What changed in this filing

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Item 9A. Controls and Procedures

2023-02-27 compared with 2022-03-16 · 78 added, 46 removed, 134 unchanged (48% of the section changed)

1 unchanged sentence

Disclosure Controls and Procedures

Disclosure controls and procedures, as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended (the “Exchange Act”), are those controls and procedures that are designed to ensure that material information relating to The Hillman Solutions Corp.

required to be disclosed by the Company in 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 that such information is accumulated and communicated to the Company's management, including the chief executive officer and the chief financial officer, as appropriate, to allow timely decisions regarding required disclosure.

2 unchanged sentences

We view our internal control over financial reporting as an integral part of our disclosure controls and procedures.

Management performed additional analysis and other post-closing procedures as of December 25, 2021 and December 26, 2020 and for each of the three years in the period ended December 25, 2021, to ensure the consolidated financial statements were prepared in accordance with accounting principles generally accepted in the United States of America (“U.S.

GAAP”), including reviewing the accounting for deferred tax assets and liabilities.

Management has concluded that, notwithstanding the material weakness described below, the company’s consolidated financial statements in this Form 10-K fairly present, in all material respects, our financial position, results of operations and cash flows as of the dates, and for the periods presented, in conformity with U.S.

Management has concluded that the company’s consolidated financial statements in this Form 10-K fairly present, in all material respects, our financial position, results of operations and cash flows as of the dates, and for the periods presented, in conformity with U.S.

Management's Annual Report on Internal Control Over Financial Reporting.

6 unchanged sentences

Therefore, even those systems determined to be effective can provide only reasonable assurance with respect to financial statement preparation and presentation.

77 | December 31, 2022 Form 10-K

The Company's management has evaluated the effectiveness of the Company's internal control over financial reporting as of December 31, 2022, using the criteria set forth by the Committee of Sponsoring Organizations of the Treadway Commission (COSO) in Internal Control - Integrated Framework (2013 framework).

Based on such evaluation, management concluded that

internal control over financial reporting was effective as of December 25, 2021.

Based on such evaluation, management concluded that internal control over financial reporting was effective as of December 31, 2022.

Management's report on internal control over financial reporting is set forth above under the heading, “Report of Management on Internal Control Over Financial Reporting” in Item 8 of this annual report on Form 10-K.

Remediation of Prior Year Material Weakness

A material weakness, as defined in Exchange Act Rule 12b-2, is a deficiency, or a combination of deficiencies, in internal control over financial reporting, such that there is a reasonable possibility that a material misstatement of the company’s annual or interim financial statements will not be prevented or detected on a timely basis.

In the prior year, management concluded that we did not design and maintain effective controls over the completeness and accuracy of the accounting for, and disclosure of, the valuation allowance against deferred income taxes.

The material weakness resulted in material errors in the application of certain provisions of the Tax Cuts and Jobs Act of 2017 (“2017 Tax Act”) related to the IRC §163(j) interest limitation (Interest Limitation).

In response to the material weakness described above, management implemented changes to its internal control over financial reporting to remediate the control deficiencies that gave rise to the material weakness.

Those changes included the engagement of third party consultants to assist with technical tax accounting research and application of guidance, the addition of a committee to review technical accounting issues and ensure we have the appropriate subject matter experts engaged, and hiring additional personnel in our tax department.

We have tested the newly implemented controls and found them to be effective, and therefore have concluded that as of December 25, 2021, the previously identified material weakness has been remediated.

78 | December 31, 2022 Form 10-K

Attestation Report of Independent Registered Public Accounting Firm on Internal Control Over Financial Reporting.

This annual report does not contain an attestation report of the Company's independent registered public accounting firm regarding internal control over financial reporting.

Management's report was not subject to attestation by the Company's independent registered public accounting firm pursuant to rules of the Commission that permit the Company to provide only management's report in this annual report.

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Shareholders and the Board of Directors of Hillman Solutions Corp.

Opinion on Internal Control over Financial Reporting

We have audited the internal control over financial reporting of Hillman Solutions Corp.

and subsidiaries (the “Company”) as of December 31, 2022, based on criteria established in Internal Control — Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO).

In our opinion, the Company maintained, in all material respects, effective internal control over financial reporting as of December 31, 2022, based on criteria established in Internal Control — Integrated Framework (2013) issued by COSO.

We have also audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the consolidated financial statements as of and for the year ended December 31, 2022, of the Company and our report dated February 27, 2023, expressed an unqualified opinion on those financial statements.

Basis for Opinion

The Company’s management is responsible for maintaining effective internal control over financial reporting and for its assessment of the effectiveness of internal control over financial reporting, included in the accompanying Report of Management on Internal Control Over Financial Reporting.

Our responsibility is to express an opinion on the Company’s internal control over financial reporting based on our audit.

We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S.

federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audit in accordance with the standards of the PCAOB.

Those standards require that we plan and perform the audit to obtain reasonable assurance about whether effective internal control over financial reporting was maintained in all material respects.

Our audit included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, testing and evaluating the design and operating effectiveness of internal control based on the assessed risk, and performing such other procedures as we considered necessary in the circumstances.

We believe that our audit provides a reasonable basis for our opinion.

Definition and Limitations of Internal Control over Financial Reporting

A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles.

A company’s internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company;

(2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company;

and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements.

79 | December 31, 2022 Form 10-K

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements.

Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

/s/ DELOITTE & TOUCHE LLP

Cincinnati, Ohio

February 27, 2023

80 | December 31, 2022 Form 10-K

Changes in Internal Control over Financial Reporting.

Except as described above, there were no changes in the Company's internal control over financial reporting as defined in Rule 13a-15(f) of the Exchange Act of 1934, as amended, that occurred during the quarter ended December 25, 2021, that have materially affected, or are reasonably likely to materially affect, the Company's internal control over financial reporting except as otherwise described above in this Item 9A.

There were no changes in the Company's internal control over financial reporting as defined in Rule 13a-15(f) of the Exchange Act of 1934, as amended, that occurred during the quarter ended December 31, 2022, that have materially affected, or are reasonably likely to materially affect, the Company's internal control over financial reporting except as otherwise described above in this Item 9A.

ITEM 9B – OTHER INFORMATION.

2 unchanged sentences

ITEM 10 – DIRECTORS, EXECUTIVE OFFICERS, AND CORPORATE GOVERNANCE.

Information about our directors and officers may be found under the captions “Election of Directors” and “Directors and Executive Officers” in our Proxy Statement for the Annual Meeting of Stockholders' to be held June 14, 2022 (the “2022 Proxy Statement”).

Information about our directors and officers may be found under the captions “Election of Directors” and “Directors and Executive Officers” in our Proxy Statement for the 2023 Annual Meeting of Stockholders (the “2023 Proxy Statement”).

Information about our Audit Committee may be found under the caption “Committees of the Board of Directors” in the Proxy Statement.

1 unchanged sentence

We have adopted a code of ethics that applies to all of our employees, including our Chief Executive Officer, Chief Financial Officer, Chief Accounting Officer, and other finance organization employees.

The code of ethics is publicly available on our website at www.hillmangroup.com If we make any substantive amendments to the code of ethics or grant any waiver, including any implicit waiver, from a provision of the code to our Chief Executive Officer, Chief Financial Officer, or Chief Accounting Officer, we will disclose the nature of the amendment or waiver on that website or in a report on Form 8-K.

The code of ethics is publicly available on our website at www.hillmangroup.com.

If we make any substantive amendments to the code of ethics or grant any waiver, including any implicit waiver, from a provision of the code to our Chief Executive Officer, Chief Financial Officer, or Chief Accounting Officer, we will disclose the nature of the amendment or waiver on that website or in a report on Form 8-K.

ITEM 11 – EXECUTIVE COMPENSATION.

The information required by this Item is set forth in the sections entitled Compensation Discussion and Analysis, Compensation Committee Report, and Compensation Tables in the 2023 Proxy Statement and is hereby incorporated by reference into this Form 10-K.

81 | December 31, 2022 Form 10-K

ITEM 12 – SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS.

The following table provides information regarding shares outstanding and available for issuance under our existing equity

compensation plans.

The following table provides information regarding shares outstanding and available for issuance under our existing equity compensation plans.

Equity Compensation Plan Information

7 unchanged sentences

ITEM 14 – PRINCIPAL ACCOUNTING FEES AND SERVICES.

Our independent registered public accounting firm is KPMG, LLP , Cincinnati, OH , Auditor Firm ID:

Our independent registered public accounting firm is Deloitte & Touche LLP , Cincinnati, OH , Auditor Firm ID:

The information required by this Item is set forth in the section entitled Ratification of the Appointment of Hillman’s Independent Auditor in the 2023 Proxy Statement and is hereby incorporated by reference into this Form 10-K.

1 unchanged sentence

(a) Documents Filed as a Part of the Report:

82 | December 31, 2022 Form 10-K

Financial Statements:

16 unchanged sentences

(incorporated by reference to Exhibit 3.2 of the Company’s Current Report on Form 8-K, filed with the SEC on July 20, 2021).

4.1 Description of the Company’s Registered Securities (filed herewith).

4.1 Description of the Company’s Registered Securities (incorporated by reference to Exhibit 4 .1 of the Company’s Annual Report on Form 10-K, filed with the SEC on March 16, 2022).

10.1 Form of Subscription Agreement, dated January 24, 2021, by and between Landcadia Holdings III, Inc.

5 unchanged sentences

10.3* Hillman Solutions Corp.

2021 Equity Incentive Plan, dated July 14, 2021 (filed herewith).

2021 Equity Incentive Plan, dated July 14, 2021 (incorporated by reference to Exhibit 10.3 of the Company’s Annual Report on Form 10-K, filed with the SEC on March 16, 2022).

10.4* Form of Indemnification Agreement (incorporated by reference to Exhibit 10.5 of the Company’s Current Report on Form 8-K, filed with the SEC on July 20, 2021).

10.5* Hillman Solutions Corp.

2021 Employee Stock Purchase Plan (filed herewith).

2021 Employee Stock Purchase Plan (incorporated by reference to Exhibit 10.5 of the Company’s Annual Report on Form 10-K, filed with the SEC on March 16, 2022).

10.6* Hillman Solutions Corp.

8 unchanged sentences

2021 Equity Incentive Plan (incorporated by reference to Exhibit 10.12 of the Company’s Current Report on Form 8-K, filed with the SEC on July 20, 2021)

10.11* Form of Restricted Stock Unit Award Agreement for Non-Employee Directors under the Hillman Solutions Corp.

2021 Equity Incentive Plan (filed herewith) .

10.12* Employment Agreement between Robert Kraft and The Hillman Group, Inc., dated October 2, 2017 (incorporated by reference to Exhibit 10.1 of The Hillman Companies, Inc.’s Current Report on Form 8-K, filed with the SEC on October 6, 2017).

2 unchanged sentences

10.14* Employment Agreement between Randall Fagundo and The Hillman Group, Inc., dated August 10, 2018 (incorporated by reference to Exhibit 10.13 of The Hillman Companies, Inc.’s Annual Report on Form 10-K, filed with the SEC on March 28, 2019).

83 | December 31, 2022 Form 10-K

10.15* Employment Agreement between George Murphy and The Hillman Group, Inc., dated October 1, 2018 (incorporated by reference to Exhibit 10.14 of The Hillman Companies, Inc.’s Annual Report on Form 10-K, filed with the SEC on March 27, 2020).

10.15* Employment Agreement between Jarrod Streng and The Hillman Group, Inc., dated October 1, 2018 (incorporated by reference to Exhibit 10.15 of The Hillman Companies, Inc.’s Annual Report on Form 10-K, filed with the SEC on March 27, 2020).

10.16* Employment Agreement between Scott Ride and The Hillman Group Canada ULC., dated December 2, 2014, (incorporated by reference to Exhibit 10.5 of The Hillman Companies, Inc.’s Current Report on Form 8-K filed with the SEC on May 4, 2017).

10.17* Amendment to Employment Agreement between Scott Ride and The Hillman Group Canada ULC., dated June 10, 2015 (incorporated by reference to Exhibit 10.12 of The Hillman Companies, Inc.’s Annual Report on Form 10-K filed with the SEC on March 21, 2018)

10.18* Employment Agreement between Gary Seeds and The Hillman Group, Inc., dated April 21, 2010, as amended by that certain Amendment to Employment Agreement, dated June 10, 2015 (filed herewith).

10.18* Employment Agreement between Gary Seeds and The Hillman Group, Inc., dated April 21, 2010, as amended by that certain Amendment to Employment Agreement, dated June 10, 2015 (incorporated by reference to Exhibit 10.18 of the Company’s Annual Report on Form 10-K, filed with the SEC on March 16, 2022).

10.19+ ABL Credit Agreement, dated as of May 31, 2018, by and among The Hillman Group, Inc., The Hillman Companies, Inc., The Hillman Group Canada ULC, the Lenders and Issuing Banks from time to time party thereto, Barclays Bank PLC, as administrative agent and swingline lender, Jefferies Finance LLC, Citizens Bank, N.A.

4 unchanged sentences

2 to the ABL Credit Agreement, dated as of July 14, 2021, by and among Hillman Investment Company, The Hillman Group, Inc., The Hillman Group Canada ULC, the Subsidiary Guarantors, the Lenders listed on the signature pages thereto and Barclays Bank PLC, in its capacity as administrative agent for the Lenders (incorporated by reference to Exhibit 10.21 of the Company’s Current Report on Form 8-K, filed with the SEC on July 20, 2021).

10.22+ Amendment No.

3 to the ABL Credit Agreement, dated as of July 29, 2022, by and among The Hillman Companies, Inc., The Hillman Group, Inc., The Hillman Group Canada ULC, the Subsidiary Guarantors, the Lenders listed on the signature pages thereto and Barclays Bank PLC, in its capacity as administrative agent for the Lenders (incorporated by reference to Exhibit 10.1 of the Company’s Quarterly Report on Form 10-Q, filed with the SEC on August 3, 2022).

10.23+ Credit Agreement, dated as of July 14, 2021, by and among The Hillman Group, Inc., Hillman Investment Company, the Lenders from time to time party thereto, Jefferies Finance LLC, as administrative agent, and Jefferies Finance LLC and Barclays Bank PLC, as joint lead arrangers and joint bookrunners (incorporated by reference to Exhibit 10.22 of the Company’s Current Report on Form 8-K, filed with the SEC on July 20, 2021).

4 unchanged sentences

10.26* Form of Notice to the Holders of Stock Options Under the HMAN Group Holdings, Inc.

2014 Equity Incentive Plan, dated July 15, 2021 (filed herewith).

2014 Equity Incentive Plan, dated July 15, 2021 (incorporated by reference to Exhibit 10.25 of the Company’s Annual Report on Form 10-K, filed with the SEC on March 16, 2022).

10.27* Form of HMAN Group Holdings, Inc.

2014 Equity Incentive Plan Restricted Stock Unit Award Agreement (filed herewith)

2014 Equity Incentive Plan Restricted Stock Unit Award Agreement (incorporated by reference to Exhibit 10.26 of the Company’s Annual Report on Form 10-K, filed with the SEC on March 16, 2022)

10.28* Form of Notice to the Holders of Restricted Stock Units Under the HMAN Group Holdings, Inc.

2014 Equity Incentive Plan, dated July 15, 2021 (filed herewith).

2014 Equity Incentive Plan, dated July 15, 2021 (incorporated by reference to Exhibit 10.27 of the Company’s Annual Report on Form 10-K, filed with the SEC on March 16, 2022).

10.29* Form of HMAN Group Holdings, Inc.

2014 Equity Incentive Plan Restricted Stock Award Agreement (filed herewith).

2014 Equity Incentive Plan Restricted Stock Award Agreement (incorporated by reference to Exhibit 10.28 of the Company’s Annual Report on Form 10-K, filed with the SEC on March 16, 2022).

10.30* Form of Notice to the Holders of Restricted Stock Under the HMAN Group Holdings, Inc.

2014 Equity Incentive Plan, dated July 15, 2021 (filed herewith).

2014 Equity Incentive Plan, dated July 15, 2021 (incorporated by reference to Exhibit 10.29 of the Company’s Annual Report on Form 10-K, filed with the SEC on March 16, 2022).

10.31* The Hillman Companies, Inc.

2 unchanged sentences

Nonqualified Deferred Compensation Plan (incorporated by reference to Exhibit 10.2 of The Hillman Companies, Inc.’s Quarterly Report on Form 10-Q, filed with the SEC on November 15, 2004) .

21.1 List of Subsidiaries ( f iled herewith) .

10.33* Hillman Solutions Corp.

Non-Employee Director Deferred Compensation Program, adopted December 12, 2022, with respect to the Hillman Solutions Corp.

2021 Equity Incentive Plan.

(filed herewith) .

84 | December 31, 2022 Form 10-K

21.1 List of Subsidiaries (filed herewith).

(As of December 31 , 202 2 ) .

23.1 Consent of KPMG LLP, independent registered accounting firm for the Company (filed herewith).

23.1 Consent of Deloitte & Touche LLP, independent registered accounting firm for the Company (filed herewith).

23.2 Consent of KMPG LLP, prior year independent registered accounting firm for the Company (filed herewith) .

31.1 Certification of Chief Executive Officer pursuant to Rule 13a-14(a) or 15d-14(a) under the Exchange Act (filed herewith).

10 unchanged sentences

The Company agrees to furnish a copy of all omitted exhibits and schedules to the SEC upon its request.

85 | December 31, 2022 Form 10-K

ITEM 16 – FORM 10-K SUMMARY.

1 unchanged sentence

THE HILLMAN SOLUTIONS CORP.

March 16, 2022 By:

February 27, 2023 By:

/s/ Robert O.

3 unchanged sentences

/s/ Douglas J.

Cahill Principal Executive Officer, Chairman and Director March 16, 2022

Cahill Principal Executive Officer, Chairman and Director February 27, 2023

/s/ Robert O.

Kraft Principal Financial Officer March 16, 2022

McCalla Chief Accounting Officer March 16, 2022

/s/ Diana Dowling Director March 16, 2022

Kraft Principal Financial Officer February 27, 2023

McCalla Chief Accounting Officer February 27, 2023

/s/ Diana Dowling Director February 27, 2023

Diana Dowling

/s/ Teresa S.

Gendron Director March 16, 2022

Jagdfeld Director March 16, 2022

/s/ Daniel O'Leary Director March 16, 2022

Gendron Director February 27, 2023

Jagdfeld Director February 27, 2023

/s/ Daniel O'Leary Director February 27, 2023

Daniel O'Leary

Owens Director March 16, 2022

Owens Director February 27, 2023

/s/ Joseph M.

Scharfenberger, Jr.

Director March 16, 2022

Director February 27, 2023

Scharfenberger, Jr.

/s/ John Swygert Director March 16, 2022

/s/ John Swygert Director February 27, 2023

/s/ Philip K.

Woodlief Director March 16, 2022

Woodlief Director February 27, 2023

/s/ Richard F.

Zannino Director March 2, 2022

Zannino Director February 27, 2023

86 | December 31, 2022 Form 10-K

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