Item 9A. Controls and Procedures
Item 9A. Controls and Procedures
Limitations on effectiveness of controls and procedures
In designing and evaluating our disclosure controls and procedures, management recognizes that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving the desired control objectives. In addition, the design of disclosure controls and procedures must reflect the fact that there are resource constraints and that management is required to apply judgment in evaluating the benefits of possible controls and procedures relative to their costs.
Evaluation of Disclosure Controls and Procedures
Our management, with the participation of our principal executive officer and principal financial officer, has evaluated the effectiveness of 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 such evaluation, our principal executive officer and principal financial officer have concluded that as of December 31, 2022, our disclosure controls and procedures were not effective as a result of material weaknesses in our internal control over financial reporting as described below.
Management’s 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 Rule 13a-15(f) under the Exchange Act.
Under the supervision of and with the participation of our principal executive officer and principal financial officer, our management assessed the effectiveness of our internal control over financial reporting as of December 31, 2022 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 this assessment, management concluded that our internal control over financial reporting was not effective as of December 31, 2022 due to the existence of the material weaknesses described below.
In connection with the preparation of the financial statements for this Annual Report on Form 10-K, we identified a material weakness in our internal control over financial reporting as of December 31, 2022. The material weakness identified related to certain information technology general controls (“ITGCs”) that support certain of the Company’s solution organizations’ revenue processes which were found to be not operating effectively. As a result, certain of the Company’s related information technology-dependent manual and application controls that rely upon the affected ITGCs, or information coming from information technology (“IT”) systems with affected ITGCs, for continued operation were also deemed ineffective. We have concluded that the material weakness arose due to acquired IT infrastructure. The material weakness did not result in any identified misstatements to our consolidated financial statements or changes to previously disclosed financial results.
Our independent registered public accounting firm will not be required to opine on the effectiveness of our internal control over financial reporting pursuant to Section 404 until we are no longer an “emerging growth company” as defined in the JOBS Act.
Remediation Efforts to Address Material Weakness
To remediate the material weakness described above, we plan to improve the performance of our ITGCs by enhancing our training for ITGC owners regarding their roles and responsibilities. We are also working with the application owners to bolster the systems and improve our documentation supporting the related ITGCs.
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Changes in Internal Control
Other than the remediation efforts described above, there have been no changes in internal control over financial reporting during the quarter ended December 31, 2022 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.
Item 9B. Other Information
None.
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
Code of Ethics
Our board of directors has adopted a written Code of Conduct and Ethics applicable to all officers, directors and employees, including our principal executive officer, principal financial officer, principal accounting officer and controller, or persons performing similar functions. We have posted a current copy of our Code of Conduct and Ethics on our Investor Relations website at investors.evercommerce.com. We intend to satisfy the disclosure requirement under Item 5.05 of Form 8-K regarding amendment to, or waiver from, a provision of our Code of Business Conduct and Ethics, as well as Nasdaq’s requirement to disclose waivers with respect to directors and executive officers, by posting such information on our website at the address specified above. The information contained on our website is not incorporated by reference into this Annual Report on Form 10-K.
Executive Officers and Directors
Information about our Executive Officers and Directors
The following table sets forth the name, age and position(s) of each of our executive officers and directors as of March 15, 2023:
Name Age Position(s) with EverCommerce Principal Employment
Executive Officers
Eric Remer (1)
51 Chief Executive Officer and Director Same
Matthew Feierstein 50 President Same
Marc Thompson 58 Chief Financial Officer Same
Chris Alaimo 55 Chief Technology Officer Same
Sarah Jordan 38 Chief Marketing Officer Same
Shane Driggers 47 Chief Human Resource Officer Same
Lisa Storey 41 General Counsel Same
Non-Employee Directors
Penny Baldwin-Leonard (3)
65 Director Former SVP and Chief Marketing Officer of Qualcomm Incorporated
Kimberly Ellison-Taylor (2)
52 Director Chief Executive Officer of KET Solutions, LLC
Mark Hastings (3)
55 Director Chief Executive Officer of PSG Equity L.L.C.
John Marquis (1)
35 Director Managing Director of PSG Equity L.L.C.
Joseph Osnoss (3)
45 Director Managing Partner of Silver Lake
John Rudella 51 Director Director of Silver Lake
Richard A. Simonson (2)
64 Director Managing Partner of Specie Mesa L.L.C.
Debby Soo (1)
42 Director Chief Executive Officer of OpenTable, Inc.
(1) Member of the Nominating and Corporate Governance Committee
(2) Member of the Audit Committee
(3) Member of the Compensation Committee
The remainder of the information required to be disclosed by this Item 10 will be included in our definitive proxy statement to be filed with the SEC with respect to our 2023 Annual Meeting of Stockholders and is incorporated
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herein by reference .
Item 11. Executive Compensation
The information required by this Item 11 will be included in our definitive proxy statement to be filed with the SEC with respect to our 2023 Annual Meeting of Stockholders 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 12 will be included in our definitive proxy statement to be filed with the SEC with respect to our 2023 Annual Meeting of Stockholders and is incorporated herein by reference.
Item 13. Certain Relationships and Related Transactions, and Director Independence
The information required by this Item 13 will be included in our definitive proxy statement to be filed with the SEC with respect to our 2023 Annual Meeting of Stockholders and is incorporated herein by reference.
Item 14. Principal Accounting Fees and Services
The information required by this Item 14 will be included in our definitive proxy statement to be filed with the SEC with respect to our 2023 Annual Meeting of Stockholders and is incorporated herein by reference.
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PART IV
Item 15. Exhibits and Financial Statement Schedules
Financial Statements
The following consolidated financial statements are included in Part II, Item 8. of this Annual Report on Form 10‑K:
Index to Consolidated Financial Statements Page
Report of Independent Registered Public Accounting Firm (PCAOB ID 00 42 )
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Consolidated Balance Sheets as of December 31, 2022 and 2021
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Consolidated Statements of Operations and Comprehensive Loss for the years ended December 31, 2022, 2021 and 2020
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Consolidated Statements of Convertible Preferred Stock and Stockholders’ Equity (Deficit) for the years ended December 31, 2022, 2021 and 2020
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Consolidated Statements of Cash Flows for the years ended December 31, 2022, 2021 and 2020
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Notes to Consolidated Financial Statements III- 34
Financial Statement Schedules
All financial statement schedules have been omitted because they are not applicable, not material or because the information required is already included in the consolidated financial statements or the notes thereto.
Exhibits
The following is a list of exhibits filed as part of this Annual Report on Form 10‑K or are incorporated herein by reference, in each case as indicated below.
Incorporated by Reference Filed/
Exhibit
Number Exhibit Description Form File No. Exhibit Filing
Date Furnished
Herewith
3.1 Amended and Restated Certificate of Incorporation of EverCommerce Inc
8-K 001-40575 3.1 7/9/21
3.2 Amended and Restated Bylaws of EverCommerce Inc
8-K 001-40575 3.2 7/9/21
4.1 Form of Certificate of Common Stock
S-1/A 333-256641 4.1 6/23/21
4.2 Registration Rights Agreement by and between EverCommerce Inc. and certain security holders of EverCommerce Inc., dated May 7, 2021
S-1 333-256641 4.3 5/28/21
4.3 Sponsor Stockholders Agreement, dated as of June 30, 2021
8-K 001-40575 10.1 7/9/21
4.4 Management Stockholders Agreement, dated as of June 30, 2021
8-K 001-40575 10.2 7/9/21
4.5 Description of Capital Stock
10-K 001-40575 4.5 3/15/2022
10.1# Form of Indemnification Agreement between EverCommerce Inc. and its directors and officers
S-1/A 333-256641 10.1 6/23/21
10.2# Amended & Restated 2016 Equity Incentive Plan and related form agreements thereunder
S-1/A 333-256641 10.2 6/23/21
10.3# Amended and Restated Restricted Stock Award Agreement by and between the Company and Eric Remer, dated as of August 23, 2019, as amended
S-1/A 333-256641 10.3 6/23/21
10.4# Amended and Restated Restricted Stock Award Agreement by and between the Company and Matt Feierstein, dated as of August 23, 2019, as amended
S-1/A 333-256641 10.4 6/23/21
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10.5# Amended and Restated Restricted Stock Award Agreement by and between the Company and Marc Thompson, dated as of August 23, 2019, as amended
S-1/A 333-256641 10.5 6/23/21
10.6# EverCommerce Inc. 2021 Incentive Award Plan
S-1/A 333-256641 10.6 6/23/21
10.7# Form of RSU Agreement under the EverCommerce Inc. 2021 Incentive Award Plan
S-1/A 333-256641 10.6.1 6/23/21
10.8# Form of Option Agreement under the EverCommerce Inc. 2021 Incentive Award Plan
S-1/A 333-256641 10.6.2 6/23/21
10.9# EverCommerce Inc. 2021 Employee Stock Purchase Plan
S-1/A 333-256641 10.7 6/23/21
10.10# EverCommerce Inc. Non-Employee Director Compensation Policy
S-1/A 333-256641 10.8 6/23/21
10.11# Employment Agreement by and between the Company and Eric Remer, dated July 1, 2021
10-K 001-40575 10.11# 3/15/22
10.12# Employment Agreement by and between the Company and Matthew Feierstein, dated July 1, 2021
10-K 001-40575 10.12# 3/15/22
10.13# Employment Agreement by and between the Company and Marc Thompson, dated July 1, 2021
10-K 001-40575 10.13# 3/15/22
10.14# PaySimple, Inc. 2008 Equity Incentive Plan
S-8 333-268321 99.3 11/14/22
10.15 Credit Agreement, dated July 6, 2021
8-K 001-40575 10.3 7/9/21
10.16.1 Amendment No. 1, dated as of November 23, 2021, to the Credit Agreement, dated as of July 6, 2021, among EverCommerce Intermediate Inc., EverCommerce Solutions Inc., Royal Bank of Canada, as administrative agent and collateral agent, and the other parties and lenders party thereto
8-K 001-40575 10.1 11/23/21
10.17 Collateral Agreement, dated July 6, 2021
8-K 001-40575 10.4 7/9/21
10.18 Guarantee Agreement, dated July 6, 2021
8-K 001-40575 10.5 7/9/21
10.19^ Office Lease by and among EverCommerce Solutions Inc. and BCSP RINO Property LLC, dated June 13, 2019
S-1 333-256641 10.13 5/28/21
21.1 List of Subsidiaries of the Registrant
*
23.1 Consent of Ernst & Young LLP
*
31.1 Certification of Chief Executive Officer pursuant to Rule 13a-14(a)/15d-14(a)
*
31.2 Certification of Chief Financial Officer pursuant to Rule 13a-14(a)/15d-14(a)
*
32.1 Certification of Chief Executive Officer pursuant to 18 U.S.C. Section 1350
**
32.2 Certification of Chief Financial Officer pursuant to 18 U.S.C. Section 1350
**
101.INS Inline 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 Inline XBRL Taxonomy Extension Schema Document *
101.CAL Inline XBRL Taxonomy Extension Calculation Linkbase Document *
101.DEF Inline XBRL Taxonomy Extension Definition Linkbase Document *
101.LAB Inline XBRL Taxonomy Extension Label Linkbase Document *
101.PRE Inline XBRL Taxonomy Extension Presentation Linkbase Document *
104 Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101) *
* Filed herewith.
** Furnished herewith.
# Denotes management contract or compensatory plan
^ Portions of the exhibit have been omitted as permitted under Item 601(b)(10)(iv) of Regulation S-K.
Item 16. Form 10-K Summary
None.
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SIGNATURES
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.
EVERCOMMERCE INC.
Date: March 15, 2023
By: /s/ Marc Thompson
Marc Thompson
Chief Financial Officer
(Principal Financial Officer)
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 in the capacities and on the dates indicated.
Signatures Title Date
/s/ Eric Remer Director and Chief Executive Officer (Principal Executive Officer) March 15, 2023
Eric Remer
/s/ Marc Thompson Chief Financial Officer (Principal Financial Officer) March 15, 2023
Marc Thompson
/s/ Lee Dabberdt Chief Accounting Officer (Principal Accounting Officer) March 15, 2023
Lee Dabberdt
/s/ Penny Baldwin-Leonard Director March 15, 2023
Penny Baldwin-Leonard
/s/ Kimberly Ellison-Taylor Director March 15, 2023
Kimberly Ellison-Taylor
/s/ Mark Hastings Director March 15, 2023
Mark Hastings
/s/ John Marquis Director March 15, 2023
John Marquis
/s/ Joseph Osnoss Director March 15, 2023
Joseph Osnoss
/s/ John Rudella Director March 15, 2023
John Rudella
/s/ Richard A. Simonson Director March 15, 2023
Richard A. Simonson
/s/ Debby Soo Director March 15, 2023
Debby Soo