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Item 9A. Controls and Procedures

2024-03-15 compared with 2023-03-16 · 46 added, 49 removed, 137 unchanged (41% of the section changed)

1 unchanged sentence

Evaluation of Disclosure Controls and Procedures

Our management, with the participation of our Chief Executive Officer and Chief Financial Officer, evaluated the effectiveness of our disclosure controls and procedures as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934 (the Exchange Act), as of December 31, 2022.

Based on that evaluation, our Chief Executive Officer and Chief Financial Officer concluded that our disclosure controls and procedures were not effective as of December 31, 2022 due to a material weakness in our internal control over financial reporting, which is described below in “Management’s Report on Internal Control over Financial Reporting”.

Notwithstanding the material weakness in our internal control over financial reporting, our Chief Executive Officer and Chief Financial Officer have concluded that the Consolidated Financial Statements present fairly, in all material respects, our financial position, results of operations and cash flows in accordance with generally accepted accounting principles in the United States of America (U.S.

Our management, with the participation of our Interim Chief Executive Officer and Chief Financial Officer, evaluated the effectiveness of our disclosure controls and procedures as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934 (the Exchange Act), as of December 31, 2023.

Based on that evaluation, our management concluded that our disclosure controls and procedures were not effective as of December 31, 2023 due to a material weakness in our internal control over financial reporting, which is described below.

Management’s Report on Internal Control over Financial Reporting

2 unchanged sentences

Management has assessed the effectiveness of our internal control over financial reporting as of December 31, 2023 based on criteria established in Internal Control — Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission.

Based on this assessment and considering the material weakness described below, management concluded that, as of December 31, 2022, our internal control over financial reporting was not effective.

A material weakness is a deficiency, or 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.

During our fiscal 2022 financial statement close process, management identified a deficiency in the design of internal control over financial reporting related to a complex manual accounting calculation.

An incorrect calculation caused the accrued merchant payable balance to be understated by an immaterial amount, and there is a reasonable possibility our existing controls would not have detected the error in a timely manner if it were to be material.

The error did not affect payments to merchants.

A material weakness exists due to inadequate preventative and detective controls over complex manual calculations used to record certain month-end balances such that there is a reasonable possibility that a material misstatement would not be identified timely.

Our independent registered public accounting firm, Deloitte & Touche LLP, who audited the Consolidated Financial Statements as of and for the year ended December 31, 2022 included in this Annual Report on Form 10-K issued an adverse opinion on the effectiveness of our internal control over financial reporting.

Deloitte & Touche LLP’s report is included herein.

Remediation Plan

With the oversight of senior management and our audit committee, management is in process of designing and implementing the following control activities related to complex manual calculations:

• Formalize a process to identify and address accounting implications for new initiatives.

Based on this assessment, management concluded that our internal control over financial reporting was not effective as of December 31, 2023.

As previously disclosed in our annual report for the year ended December 31, 2022, we identified a material weakness due to inadequate preventative and detective controls over complex manual calculations used to record certain month-end balances.

Management committed to designing and implementing the following control activities related to complex manual calculations:

• Design new controls and enhance existing controls for complex manual processes

• Automate complex accounting calculations to minimize human error

We are committed to maintaining a strong internal control environment and are implementing measures designed to help ensure that the material weakness is remediated.

However, there cannot be any assurance that these remediation efforts will be successful or that our internal control over financial reporting will be effective as a result of these efforts.

The material weakness will be fully remediated when these controls have operated effectively for a sufficient period of time and we have validated the operating effectiveness of these controls through testing.

• Formalize a process to identify and address accounting implications for new initiatives

Management, with the oversight of the audit committee of our Board of Directors, has dedicated resources and efforts to improve our internal controls over financial reporting and has taken action to remediate such material weakness.

Actions include taking steps towards the automation of certain complex accounting calculations, adding detective analytical management review controls, adding controls to reconcile source data across accounts, and enhancing review procedures within account reconciliations.

While the Company has improved its control activities, the material weakness identified in the prior year remains unremediated as of December 31, 2023 and the Company’s remediation efforts will continue to take place in 2024.

The effectiveness of our internal control over financial reporting as of December 31, 2023 has been audited by Deloitte & Touche LLP, an independent registered public accounting firm, as stated in its report below.

This report contains an adverse opinion on the effectiveness of our internal control over financial reporting.

Changes in Internal Control over Financial Reporting

Except for the identification of the material weakness described above, there were no changes in our internal control over financial reporting identified in management’s evaluation pursuant to Rules 13a-15(d) or 15d-15(d) of 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 than described above under “Management’s Report on Internal Control over Financial Reporting", management did not identify changes that occurred in our internal control over financial reporting during the quarter ended December 31, 2023, that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

Limitations on Effectiveness of Controls and Procedures

27 unchanged sentences

The following material weakness has been identified and is included in management's assessment:

During the Company’s fiscal 2022 financial statement close process, management identified a deficiency in the design of internal control over financial reporting related to a complex manual accounting calculation.

An incorrect calculation caused the accrued merchant payable balance to be understated by an immaterial amount, and there is a reasonable possibility the existing controls would not have detected the error in a timely manner if it were to be material.

The error did not affect payments to merchants.

4 unchanged sentences

OTHER INFORMATION

On March 14, 2023, in connection with her retirement from General Motors, Deborah Wahl notified us of her intention to resign as a director, effective March 17, 2023.

The departure of Ms.

Wahl was not the result of any disagreement with us on any matter relating to its operations, policies or practices, and we thank her for her dedicated service to Groupon.

During the year ended December 31, 2023, none of our officers or directors adopted or terminated a "Rule 10b5-1 trading arrangement" or "non-Rule 10b5-1 trading arrangement," as each term is defined in Item 408(a) of Regulation S-K.

DISCLOSURE REGARDING FOREIGN JURISDICTION THAT PREVENT INSPECTIONS

3 unchanged sentences

Information regarding our Audit Committee and its Financial Experts is incorporated by reference from the information under the captions "Board Committees" and "Audit Committee Report" in our 2024 Proxy Statement.

Information regarding our compliance with Section 16(a) of the Exchange Act is incorporated by reference from the information under the caption "Delinquent Section 16(a) Reports" in our 2024 Proxy Statement.

Pursuant to General Instruction G(3) on Form 10-K, information regarding our Executive Officers can be found in Part I of this Annual Report on Form 10-K under the caption "Information About Our Executive Officers."

2 unchanged sentences

Our Code of Conduct is available through our website (www.groupon.com).

Information about the Code of Conduct is incorporated by reference from the information under the caption "Corporate Governance at Groupon" in our 2023 Proxy Statement.

Information about the Code of Conduct is incorporated by reference from the information under the caption "How to Communicate with the Board - Investor Relations Website" in our 2024 Proxy Statement.

We will post any amendment to or waiver from the provisions of the Code of Conduct that applies to the above executive officers on our investor relations website (investor.groupon.com) under the caption "Corporate Governance."

4 unchanged sentences

CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE

Incorporated by reference from the information under the captions "Corporate Governance at Groupon," "Board Independence and Expertise" and "Certain Relationships and Related Party Transactions" in our 2023 Proxy Statement.

Incorporated by reference from the information under the caption "Certain Relationships and Related Party Transactions" in our 2024 Proxy Statement.

PRINCIPAL ACCOUNTANT FEES AND SERVICES

10 unchanged sentences

Consolidated Statements of Comprehensive Income (Loss)

Consolidated Statements of Stockholders' Equity

Consolidated Statements of Stockholders' Equity (Deficit)

Consolidated Statements of Cash Flows

27 unchanged sentences

10.2 Form of Severance Benefit Agreement (incorporated by reference to the Company's Quarterly Report on Form 10-Q for the quarter ended September 30, 2019).**

10.3 Severance Benefit Agreement, dated November 30, 2021 (incorporated by reference to the Company's Current Report on Form 8-K filed on December 1, 2021).**

10.4 Groupon, Inc.

2011 Incentive Plan, as amended (incorporated by reference to Appendix B to the Company's Definitive Proxy Statement on Schedule DEF14A, filed with the SEC on April 27, 2022)**

10.3 Amended and Restated Groupon, Inc.

2011 Incentive Plan (incorporated by reference to Appendix B to the Company's Definitive Proxy Statement on Schedule DEF14A, filed with the SEC on May 1, 2023) .

10.4 Non-Employee Directors’ Compensation Plan (incorporated by reference to the Company's Quarterly Report on Form 10-Q for the quarter ended September 30, 2022).**

10.5 Form of Notice of Restricted Stock Unit Award under 2011 Incentive Plan.**

10.7 Form of Notice of Performance Share Unit Award and Form of performance Share Unit Award Agreement under 2011 Incentive Plan (incorporate d by reference to the Company's Quarterly Report on Form 10-Q for the quarter ended March 31, 2018).**

10.6 Form of Notice of Performance Share Unit Award and Form of performance Share Unit Award Agreement under 2011 Incentive Plan (incorporated by reference to the Company's Quarterly Report on Form 10-Q for the quarter ended March 31, 2018).**

10.7 Form of Capped Call Confirmation (incorporated by reference to the Company’s Current Report on Form 8-K filed on March 25, 2021).

4 unchanged sentences

10.12 Fourth Amendment, dated as of March 13, 2023, among the Company, the subsidiaries of the Company party thereto, JPMorgan Chase Bank, N.A., as Administrative Agent, and the lenders party thereto, to the Second Amended and Restated Credit Agreement, dated as of May 14, 2019 (and as amended by the First Amendment, dated as of July 17, 2020, the Second Amendment, dated as of March 22, 2021 and the Third Amendment, dated as of September 28, 2022), among the Company, JPMorgan Chase Bank, N.A., as Administrative Agent, and the lenders party thereto (incorporated by reference to the Company's Current Report on Form 8-K filed on March 15, 2023).

10.14 Offer letter, dated November 4, 2022 .**

10.15 CEO Offer Letter, dated November 30, 2021 (incorporated by reference to the Company's Current Report on Form 8-K filed on December 1, 2021).**

10.13 Fifth Amendment, dated as of November 7, 2023, among the Company, the subsidiaries of the Company party thereto, JPMorgan Chase Bank, N.A., as Administrative Agent, and the lenders party thereto, to the Second Amended and Restated Credit Agreement, dated as of May 14, 2019 (and as amended by the First Amendment, dated as of July 17, 2020, the Second Amendment, dated as of March 22, 2021, the Third Amendment, dated as of September 28, 2022 and the Fourth Amendment, dated as of March 14, 2023), among the Company, JPMorgan Chase Bank, N.A., as Administrative Agent, and the lenders party thereto (incorporated by reference to the Company's Current Report on Form 8-K filed on November 7, 2023).

10.14 CEO Notice of Grant of Stock Option and Non-qualified Stock Option Agreement, dated March 30, 2023 (incorporated by reference to the Company's Current Report on Form 8-K filed on March 31, 2023)**

10.15 CEO Employmen t Agreement, dated March 30, 2023 (incorporated by reference to the Company's Current R e port on Form 8-K filed on March 31, 2023)**

10.16 CEO Severance Benefit Agreement, dated March 30, 2023 (incorporated by reference to the Company's Current Report on Form 8-K filed on March 31, 2023)**

10.17 Standstill Agreement, dated March 30, 2023 (incorporated by reference to the Company's Current Report on Form 8-K filed on March 31, 2023)

10.18 C FO Employment Agreement, dated A pril 13, 2023 ( incorporated by reference to the C ompany's Current Report on Form 8- K filed on April 13, 2023)**

10.19 C FO Equity Side L etter, dated April 13, 2023 (incorporated by reference to the Company's Current Report on Form 8-K filed on April 13, 2023)**

10.20 C FO Severance Benefit Agreement, dated April 13, 2023 (incorporated by reference to the Company's Current R e port on Form 8-K filed on April 13, 2023)**

10.21 Backstop A greement , d a t ed November 9, 2023 (incorporated by reference to the Company's Current Report on Form 8-K filed on November 13 , 2023) .

19 Groupon, Inc.

Amended and Restated Insider Trading Policy, dated October 19, 2023

21.1 Subsidiaries of Groupon, Inc.

4 unchanged sentences

Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

97 G roupon , Inc.

Clawback Policy

101.INS XBRL Instance Document

12 unchanged sentences

GROUPON, INC.

/s/ KEDAR DESHPANDE

Kedar Deshpande

Chief Executive Officer

/s/ Dusan Senkypl

Dusan Senkypl

Interim Chief Executive Officer

POWER OF ATTORNEY

KNOWN BY ALL PERSONS BY THESE PRESENTS, that the individuals whose signatures appear below hereby constitute and appoint Kedar Deshpande and Damien Schmitz, and each of them severally, as his or her true and lawful attorneys-in-fact and agents 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, full power and authority to do or 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 of his substitute or substitutes, may lawfully do to cause to be done by virtue hereof.

KNOWN BY ALL PERSONS BY THESE PRESENTS, that the individuals whose signatures appear below hereby constitute and appoint Dusan Senkypl and Jiri Ponrt, and each of them severally, as his or her true and lawful attorneys-in-fact and agents 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, full power and authority to do or 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 of his substitute or substitutes, may lawfully do to cause to be done by virtue hereof.

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 indicated as of March 15, 2024.

1 unchanged sentence

Signature Title

/s/ Kedar Deshpande Chief Executive Officer and Director (Principal Executive Officer)

Kedar Deshpande

/s/ Damien Schmitz Chief Financial Officer (Principal Financial Officer)

Damien Schmitz

/s/ Kerrie Dvorak Chief Accounting Officer (Principal Accounting Officer)

Kerrie Dvorak

/s/ Dusan Senkypl

Interim Chief Executive Officer and Director (Principal Executive Officer)

Dusan Senkypl

/s/ Jiri Ponrt

Chief Financial Officer (Principal Financial Officer)

/s/ Kyle Netzly

Chief Accounting Officer (Principal Accounting Officer)

/s/ Theodore J.

3 unchanged sentences

Bass Director

/s/ Eric Lefkofsky Director

Eric Lefkofsky

/s/ Dusan Senkypl Director

Dusan Senkypl

/s/ Deborah Wahl Director

/s/ Helen Vaid Director

/s/ Jason Harinstein

Jason Harinstein

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