What changed in this filing

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Item 9A. Controls and Procedures

2025-03-11 compared with 2024-04-01 · 38 added, 42 removed, 104 unchanged (43% of the section changed)

Controls and Procedures

Inherent Limitations on Effectiveness of Controls

A control system, no matter how well conceived and operated, can provide only reasonable, not absolute, assurance that the objectives of the control system are met.

Because of the inherent limitations in all control systems, no evaluation of controls can provide absolute assurance that all control issues and instances of fraud, if any, within the company have been detected.

The design of any system of controls also is based in part upon 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.

Over time, controls may become inadequate because of changes in conditions, or the degree of compliance with the policies or procedures may deteriorate.

Because of the inherent limitations in a cost-effective control system, misstatements due to error or fraud may occur and not be detected.

Evaluation of Disclosure Controls and Procedures

(a) Evaluation of Disclosure Controls and Procedures

Our management, with the participation of our Chief Executive Officer and Chief Financial Officer, has evaluated the effectiveness of our disclosure controls and procedures as of the end of the period covered by this Annual Report on Form 10-K.

The term “disclosure controls and procedures,” as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended (the Exchange Act), means controls and other procedures of a company that are designed to ensure that information required to be disclosed by a company in the reports that it files or submits under the Exchange Act is recorded, processed, summarized, and reported within the time periods specified in the SEC’s rules and

Exchange Act is recorded, processed, summarized, and reported within the time periods specified in the SEC’s rules and forms.

Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed by a company in the reports that it files or submits under the Exchange Act is accumulated and communicated to the company’s management, including its principal executive and principal financial officers, or persons performing similar functions, as appropriate to allow timely decisions regarding required disclosure.

In designing and evaluating our disclosure controls and procedures, our management recognizes that disclosure controls and procedures, no matter how well conceived and operated, can provide only reasonable assurance that the objectives of the disclosure controls and procedures are met.

Based on that evaluation, our Chief Executive Officer and Chief Financial Officer concluded that due to the material weaknesses described below, our disclosure controls and procedures were not effective at a reasonable assurance level as of December 31, 2023.

Management’s Report on Internal Control Over Financial Reporting

Based on that evaluation, our Chief Executive Officer and Chief Financial Officer concluded that our disclosure controls and procedures were effective at a reasonable assurance level as of December 31, 2024.

(b) Management’s Report on Internal Control Over Financial Reporting

This annual report does not include an attestation report of our registered public accounting firm due to an exemption for “emerging growth companies.”

3 unchanged sentences

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.

Based on this assessment, our management concluded that our internal control over financial reporting was not effective as of December 31, 2023, due to the three material weaknesses in our internal control over financial reporting described below.

As previously reported, management has determined that the Company had the following material weaknesses in its internal control over financial reporting, which continued to exist as of December 31, 2023:

Based on this assessment, our management concluded that our internal control over financial re porting was effective as of December 31, 2024, due to the remediation of three material weaknesses in our internal control over financial reporting described below.

I n light of this fact, our management has concluded that the consolidated financial statements for the periods covered by and included in this Annual Report on Form 10-K fairly present, in all material respects, our financial position, results of operations and cash flows for the periods presented in conformity with GAAP.

c) Remediation of Previously Identified Material Weaknesses in Internal Control Over Financial Reporting

As previously reported, management determined that the Company had the following material weaknesses in its internal control over financial reporting at December 31, 2023:

our controls were not operating effectively to allow sufficient and timely review of significant accounting transactions, account reconciliations and presentation of the statement of cash flows;

2 unchanged sentences

our controls were not adequately designed and operating effectively to allow sufficient and timely review of the key assumptions and mathematical accuracy of our going concern assessment.

Remediation activities

In response to these material weaknesses, with the oversight from the Audit Committee of the Board of Directors, we have continued to implement significant changes to improve our internal control structure.

Specifically, our remediation efforts include the following:

(1) strengthening our internal controls over financial reporting and the design of our internal-control framework through enhanced accounting policies, control activities, and monitoring;

(2) enhancing the precision of control around balance sheets reconciliation and cash flow review controls, including the review of underlying source data and procedures to strengthen the retention of contemporaneous documentation of control reviews;

(3) implementing a new enterprise resource planning (“ERP”) system, additional financial modules to support reconciliations, and other systems and processes related to fixed assets, leases, revenue recognition, and equity administration to increase capabilities over our consolidated financial statement recording and reporting processes;

(4) hiring additional full-time accounting personnel with appropriate levels of experience to increase our accounting and technical expertise, including a new Chief Financial Officer, a Corporate Controller, an Internal Controls Manager, a Tax Manager, a Director of IT, and additional accounting staff, all with public company experience and / or a Certified Public Accountant certification;

(5) reallocating responsibilities across our accounting organization so that the appropriate level of knowledge and experience is applied based on complexity of transactions.

We intend to continue to take steps to remediate the material weaknesses described above, design and implement additional controls, and further evolve our accounting processes.

The remaining material weaknesses cannot be considered fully remediated until the applicable controls operate for a sufficient period of time and management has concluded, through testing, that these controls are operating effectively.

We believe the actions described above, once fully implemented and tested, will be sufficient to remediate the identified material weaknesses and strengthen our internal controls.

Changes in Internal Control over Financial Reporting

Except as otherwise described herein, there were no changes in our internal control over financial reporting identified in connection with the evaluation required by Rules 13a-15(d) and 15d-15(d) of the Exchange Act that occurred during the year ended December 31, 2023 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

Management, with the participation of our Chief Executive Officer and Chief Financial Officer, has continued to implement remediation plans throughout 2024.

The actions we took to remediate the material weaknesses included the following:

• We hired additional accounting and financial personnel who possess public company accounting and reporting technical expertise, including a Chief Financial Officer, VP Corporate Accounting, and other key accounting and finance roles to oversee internal controls and procedures and implement a formal closing process.

• Our Internal Audit team assisted us in evaluating our internal-control framework and made several recommendations for findings noted.

We enhanced our controls and documentation support based on these recommendations.

• We have strengthened procedures and controls around balance sheet reconciliations and cash flow review by implementing account reconciliation software and ensuring appropriate personnel include adequate source data and procedures to support our documentation.

• We enhanced our ERP system to assist us in supporting reconciliations and in processing transactions related to fixed assets, leases, revenue recognition, and equity administration more efficiently and effectively.

The ERP system provides significant enhancements to our internal control and reporting environment.

We completed our remediation plan for all material weaknesses noted above and believe our controls are appropriately designed.

Through testing of our internal controls completed during the year ended December 31, 2024, management has determined that the controls related to the remediation actions discussed above were effectively designed and operated effectively for a sufficient period of time to enable us to conclude that the material weaknesses have been remediated as of December 31, 2024.

(d) Inherent Limitations on Effectiveness of Controls

A control system, no matter how well conceived and operated, can provide only reasonable, not absolute, assurance that the objectives of the control system are met.

Over time, controls may become inadequate because of changes in conditions, or the degree of compliance with the policies or procedures may deteriorate.

Because of the inherent limitations in a cost-effective control system, misstatements due to error or fraud may occur and not be detected.

(e) Changes in Internal Control over Financial Reporting

Except as otherwise described herein, there were no changes in our internal control over financial reporting identified in connection with the evaluation required by Rules 13a-15(d) and 15d-15(d) of the Exchange Act that occurred during the quarter ended December 31, 2024 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

Other Information

Trading Arrangements

During the Company's last fiscal quarter, none of the Company’s directors and officers (as defined in Rule 16a-1(f) under the Exchange Act) adopted or terminated contracts, instructions or written plans for the purchase or sale of the Company’s securities pursuant to Rule 10b5-1.

Disclosure Regarding Foreign Jurisdiction That Prevent Inspections

22 unchanged sentences

10-Q 001-41026 3.1 08/14/2023

3.1 08/14/2023

3.2 Amended and Restated Bylaws

10-Q 001-41026

001-41026 3.1

3.3 Certificate of Retirement

8-K 001-41026 3.1 07/10/2023

4.1 Description of the Registrant’s Securities Registered Pursuant to Section 12 of the Exchange Act of 1934

2 unchanged sentences

S-1 333-260333 10.1 10/18/2021

10.1 10/18/2021

10.2+ 2011 Stock Plan, as amended, and forms of agreements thereunder.

S-1 333-260333 10.2 10/18/2021

10.2 10/18/2021

10.3+ Amended and Restated 2021 Equity Incentive Plan and form of agreements thereunder

1 unchanged sentence

S-1 333-260333 10.4 11/02/2021

Offer Letter, dated February 14, 2020, by and between the Company and Frank Patchel.

S-1 333-260333 10.5 10/18/2021

10.5+ Offer Letter, dated July 9 , 202 4 , by and between the Company and Marc Suidan .

10.6† Loan and Security Agreement, dated October 21, 2021, by and between the Company and City National Bank.

S-1 333-260333 10.6 10/18/2021

10.6 10/18/2021

10.7 First Amendment to the Loan and Security Agreement, dated October 21, 2021, by and between the Company and City National Bank.

5 unchanged sentences

10.10 Fourth Amendment to the Loan and Security Agreement, dated as of December 29, 2023, by and between the Registrant and City National Bank

L ist of Subsidiaries of Backblaze, Inc.

23.1 Consent of BDO USA, P.C.

, Independent Registered Public Accounting Firm.

B a ckblaze, Inc.

2024 New Employee Equity Incentive Plan and form s of agreement thereun der

I nsider Trading Polic y

21.1 List of Subsidiaries of Backblaze, Inc.

23.1 Consent of BDO USA, P.C., Independent Registered Public Accounting Firm.

24.1 Power of Attorney ( contained on signature page to this report ) .

30 unchanged sentences

POWER OF ATTORNEY

KNOW ALL PERSONS BY THESE PRESENTS, that each person whose signature appears below hereby constitutes and appoints Gleb Budman and Frank Patchel, and each of them, as his or her true and lawful attorney-in-fact and agent with full 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 all exhibits thereto and other documents in connection therewith, with the SEC, granting unto said attorney-in-fact and agent full power and authority to do and perform each and every act and thing requisite and necessary to be done in connection therewith, as fully for all intents and purposes as he or she might or could do in person, hereby ratifying and confirming all that said attorney-in-fact and agent, or his substitute, may lawfully do or cause to be done by virtue hereof.

KNOW ALL PERSONS BY THESE PRESENTS, that each person whose signature appears below hereby constitutes and appoints Gleb Budman and Marc Suidan, and each of them, as his or her true and lawful attorney-in-fact and agent with full 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 all exhibits thereto and other documents in connection therewith, with the SEC, granting unto said attorney-in-fact and agent full power and authority to do and perform each and every act and thing requisite and necessary to be done in connection therewith, as fully for all intents and purposes as he or she might or could do in person, hereby ratifying and confirming all that said attorney-in-fact and agent, or his substitute, may lawfully 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 by the following persons on behalf of the registrant and in the capacities and on the dates indicated.

Signature Title Date

/s/ Gleb Budman

Chief Executive Officer and Chairperson

1 unchanged sentence

March 11, 2025

/s/ Frank Patchel

Chief Financial Officer

1 unchanged sentence

March 11, 2025

Frank Patchel

/s/ Jocelyn Carter-Miller Director March 29, 2024

Director March 11, 2025

Jocelyn Carter-Miller

/s/ Barbara Nelson

Director March 11, 2025

1 unchanged sentence

Director March 11, 2025

/s/ Evelyn D’An

Director March 11, 2025

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