Item 9A. Controls and Procedures
Item 9A. Controls and Procedures.
Evaluation of Disclosure Controls and Procedures
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 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
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, 2023, based on the framework in Internal Control – Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission.
RSM US LLP, the independent registered public accounting firm that audited our consolidated financial statements as of and for the year ended December 31, 2023 included in this Report, has also audited the effectiveness of Certara’s internal control over financial reporting as of December 31, 2023. The report of RSM US LLP is included under Item 8 of this Report.
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, 2023 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.
Item 9B. Other Information.
(a) None
(b) Director and Officer 10b5-1 Trading Arrangements
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Our directors and officers may adopt written plans, known as Rule 10b5-1 plans, in which they will contract with a broker to buy or sell our common stock on a periodic basis. Under a Rule 10b5-1 plan, a broker executes trades pursuant to parameters established by the director or officer when entering into the plan, without further direction from them.
On November 20, 2023 , Patrick F. Smith , President , Certara Drug Development Solutions, adopted a Rule 10b5-1 trading plan. The plan provides for the potential sale, on the dates and prices set forth in the plan, of up to 26,382 shares of our common stock from February 20, 2024, through April 30, 2024.
Item 9C. Disclosure Regarding Foreign Jurisdictions That Prevent Inspections.
Not Applicable
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PART III
Item 10. Directors, Executive Officers and Corporate Governance.
We have adopted a Code of Conduct (the “Code of Conduct”) applicable to all employees, executive officers and directors that addresses legal and ethical issues that may be encountered in carrying out their duties and responsibilities, including the requirement to report any conduct they believe to be a violation of the Code of Conduct. The Code of Conduct is available on our website, www.certara.com. The information available on or through our website is not part of this annual report. If we ever were to amend or waive any provision of our Code of Conduct that applies to our principal executive officer, principal financial officer, principal accounting officer or any person performing similar functions, we intend to satisfy our disclosure obligations with respect to any such waiver or amendment by posting such information on our internet website set forth above rather than by filing a Form 8-K.
The remaining information required under this item is incorporated herein by reference to our definitive proxy statement (the “Proxy Statement”) pursuant to Regulation 14A under the Securities Exchange Act of 1934, as amended, which Proxy Statement is expected to be filed with Securities and Exchange Commission not later than 120 days after the close of our fiscal year ended December 31, 2023.
Item 11. Executive Compensation.
The information required by this item will be set forth in the Proxy Statement and is incorporated herein by reference.
Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters.
The information required by this item will be set forth in the Proxy Statement and is incorporated herein by reference.
Item 13. Certain Relationships and Related Transactions, and Director Independence.
The information required by this item will be set forth in the Proxy Statement and is incorporated herein by reference.
Item 14. Principal Accounting Fees and Services.
The information required by this item will be set forth in the Proxy Statement and is incorporated herein by reference.
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PART IV
Item 15. Exhibits, Financial Statement Schedules.
(a) The following documents are filed as part of this Annual Report:
(1) Financial Statements
The financial statements filed as part of this Annual Report are included in Part II, Item 8 of this Annual Report.
(2) Financial Statement Schedules
Financial statement schedules have been omitted in this Annual Report because they are not applicable, not required under the instructions or the information requested is set forth in the financial statements or related notes thereto.
(3) List of Exhibits required by Item 601 of Regulation S-K
Incorporated by Reference
Exhibit
Number Exhibit Title Form File No. Exhibit Filing Date
2.1 Agreement and Plan of Merger dated as of August 2, 2021, by and among Certara, Inc., Puma Merger Sub, LLC and Shareholder Representative Services LLC, as the Equityholder Representative thereunder
8-K 001-39799 2.1 8/5/2021
3.1 Amended and Restated Certificate of Incorporation of Certara, Inc.
S-8 333-251368 4.1 12/15/2020
3.2 Amended and Restated Bylaws of Certara, Inc.
S-8 333-251368 4.2 12/15/2020
4.1 Form of Stock Certificate for Common Stock
S-1/A 333-250182 4.1 12/03/2020
4.2 Description of Certara, Inc.’s Securities
10-K 001-39799 4.2 3/15/2021
10.1 Credit Agreement, dated as of August 15, 2017, among Certara Holdings, Inc. (f/k/a EQT Avatar Holdings, Inc.), Certara Holdco, Inc., Certara USA, Inc., 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
S-1/A 333-250182 10.3 11/18/2020
10.2 First Amendment, dated as of January 24, 2018, to the Credit Agreement, among Certara Holdings, Inc. (f/k/a EQT Avatar Holdings, Inc.), Certara Holdco, Inc., Certara USA, Inc., 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
S-1/A 333-250182 10.4 11/18/2020
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10.3 Second Amendment, dated as of April 3, 2018, to the Credit Agreement, among Certara Holdings, Inc. (f/k/a EQT Avatar Holdings, Inc.), Certara Holdco, Inc., Certara USA, Inc., Certara Intermediate, Inc. (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
S-1/A 333-250182 10.5 11/18/2020
10.4 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
8-K 001-39799 10.1 6/22/2021
10.5 Loan Guaranty, dated as of August 15, 2017, by and among the Loan Guarantors, as defined therein, and Jefferies Finance LLC, as Administrative Agent
S-1/A 333-250182 10.6 11/18/2020
10.6 Pledge and Security Agreement, dated as of August 15, 2017, by and among the Grantors, as defined therein, and Jefferies Finance LLC, as Agent
S-1/A 333-250182 10.7 11/18/2020
10.7 Loan Agreement, dated as of July 6, 2017, between Santo Holding (Deutschland) GmbH and Certara, Inc. (f/k/a EQT Avatar Topco, Inc.)
S-1/A 333-250182 10.8 11/18/2020
10.8* Form of Indemnification Agreement between Certara, Inc. and directors and executive officers of Certara, Inc.
S-1/A 333-250182 10.9 11/25/2020
10.9* Employment Agreement, dated as of May 14, 2019, by and among EQT Avatar Parent L.P., Certara USA, Inc. and William Feehery
S-1/A 333-250182 10.10 11/18/2020
10.10* Employment Agreement, dated September 26, 2018 between Certara UK Limited and Robert Aspbury
10-K 001-39799 10.21 3/1/2022
10.11* Employment Agreement, dated as of July 20, 2020, between Certara USA, Inc. and Leif E. Pedersen
10-K 001-39799 10.12 3/15/2021
10.12* Employment Agreement Dated as of July 11, 2014, between Certara USA, Inc. and M. Andrew Schmick .*
10-K 001-39799 10.11 3/15/2021
10.13* Employment Agreement, dated as of September 2, 2016, between D3 MEDICINE LLC, Certara USA, Inc. and Patrick Smith
10-K 001-39799 10.12 3/1/2023
10.14* Amended and Restated Employment Agreement dated as of November 7, 2023 between the Company and John E. Gallagher .*
10-Q 001-39799 10.1 11/08/2023
10.15 Form of Exchange Acknowledgement and Agreement
S-1/A 333-250182 10.19 12/03/2020
10.16 Form of Stock Restriction Agreement *
S-1/A 333-250182 10.20 12/03/2020
10.17 Form of Restricted Stock Unit Grant and Award Agreement (Certara, Inc. 2020 Incentive Plan)
10-K 001-39799 10.14 3-15-2021
10.18 Certara, Inc. 2020 Incentive Plan
S-1/A 333-250182 10.18 11/25/2020
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10.19 Form of 2022 Performance Stock Unit Grant Notice and Agreement for Certara, Inc. 2020 Incentive Plan
10-Q 001-39799 10.1 5/7/2021
10.20 2022 Amended and Restated Form of PSU Grant Award Agreement**
10-Q 333-250182 10.2 5/8/2023
10.21 F orm of PSU Grant and Award Agreement (2023 Grants) **
10-Q 001-39799 10.3 5/8/2023
10.22 Certara, Inc. 2020 Employee Stock Purchase Plan
S-1/A 333-250182 10.21 11/25/2020
10.23 Certara, Inc. Directors Deferral Plan *
10-K 001-39799 10.18 3/15/2021
10.24 Letter Agreement Dated as of November 3, 2022, by and among Certara, Inc. and Arsenal Saturn Holdings LP.
8-K 001-39799 10.1 11/7/2022
10.25 Stockholders Agreement, dated as of November 3, 2022, by and among Certara, Inc. and the other parties thereto
8-K 001-39799 10.2 11/7/2022
10.26 Registration Rights Agreement, dated as of November 3, 2022, by and among Certara, Inc. and the other parties thereto
8-K 001-39799 10.3 11/7/2022
10.27 LIBOR Transition Amendment.
10-Q 001-39799 10.1 8/9/2023
10.28 Clawback Policy Effective December 1, 2023 *
16.1 Letter from CohnReznick LLP to the Securities and Exchange Commission, dated March 30, 2022
8-K 001-39799 16.1 3/30/2022
21.1 Subsidiaries of the Registrant
23.1 Consent of CohnReznick LLP
23.2 Consent of RSM US LLP
24.1 Power of Attorney (included in the signature page to this Annual Report)
31.1 Certification of Principal Executive Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
31.2 Certification of Principal Financial and Accounting Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
32.1 Certification of Principal Executive Officer Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002+
32.2 Certification of Principal Financial Officer Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002+
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
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
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101.PRE XBRL Taxonomy Extension Presentation Linkbase Document
104 Cover Page Interactive Data File (formatted in Inline XBRL and contained in Exhibit 101)
* Management contract or compensatory plan or arrangement.
+ 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.
Item 16. Form 10-K Summary.
None.
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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.
CERTARA, INC.
Date: February 29, 2024
By: /s/ WILLIAM F. FEEHERY
Name: William F. Feehery
Title: Chief Executive Officer
(Principal Executive Officer)
Date: February 29, 2024
By: /s/ JOHN E. GALLAGHER III
Name: John E. Gallagher III
Title: Chief Financial Officer
(Principal Financial Officer)
KNOW ALL BY THESE PRESENTS, that each person whose signature appears below hereby constitutes and appoints William F. Feehery, John E. Gallagher III and Richard M. Traynor and each of them, his or her true and lawful agent, proxy and attorney-in-fact, with full power of substitution and resubstitution, for him or her and in his or her name, place and stead, 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 Securities and Exchange Commission, granting unto said attorneys-in-fact and agents, and each of them, 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 to all intents and purposes as he or she might or could do in person, hereby ratifying and confirming all that said attorneys-in-fact and agents, or any of them, or their or his substitutes, may lawfully do or cause to be done by virtue thereof.
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/ WILLIAM F. FEEHERY Chief Executive Officer and Director February 29, 2024
William F. Feehery (Principal Executive Officer)
/s/ JOHN E. GALLAGHER III Senior Vice President and February 29, 2024
John E. Gallagher III Chief Financial Officer
(Principal Financial Officer
and Principal Accounting Officer)
/s/ JAMES CASHMAN III Chairman February 29, 2024
James E. Cashman III
/s/ ERAN BROSHY Director February 29, 2024
Eran Broshy
/s/ CYNTHIA COLLINS Director February 29, 2024
Cynthia Collins
/s/ ROSEMARY CRANE Director February 29, 2024
Rose Crane
/s/ NANCY KILLEFER Director February 29, 2024
Nancy Killefer
/s/ STEPHEN MCLEAN Director February 29, 2024
Stephen McLean
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/s/ DAVID SPAIGHT Director February 29, 2024
David Spaight
/s/ MATTHEW WALSH Director February 29, 2024
Matthew Walsh
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