proxy Statement relating to our 2023 Annual Meeting of Shareholders. The Proxy Statement will be filed with the Securities and Exchange Commission within 120 days of the fiscal year ended December 31, 2022.
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PART IV
Item 15. Exhibits and Financial Statement Schedules
(a) The following documents are filed as part of this report:
1. Financial Statements
See Index to Financial Statements at Item 8 herein.
2. Financial Statement Schedules
Schedules not listed above have been omitted because they are not required, not applicable, or the required information is otherwise included.
3. Exhibits
Exhibit Index
Exhibit
number
Description of Exhibit Form File No. Exhibit Filing Date
2.1
Reorganization Agreement, dated as of November 30, 2016, by and between Bandwidth.com, Inc. and Republic Wireless, Inc. S-1 333-220945 2.1 10/13/2017
2.2
Share Purchase Agreement, by and between Bandwidth Inc. and Voicebox S.à r.l, Mr Itay Rosenfeld, Mr Stefaan Konings, Mr Dirk Hermans, Mr Gaetan Brichet and Stichting Administratiekantoor Voice, dated October 12, 2020. 8-K 001-38285 2.1 10/13/2020
3.1
Second Amended and Restated Certificate of Incorporation. 10-Q 001-38285 3.1 12/14/2017
3.2
Second Amended and Restated Bylaws. 10-Q 001-38285 3.2 12/14/2017
4.1
Investors’ Rights Agreement. S-1 333-220945 4.2 10/13/2017
4.2
Form of Buy-Sell Agreement. S-1 333-220945 4.3 10/13/2017
4.3
Description of Registrant’s Securities. Filed herewith
4.4
Indenture, dated February 28, 2020, between Bandwidth Inc. and Wilmington Trust, National Association 8-K 001-38285 4.1 3/2/2020
4.5
Form of 0.250% Convertible Senior Notes due March 1, 2026 (included as Exhibit A to Exhibit 4.1) 8-K 001-38285 4.2 3/2/2020
4.6
Indenture, dated March 16, 2021, between Bandwidth Inc. and Wilmington Trust, National Association. 8-K 001-38285 4.1 3/16/2021
4.7
Form of 0.50% Convertible Senior Notes due April 1, 2028 (included as Exhibit A to Exhibit 4.1). 8-K 001-38285 4.2 3/16/2021
10.1
Form of Indemnification and Advancement Agreement between Bandwidth Inc. and its directors and certain officers. 10-K 001-38285 10.1 2/25/2022
10.2
2010 Equity Compensation Plan and forms of awards thereunder. S-1 333-220945 10.4 10/13/2017
10.3
Employment Agreement, dated as of January 1, 2015, as amended on March 9, 2017, by and between Bandwidth.com, Inc. and David A. Morken. S-1 333-220945 10.8 10/13/2017
10.4
Office Lease, by and between Venture Center LLC and Bandwidth.com, Inc., dated January 22, 2013, as amended to date. S-1 333-220945 10.11 10/13/2017
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10.5
Sublease, by and between Allied Telesis Capital Corporation and Bandwidth.com, Inc., dated December 1, 2015. S-1 333-220945 10.12 10/13/2017
10.6
Transition Services Agreement, by and between Bandwidth.com, Inc. and Republic Wireless, Inc., dated November 30, 2016. S-1 333-220945 10.14 10/13/2017
10.7
Transition Services Agreement, by and between Republic Wireless, Inc. and Bandwidth.com, Inc., dated November 30, 2016. S-1 333-220945 10.15 10/13/2017
10.8
Tax Sharing Agreement, by and between Bandwidth.com, Inc. and Republic Wireless, Inc., dated November 30, 2016. S-1 333-220945 10.16 10/13/2017
10.9
Employee Matters Agreement, by and between Bandwidth.com, Inc. and Republic Wireless, Inc., dated November 30, 2016. S-1 333-220945 10.17 10/13/2017
10.10
Master Services Agreement, by and between Bandwidth.com, Inc. and Republic Wireless, Inc., dated November 30, 2016. S-1 333-220945 10.18 10/13/2017
10.11
Master Service Agreement, by and between Level 3 Communications, LLC and Bandwidth.com, Inc, dated March 14, 2008, as amended to date. S-1 333-220945 10.19 10/13/2017
10.12
Form of Conversion Lock-up Agreement between Bandwidth Inc. and the Key Holders. S-1A 333-220945 10.2 10/30/2017
10.13
2017 Incentive Award Plan, and forms of award agreements thereunder. S-1A 333-220945 10.21 10/30/2017
10.14
Office Lease, by and between Keystone-Centennial II, LLC and Bandwidth.com, Inc., dated January 12, 2018. 10-K 001-38285 10.22 2/26/2018
10.15
Office Lease, by and between WP Propco III, LLC and Bandwidth Inc., dated January 1, 2019, Venture III amendment. 10-K 001-38285 10.23 2/15/2019
10.16
Office Lease, by and between WP Propco III, LLC and Bandwidth Inc., dated January 1, 2019, Venture I amendment. 10-K 001-38285 10.24 2/15/2019
10.17
Credit and Security Agreement, dated as of November 4, 2016 as amended and restated as of March 1, 2019, among Bandwidth Inc., KeyBank National Association, and KeyBanc Capital Markets Inc. 8-K 001-38285 10.1 3/04/2019
10.18
Bill of Sale, dated May 29, 2019. 8-K 001-38285 10.2 6/3/2019
10.19
Assignment and Acceptance Agreement, between KeyBank National Association and Pacific Western Bank, dated June 4, 2019. 10-Q 001-38285 10.4 8/2/2019
10.20
Revenue Commitment Schedule, by and between Bandwidth Inc. and Republic Wireless, Inc., dated July 1, 2019. 10-Q 001-38285 10.5 8/2/2019
10.21
Services Agreement, by and between Bandwidth Inc. and Republic Wireless, Inc. dated September 30, 2019. 10-Q 001-38285 10.1 11/7/2019
10.22
Employment Agreement, dated as of December 6, 2019, by and between Bandwidth.com, Inc. and Rebecca Bottorff. 10-K 001-38285 10.30 2/21/2020
10.23
Confirmation of Base Capped Call Transaction, dated February 25, 2020, between Bandwidth Inc. and Barclays Bank PLC. 8-K 001-38285 10.1 3/2/2020
10.24
Confirmation of Base Capped Call Transaction, dated February 25, 2020, between Bandwidth Inc. and JPMorgan Chase Bank, National Association, New York Branch. 8-K 001-38285 10.2 3/2/2020
10.25
Confirmation of Base Capped Call Transaction, dated February 25, 2020, between Bandwidth Inc. and Bank of Montreal. 8-K 001-38285 10.3 3/2/2020
10.26
Confirmation of Base Capped Call Transaction, dated February 25, 2020, between Bandwidth Inc. and Morgan Stanley & Co. LLC. 8-K 001-38285 10.4 3/2/2020
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10.27
Confirmation of Base Capped Call Transaction, dated February 25, 2020, between Bandwidth Inc. and Goldman Sachs & Co. LLC. 8-K 001-38285 10.5 3/2/2020
10.28
Confirmation of Additional Capped Call Transaction, dated February 26, 2020, between Bandwidth Inc. and Barclays Bank PLC. 8-K 001-38285 10.6 3/2/2020
10.29
Confirmation of Additional Capped Call Transaction, dated February 26, 2020, between Bandwidth Inc. and JPMorgan Chase Bank, National Association, New York Branch. 8-K 001-38285 10.7 3/2/2020
10.30
Confirmation of Additional Capped Call Transaction, dated February 26, 2020, between Bandwidth Inc. and Bank of Montreal. 8-K 001-38285 10.8 3/2/2020
10.31
Confirmation of Additional Capped Call Transaction, dated February 26, 2020, between Bandwidth Inc. and Morgan Stanley & Co. LLC. 8-K 001-38285 10.9 3/2/2020
10.32
Confirmation of Additional Capped Call Transaction, dated February 26, 2020, between Bandwidth Inc. and Goldman Sachs & Co. LLC. 8-K 001-38285 10.10 3/2/2020
10.33
Purchase and Sale Agreement with the State of North Carolina, dated June 15, 2020. 8-K 001-38285 10.1 6/17/2020
10.34
Management Warranty Deed, by and between Bandwidth Inc. and Mr Itay Rosenfeld, Mr Stefaan Konings, Mr Dirk Hermans and Mr Gaetan Brichet, dated October 12, 2020. 8-K 001-38285 10.1 10/13/2020
10.35
Registration Rights Agreement, by and between Bandwidth Inc. and Voicebox S.á r.l, dated Octonber 12, 2020. 8-K 001-38285 10.2 10/13/2020
10.36
Confirmation of Base Capped Call Transaction, dated March 11, 2021, between Bandwidth Inc. and Bank of Montreal. 8-K 001-38285 10.1 3/16/2021
10.37
Confirmation of Base Capped Call Transaction, dated March 11, 2021, between Bandwidth Inc. and Citibank, N.A. 8-K 001-38285 10.2 3/16/2021
10.38
Confirmation of Base Capped Call Transaction, dated March 11, 2021, between Bandwidth Inc. and Goldman Sachs & Co. LLC. 8-K 001-38285 10.3 3/16/2021
10.39
Confirmation of Base Capped Call Transaction, dated March 11, 2021, between Bandwidth Inc. and Morgan Stanley & Co. LLC. 8-K 001-38285 10.4 3/16/2021
10.40^
Purchase and Sale Agreement dated May 27, 2021, between Bandwidth Inc. and USEF Edwards Mill Owner, LLC. 8-K 001-38285 10.1 5/28/2021
10.41^
Lease Agreement dated May 27, 2021, between Bandwidth Inc. and USEF Edwards Mill Owner, LLC. 8-K 001-38285 10.2 5/28/2021
10.42
Escrow Agreement dated May 27, 2021, between Bandwidth Inc., USEF Edwards Mill Owner, LLC and Chicago Title Insurance Company. 8-K 001-38285 10.3 5/28/2021
10.43
Employment Agreement, dated July 6, 2021, between the Company and Daryl Raiford. 8-K 001-38285 10.1 7/8/2021
10.44
Employment Agreement, dated February 22, 2022, between the Company and Anthony F. Bartolo. 8-K 001-38285 10.1 2/22/2022
10.45
Employment Agreement, dated February 24, 2022, between the Company and R. Brandon Asbill. 10-K 001-38285 10.52 2/25/2022
10.46
Amended and Restated 2017 Incentive Award Plan.
10-Q 001-38285 10.2 5/6/2022
10.47
First Amendment to Lease Agreement, dated April 21, 2022, between Bandwidth Inc. and USEF Edwards Mill Owner, LLC. 10-Q 001-38285 10.3 5/6/2022
10.48
First Amendment to Escrow Agreement, dated April 21, 2022, between Bandwidth Inc., USEF Edwards Mill Owner, LLC and Chicago Title Insurance Company. 10-Q 001-38285 10.4 5/6/2022
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10.49^
Senior Secured Credit Facilities Credit Agreement, among Bandwidth Inc., the several lenders from time to time party thereto, and Silicon Valley Bank, dated as of June 6, 2022.
10-Q 001-38285 10.1^ 8/4/2022
10.50
Forms of Global Restricted Stock Unit Grant Notice and Global Restricted Stock Unit Agreement. Filed herewith
10.51
First Amendment to Employment Agreement, dated March 24, 2022, between the Company and Anthony F. Bartolo. Filed herewith
10.52
First Amendment to Employment Agreement, dated March 25, 2022, between the Company and Daryl E. Raiford. Filed herewith
21.1
List of subsidiaries of Bandwidth Inc. Filed herewith
23.1
Consent of Ernst & Young LLP, Independent Registered
Public Accounting Firm. Filed herewith
23.2
Consent of KPMG LLP, Independent Registered Public Accounting Firm. 8-K/A 001-38285 23.1 1/14/2021
31.1
Certificate of the Chief Executive Officer pursuant to Exchange Act Rules 13a-14(a) and 15d-14(a), as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. Filed herewith
31.2
Certification of the Chief Financial Officer pursuant to Exchange Act Rules 13a-14(a) and 15d-14(a), as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. Filed herewith
32.1*
Certification of the Chief Executive Officer and Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act 2002. Furnished herewith
101.INS 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. Filed herewith
101.SCH XBRL Taxonomy Schema Document. Filed herewith
101.CAL XBRL Taxonomy Extension Calculation Linkbase Document. Filed herewith
101.DEF XBRL Taxonomy Extension Definition Linkbase Document. Filed herewith
101.LAB XBRL Taxonomy Extension Label Linkbase Document. Filed herewith
101.PRE XBRL Taxonomy Extension Presentation Linkbase Document. Filed herewith
^ Certain of the exhibits to Exhibit 10.40, 10.41 and 10.49, as applicable, have been omitted in accordance with Regulation S-K Item 601. The Registrant agrees to furnish a copy of all omitted exhibits to the SEC upon its request.
* The certifications furnished in Exhibit 32.1 hereto are deemed to accompany this Annual Report on Form 10-K and will not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, except to the extent that the registrant specifically incorporates it by reference.
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Item 16. Form 10-K Summary
None.
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SIGNATURES
Pursuant to the requirements of the Section 13 or 15(d) of the Securities Exchange Act of 1934, as amended, the Registrant has duly caused this Annual Report on Form 10-K to be signed on its behalf by the undersigned, thereunto duly authorized.
BANDWIDTH INC.
Date: February 23, 2023 By: /s/ David A. Morken
David A. Morken
Chief Executive Officer
(Principal Executive Officer)
Date: February 23, 2023 By: /s/ Daryl E. Raiford
Daryl E. Raiford
Chief Financial Officer
(Principal Financial Officer)
Date: February 23, 2023 By: /s/ Devin M. Krupka
Devin M. Krupka
Senior Vice President, Corporate Controller
(Principal Accounting Officer)
Date: February 23, 2023 By: /s/ John C. Murdock
John C. Murdock
Director
Date: February 23, 2023 By: /s/ Brian D. Bailey
Brian D. Bailey
Director
Date: February 23, 2023 By: /s/ Lukas M. Roush
Lukas M. Roush
Director
Date: February 23, 2023 By: /s/ Douglas A. Suriano
Douglas A. Suriano
Director
Date: February 23, 2023 By: /s/ Rebecca Bottorff
Rebecca Bottorff
Director
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