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Item 9A. Controls and Procedures

2023-03-01 compared with 2022-03-01 · 39 added, 15 removed, 112 unchanged (33% of the section changed)

2 unchanged sentences

As of the end of the period covered by this Annual Report on Form 10-K, we performed an evaluation under the supervision and with the participation of management, including our Chief Executive Officer and our Chief Financial Officer, of the design and effectiveness of our disclosure controls and procedures (as defined in Rules 13a-15(e) or 15d-15(e) under the Securities Exchange Act of 1934 as amended (the “Exchange Act”).

Based upon that evaluation, our Chief Executive Officer and Chief Financial Officer concluded, as of the end of the period covered by this Annual Report that our disclosure controls and procedures were not effective due to a material weakness related to information technology general controls, as discussed in Management's Annual Report on Internal Control over Financial Reporting.

Notwithstanding the material weakness described in Management's Annual Report on Internal Control Over Financial Reporting, our management has concluded that our consolidated financial statements for the periods covered by and included in this Annual Report are prepared in accordance with accounting principles generally accepted in the United States (“GAAP”) and fairly present, in all material respects, our financial position, results of operations and cash flows for each of the periods presented herein.

Based upon that evaluation, our Chief Executive Officer and Chief Financial Officer concluded, as of the end of the period covered by this Annual Report that our disclosure controls and procedures were effective at the reasonable assurance level to ensure that information required to be disclosed was recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms, and to provide reasonable assurance that information required to be disclosed in such reports is accumulated and communicated to the Company’s management, including its 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

See Management's Report of Internal Control Over Financial Reporting and the Report of Independent Registered Public Accounting Firm on our internal control over financial reporting in Item 8, which are incorporated herein by reference.

Our management is responsible for establishing and maintaining adequate internal control over financial reporting, as is defined in the Exchange Act.

Internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of our financial reporting and the preparation of financial statements for external reporting purposes in accordance with GAAP and includes those policies and procedures that:

(1) pertain to the maintenance of records that in reasonable detail accurately and fairly reflect our transactions and the dispositions of our assets; (2) provide reasonable assurance that our transactions are recorded as necessary to permit preparation of financial statements in accordance with GAAP and that our receipts and expenditures are being made only in accordance with appropriate authorizations; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of our assets that could have a material effect on our consolidated financial statements.

Our management conducted an evaluation of the effectiveness of our internal control over financial reporting as of December 31, 2022, based on the framework in Internal Control – Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission.

As disclosed in the Management’s Annual Report on Internal Control over Financial Reporting in Item 8 in our Annual Report on Form 10-K for the year ended December 31, 2021, during the fourth quarter of 2021, we identified a material weakness in internal control related to ineffective information technology general controls in the areas over a cloud-based software system that supports our project set-up and time submissions for services provided to our customers.

During 2022, management implemented its previously disclosed remediation plan that included:

(i) Implement a more robust process for the onboarding, offboarding, and access rights modifications in the application environment to ensure appropriate provisioning of rights on a least privileged basis;

(ii) Document the levels of privileged access roles with specific “allowed” capabilities warranting levels of access for specific roles;

(iii) Implement a quarterly log review by business owners to ensure that no privileged account access was provided and removed outside of documented service requests;

(iv) Implement a controlled process for application and system level changes in the application environment to ensure appropriate understanding of the changes on financial reporting;

and (v) Strengthen ownership and reporting through the IT Governance Process currently in place which will serve as the mechanism to monitor the remediation update.

During the fourth quarter of 2022, we completed our testing of the operating effectiveness of the implemented controls and found them to be effective.

As a result, we have concluded the material weakness has been remediated as of December 31, 2022.

Changes in Internal Control over Financial Reporting

There were no changes in our internal control over financial reporting (as such term is defined in Rules 13a-15(f) under the Exchange Act) during the quarter ended December 31, 2021 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

Except for the changes in connection with our implementation of the remediation plan discussed above, there were no changes in our internal control over financial reporting (as such term is defined in Rules 13a-15(f) under 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.

Other Information.

29 unchanged sentences

Description of Certara, Inc.’s Securities

Stockholders Agreement, dated as of December 10, 2020 by and among Certara, Inc.

and the other parties named therein

Amended and Restated Registration Rights Agreement, dated as of December 10, 2020 by and among Certara, Inc.

and the other parties named therein

Credit Agreement, dated as of August 15, 2017, among Certara Holdings, Inc.

4 unchanged sentences

(f/k/a EQT Avatar Holdings, Inc.), Certara Holdco, Inc., Certara USA, Inc., Certara Intermediate, Inc.

Avatar Intermediate, Inc.), Jefferies Finance LLC, as Administrative Agent and Issuing Bank, Golub Capital LLC as Issuing Bank and each lender from time to time party thereto

(f/k/a EQT Avatar Intermediate, Inc.), Jefferies Finance LLC, as Administrative Agent and Issuing Bank, Golub Capital LLC as Issuing Bank and each lender from time to time party thereto

Third Amendment, dated as of June 17, 2021, to the Credit Agreement, among Certara Holdings, Inc., Certara Holdco, Inc., Certara USA, Inc., Certara Intermediate, Inc., Bank of America, N.A., as Administrative Agent for the lenders from time to time party thereto and collateral agent for the secured parties thereunder

10 unchanged sentences

Employment Agreement, dated as of July 20, 2020, between Certara USA, Inc.

Employment Agreement, dated as of September 2, 2016, between D3 MEDICINE LLC, Certara USA, Inc.

and Patrick Smith

Certara, Inc.

13 unchanged sentences

and Justin Edge

Letter Agreement, dated as of November 3, 2022, by and among Certara, Inc.

and Arsenal Saturn Holdings LP

Stockholders Agreement, dated as of November 3, 2022, by and among Certara, Inc.

and the other parties thereto

Registration Rights Agreement, dated as of November 3, 2022, by and among Certara, Inc.

and the other parties thereto

Form of 2022 Performance Stock Unit Grant Notice and Agreement for Certara, Inc.

2020 Incentive Plan

Letter from CohnReznick LLP to the Securities and Exchange Commission, dated March 30, 2022

Subsidiaries of the Registrant

Consent of CohnReznick LLP

Consent of RSM US LLP

Power of Attorney (included in the signature page to this Annual Report)

12 unchanged sentences

+ This certification is deemed not filed for purposes of Section 18 of the Exchange Act, or otherwise subject to the liability of that section, nor shall it be deemed incorporated by reference into any filing under the Securities Act or the Exchange Act.

** Certain schedules and exhibits have been omitted pursuant to Item 601(a)(5) of Regulation S-K.

The registrant agrees to furnish a copy of any omitted schedule or exhibit to the SEC upon request;

provided, however, that the registrant may request confidential treatment pursuant to Rule 24b-2 of the Exchange Act for any document so furnished.

Form 10-K Summary.

21 unchanged sentences

(Principal Financial Officer and Principal Accounting Officer)

/s/ Stephen M.

/s/ Matthew Walsh

Matthew Walsh

/s/ Ethan Waxman

/s/ Eran Broshy

/s/ Cynthia Collins

Cynthia Collins

/s/ Rose Crane

/s/ Nancy Killefer

Nancy Killefer

/s/ Carol Gallagher

Carol Gallagher

/s/ Stephen McLean

Stephen McLean

/s/ David Spaight

David Spaight

/s/ Matthew Walsh

Matthew Walsh

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