Cricut, Inc. 10-K

Item 9A. Controls and Procedures Evaluation of Disclosure Controls and Procedures As required by Rule 13a-15(b) under the Exchange Act, our management, including our Chief Executive Officer and Chief Financial Officer, 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. Based upon that evaluation, our Chief Executive Officer and Chief Financial Officer concluded that, as of the end of the period covered by this Annual Report on Form 10-K, our disclosure controls and procedures were effective to provide reasonable assurance that information required to be disclosed by us in the reports that 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 to provide reasonable assurance that such information is accumulated and communicated to our management, including our Chief Executive Officer and Chief Financial Officer. Inherent Limitations on Effectiveness of Controls Our management, including our Chief Executive Officer and Chief Financial Officer, do not expect that our disclosure controls or our internal control over financial reporting will prevent all errors and all fraud. A control system, no matter how well conceived and operated, can provide only reasonable, not absolute, assurance that the 118 Table of Contents objectives of the control system are met. Further, the design of a control system must reflect the fact that there are resource constraints, and the benefits of controls must be considered relative to their costs. 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 or would be detected. These inherent limitations include the realities that judgments in decision-making can be faulty, and that breakdowns can occur because of a simple error or mistake. Additionally, controls can be circumvented by the individual acts of some persons, by collusion of two or more people or by management override of the controls. The design of any system of controls is also 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 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. Management’s Report on Internal Controls Over Financial Reporting Our management is responsible for establishing and maintaining adequate internal control over financial reporting, as defined in Rule 13a-15(f) and 15d-15(f) under the Exchange Act. Our management conducted an assessment of the effectiveness of our internal control over financial reporting as of December 31, 2023 based on the criteria set forth in Internal Control-Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission. Based on the assessment, our management has concluded that its internal control over financial reporting was effective as of December 31, 2023 to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements in accordance with GAAP. Our independent registered public accounting firm, BDO USA, P.C., has issued an audit report with respect to the effectiveness of our internal control over financial reporting as of December 31, 2023, which appears in Part II, 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 during the fourth quarter of 2023, which were identified in connection with management’s evaluation required by Rule 13a-15(d) and 15d-15(d) of the Exchange Act that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting. Item 9B. Other Information Securities Trading Plans of Directors and Executive Officers During our last fiscal quarter, the following director and officer, as defined in Rule 16a-1(f), terminated a “Rule 10b5-1 trading arrangement,” as defined in Regulation S-K Item 408, as follows: On November 30, 2023 , Ashish Arora , our Chief Executive Officer and a member of our Board of Directors , terminated a Rule 10b5-1 trading arrangement providing for the sale from time to time of an aggregate of up to 1,868,516 shares of our Class A common stock. The trading arrangement was intended to satisfy the affirmative defense in Rule 10b5-1(c). The duration of the trading arrangement was until November 13, 2024, or earlier if all transactions under the trading arrangement are completed. No other officers or directors, as defined in Rule 16a-1(f), adopted and/or terminated a “Rule 10b5-1 trading arrangement” or a “non-Rule 10b5-1 trading arrangement,” as defined in Regulation S-K Item 408, during the last fiscal quarter . Item 9C. Disclosure Regarding Foreign Jurisdiction that Prevent Inspections. Not Applicable. PART III Item 10. Directors, Executive Officers and Corporate Governance The information required by this Item is incorporated herein by reference to the information to be set forth in the Proxy Statement. 119 Table of Contents Item 11. Executive Compensation The information required by this Item is incorporated herein by reference to the information to be set forth in the Proxy Statement. Item 12. Security Ownership of Certain Beneficial Owner and Management and Related Stockholder Matters The information required by this Item is incorporated herein by reference to the information to be set forth in the Proxy Statement. Item 13. Certain Relationships and Related Transactions, and Director Independence The information required by this Item is incorporated herein by reference to the information to be set forth in the Proxy Statement. Item 14. Principal Accounting Fees and Services The information required by this Item is incorporated herein by reference to the information to be set forth in the Proxy Statement. PART IV Item 15. Exhibits and Financial Statements Schedules (a) The following documents are filed as part of this Report: 1. Financial Statements: The information concerning our financial statements, and the report of our independent registered public accounting firm required by this Item is incorporated by reference herein to Item 8. 2. Financial Statement Schedule: All financial statement schedules are omitted because the information called for is not required or is shown either in the consolidated financial statements or in the notes thereto. 3. Exhibits: See Item 15(b) below. We have filed, or incorporated into this Report by reference, the exhibits listed on the accompanying Index to Exhibits in this Item. (b) Exhibits: We have filed, or incorporated into this Report by reference, the exhibits listed on the accompanying Index to Exhibits in this Item. (c) Financial Statement Schedules: See Item 15(a), above. The documents listed below are incorporated by reference or are filed with this Annual Report on Form 10-K, in each case as indicated therein (numbered in accordance with Item 601 of Regulation S-K). EXHIBIT INDEX Exhibit Number Description Filed Herewith Form File No. Exhibit Filing Date 3.1 Amended and Restated Certificate of Incorporation of the registrant 10-Q 001-40257 3.1 May 13, 2021 3.2 Amended and Restated Bylaws of the registrant 10-Q 001-40257 3.1 May 13, 2021 4.1 Description of Capital Stock 10-K 001-40257 4.1 March 9, 2022 10.1+ Form of Indemnification Agreement between the registrant and each of its directors and executive officers S-1/A 333-253134 10.1+ March 16, 2021 10.2+ Outside Director Compensation Policy. S-1/A 333-253134 10.2+ March 16, 2021 10.3+ Form of Incentive Unit Award S-1/A 333-253134 10.3+ March 16, 2021 120 Table of Contents 10.4+ Form of Zero Strike Incentive Unit Award Agreement. S-1/A 333-253134 10.4+ March 16, 2021 10.5+ Form of Incentive Unit Subscription Agreement. S-1/A 333-253134 10.5+ March 16, 2021 10.6+ Form of Zero Strike Incentive Unit Subscription Agreement. S-1/A 333-253134 10.6+ March 16, 2021 10.7+ Form of Announcement of Bonus Award and Bonus Award Agreement. S-1/A 333-253134 10.7+ March 16, 2021 10.8+ Form of Announcement of Bonus Purchase and Bonus Purchase Agreement. S-1/A 333-253134 10.8+ March 16, 2021 10.9+ Cricut, Inc. 2021 Equity Incentive Plan and related form agreements. S-1/A 333-253134 10.9+ March 16, 2021 10.10+ Executive Employment Agreement between the registrant and Ashish Arora, dated as of March 14, 2021. S-1/A 333-253134 10.10+ March 16, 2021 10.11+ Confirmatory Employment Letter between the registrant and Martin F. Petersen, dated as of March 13, 2021. S-1/A 333-253134 10.11+ March 16, 2021 10.12+ Confirmatory Employment Letter between the registrant and Donald B. Olsen, dated as of March 13, 2021. S-1/A 333-253134 10.12+ March 16, 2021 10.13+ Confirmatory Employment Letter between the registrant and Kimball Shill dated as of April 4, 2022 10-Q 001-40257 10.1+ May 11, 2022 10.14+ Separation Agreement and Release between the Company and Martin F. Petersen dated as of September 30, 2022. 10-Q 001-40257 10.2*+ November 9, 2022 10.15 Office Lease, dated as of November 20, 2014, between the registrant and Riverpark Five, LLC. S-1/A 333-253134 10.14 March 16, 2021 10.16 First Amendment to Office Lease, dated as of January 6, 2017, between the registrant and Riverpark Five, LLC. S-1/A 333-253134 10.15 March 16, 2021 10.17 Second Amendment to Office Lease, dated as of January 18, 2018, between the registrant and Riverpark Five, LLC. S-1/A 333-253134 10.16 March 16, 2021 10.18 Amended and Restated Third Amendment to Office Lease, dated as of March 16, 2018, between the registrant and Riverpark Five, LLC. S-1/A 333-253134 10.17 March 16, 2021 10.19 Fourth Amendment to Office Lease, dated as of December 13, 2021, between the registrant and Riverpark Five, LLC. 10-K 001-40257 10.18 March 9, 2022 10.20 Credit Agreement, dated August 4, 2022, by and among the Company, JPMorgan Chase Bank, N.A, as Administrative Agent, and other lenders party thereto. 10-Q 001-40257 10.1* August 10, 2022 10.21 Supply Agreement between the registrant and Xiamen Intretech, Inc., dated August 19, 2018. S-1/A 333-253134 10.19 March 16, 2021 10.22+ Cricut, Inc. 2021 Employee Stock Purchase Plan and related form agreements. S-1/A 333-253134 10.20+ March 16, 2021 10.23+ Executive Incentive Compensation Plan. S-1/A 333-253134 10.21+ March 16, 2021 10.24+ Form of Option Agreement. S-1/A 333-253134 10.22+ March 16, 2021 121 Table of Contents 10.25+ Executive Change in Control and Severance Plan. S-1/A 333-253134 10.23+ March 16, 2021 21.1 List of subsidiaries of the registrant. S-1/A 333-253134 21.1 March 16, 2021 23.1 Consent of BDO USA, P.C. , Independent Registered Public Accounting Firm, as to the registrant. X 31.1 Certification of Principal Executive Officer Pursuant to Rules 13a-14(a) and 15d-14(a) under the Securities Exchange Act of 1934, as Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. X 31.2 Certification of Principal Financial Officer Pursuant to Rules 13a-14(a) and 15d-14(a) under the Securities Exchange Act of 1934, as Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. X 32.1* Certification of Chief Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to section 906 of the Sarbanes-Oxley Act of 2002. X 32.2* Certification of Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to section 906 of the Sarbanes-Oxley Act of 2002. X 97.1 Executive Compensation Recovery Policy X 101 SCH XBRL Taxonomy Extension Schema Document. 101 CAL XBRL Taxonomy Extension Calculation Linkbase Document. 101 DEF Taxonomy Extension Definition Linkbase Document. 101 LAB XBRL Taxonomy Extension Label Linkbase Document. 101 PRE XBRL Taxonomy Extension Presentation Linkbase Document. + Indicates management contract or compensatory plan. * The certifications furnished in Exhibits 32.1 and 32.2 hereto are deemed to accompany this Annual Report on Form 10-K and will not be deemed "filed" for purposes of Section 18 or the Securities Exchange Act of 1934, as amended, except to the extent that the registrant specifically incorporates it by reference. Item 16. Form 10-K Summary None. SIGNATURES Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, as amended, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized. 122 Table of Contents Cricut, Inc. Date: March 5, 2024 By: /s/ Ashish Arora Name: Ashish Arora Title: Chief Executive Officer and Director ( Principal Executive Officer ) KNOW ALL PERSONS BY THESE PRESENTS, that each person whose signature appears below hereby constitutes and appoints Ashish Arora and Kimball Shill and each of them, as his or her true and lawful attorneys-in-fact, proxies, and agents, each 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 Securities and Exchange Commission, granting unto said attorneys-in-fact, proxies, and agents 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 might or could do in person, hereby ratifying and confirming all that said attorneys-in-fact, proxies, and agents, or their or his or her substitute or substitutes, may lawfully do or cause to be done by virtue hereof. Pursuant to the requirements 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. 123 Table of Contents Date: March 5, 2024 By: /s/ Ashish Arora Name: Ashish Arora Title: Chief Executive Officer and Director ( Principal Executive Officer ) Date: March 5, 2024 By: /s/ Kimball Shill Name: Kimball Shill Title: Chief Financial Officer ( Principal Financial Officer ) Date: March 5, 2024 By: /s/ Ryan Harmer Name: Ryan Harmer Title: VP of Accounting, Corporate Controller (Principal Accounting Officer) Date: March 5, 2024 By: /s/ Len Blackwell Name: Len Blackwell Title: Director Date: March 5, 2024 By: /s/ Steven Blasnik Name: Steven Blasnik Title: Director Date: March 5, 2024 By: /s/ Russell Freeman Name: Russell Freeman Title: Director Date: March 5, 2024 By: /s/ Jason Makler Name: Jason Makler Title: Director and Chair of the Board of Directors Date: March 5, 2024 By: /s/ Melissa Reiff Name: Melissa Reiff Title: Director Date: March 5, 2024 By: /s/ Billie Williamson Name: Billie Williamson Title: Director 124