What changed in this filing

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Item 9A. Controls and Procedures

2024-02-22 compared with 2023-02-21 · 53 added, 22 removed, 168 unchanged (31% of the section changed)

Controls and Procedures.

Limitations on Effectiveness of Controls and Procedures

Our management does not expect that our disclosure controls and procedures or our internal control over financial reporting will prevent all errors and all fraud.

A control system, no matter how well designed and operated, can provide only reasonable, not absolute, assurance that the 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 our Company have been detected.

Evaluation of Disclosure Controls and Procedures

Our management, with the participation of our principal executive officer and our 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 Securities Exchange Act of 1934, as amended (the “Exchange Act”), as of the end of the period covered by this Annual Report on Form 10-K.

Our management, including our principal executive officer and our 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 Securities Exchange Act of 1934, as amended (the “Exchange Act”), as of the end of the period covered by this Annual Report on Form 10-K.

Based on that evaluation, our principal executive officer and principal financial officer have 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 we are required to disclose in reports that we file or submit under the Exchange Act is recorded, processed, summarized, and reported within the time periods specified in SEC rules and forms, and that such information is accumulated and communicated to our management, including our principal executive officer and principal financial officer, as appropriate, to allow timely decisions regarding required disclosure.

2 unchanged sentences

Internal control over financial reporting is a process designed under the supervision and with the participation of our management, including our principal executive officer and principal financial officer, 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 in the United States of America.

The Company acquired Zynerba on October 10, 2023.

SEC guidance permits companies to exclude certain acquisitions from the assessment of internal control over financial reporting during the first year following acquisition.

Accordingly, management has excluded Zynerba from its assessment of the effectiveness of the Company’s internal control over financial reporting as of December 31, 2023.

Zynerba represents approximately 8% and 0% of total assets and net product revenue, respectively, of the consolidated financial statement amounts as of and for the year ended December 31, 2023.

Our independent registered public accounting firm, Deloitte & Touche LLP, has issued an attestation report on our internal control over financial reporting that is included in this Annual Report on Form 10-K.

5 unchanged sentences

Opinion on Internal Control over Financial Reporting

We have audited the internal control over financial reporting of Harmony Biosciences, Inc.

and subsidiary (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 21, 2023, expressed an unqualified opinion on those financial statements and included an explanatory paragraph regarding the Company’s adoption of a new accounting standard.

We have audited the internal control over financial reporting of Harmony Biosciences Holdings, Inc., and subsidiaries (the “Company”) 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 (COSO).

In our opinion, the Company

maintained, in all material respects, effective internal control over financial reporting as of December 31, 2023, based on criteria established in Internal Control — Integrated Framework (2013) issued by COSO.

As described in Management’s Annual Report on Internal Control over Financial Reporting, management excluded from its assessment the internal control over financial reporting at Zynerba Pharmaceuticals, Inc., which was acquired on October 10, 2023, and whose financial statements constitute 8% of total assets and 0% of net product revenue of the consolidated financial statement amounts as of and for the year ended December 31, 2023.

Accordingly, our audit did not include the internal control over financial reporting at Zynerba Pharmaceuticals, Inc.

Basis for Opinion

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/s/ Deloitte & Touche LLP

Chicago, Illinois

Philadelphia, PA

February 22, 2024

1 unchanged sentence

There were no changes 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

Our management does not expect that our disclosure controls and procedures or our internal control over financial reporting will prevent all errors and all fraud.

A control system, no matter how well designed and operated, can provide only reasonable, not absolute, assurance that the 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.

Other Information.

During the quarter ended December 31, 2023, no director or officer of the Company 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.

Disclosures Regarding Foreign Jurisdictions that Prevent Inspections.

15 unchanged sentences

The Proxy Statement will be filed with the SEC within 120 days of the fiscal year ended December 31, 2023.

Principal Accounting Fees and Services.

Principal Accountant Fees and Services.

The information required by this item will be set forth in our Proxy Statement for the 2024 Annual Meeting of Stockholders and is incorporated herein by reference.

11 unchanged sentences

Exhibit Description

Agreement and Plan of Merger, dated August 14, 2023, by and among Harmony Biosciences Holdings, Inc., Xylophone Acquisition Corp.

and Zynerba Pharmaceuticals, Inc.

September 14, 2023

Amended and Restated Certificate of Incorporation of Harmony Biosciences Holdings, Inc.

13 unchanged sentences

2020 Incentive Award Plan, as amended by the First Amendment to the Plan, dated March 24, 2022.

February 21, 2023

Form of Option Agreement under Harmony Biosciences Holdings, Inc.

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Acknowledgment and Release Agreement, dated January 20, 2023, by and between Harmony Biosciences Holdings, Inc.

February 21, 2023

Form of Indemnification Agreement between Harmony Biosciences, LLC and each director and executive officer.

12 unchanged sentences

and Jeffrey M.

January 23, 2023

Executive Employment Agreement, dated April 24, 2023, between Harmony Biosciences, LLC and Jeffrey M.

April 24, 2023

Offer Letter, dated September 8, 2017, by and between Harmony Biosciences, LLC and Andrew Serafin.

15 unchanged sentences

March 25, 2021

Confidential Separation Agreement and General Release, between Harmony Biosciences, LLC and Susan L.

Drexler, dated March 4, 2021.

March 10, 2021

Employment Agreement, dated March 4, 2021, between Harmony Biosciences, LLC and Sandip Kapadia.

2 unchanged sentences

August 10, 2021

Restricted Stock Unit Award Agreement dated October 4, 2023 with Sandip Kapadia

October 5, 2023

Restricted Stock Unit Award Agreement dated October 4, 2023 with Jeffrey Dierks

October 5, 2023

Credit Agreement, dated as of July 26, 2023, by an among JPMorgan Chase Bank, N.A., as administrative agent, and the lenders from time to time party thereto.

July 27, 2023

Guaranty, dated July 26, 2023, by and among each of the subsidiaries of Harmony Biosciences Holdings, Inc.

and JPMorgan Chase Bank, N.A., as administrative agent.

July 27, 2023

Pledge and Security Agreement, dated July 26, 2023, by and among Harmony Biosciences Holdings, Inc.

and each of the subsidiaries of Harmony Biosciences Holdings, Inc., and JPMorgan Chase Bank, N.A., as administrative agent.

July 27, 2023

First Incremental Amendment dated September 21, 2023 by and among Harmony Biosciences Holdings, Inc., JPMorgan Chase Bank, N.A., as

September 25, 2023

administrative agent, and Bank of America, N.A., as incremental lender.

List of Subsidiaries of Harmony Biosciences Holdings, Inc.

6 unchanged sentences

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

Policy Relating to Recovery of Erroneously Awarded Compensation

The following financial statements from the Company’s Yearly Report on Form 10-K for the fiscal year ended December 31, 2023 formatted in Inline XBRL:

(i) Balance Sheets, (ii) Statements of Operations, (iii) Statements of Convertible Preferred Stock and Stockholders’ Equity (Deficit) and (vi) Notes to Financial Statements, tagged as blocks of text and including detailed tags.

(i) Balance Sheets, (ii) Statements of Operations, (iii) Statements of Stockholders’ Equity (Deficit) and (vi) Notes to Financial Statements, tagged as blocks of text and including detailed tags.

Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101)

Indicates management contract or compensatory plan or arrangement.

This certification is deemed furnished, and not filed, with the Securities and Exchange Commission and is not to be incorporated by reference into any filing of Harmony Biosciences Holdings, Inc.

This certification is deemed furnished, and not filed, with the SEC and is not to be incorporated by reference into any filing of Harmony Biosciences Holdings, Inc.

under the Securities Act of 1933, as amended, or the Securities Exchange Act of 1934, as amended, whether made before or after the date of this Annual Report on Form 10-K, irrespective of any general incorporation language contained in such filing.

Certain portions of this document that constitute confidential information have been redacted in accordance with Regulation S-K, Item 601(b)(10)

Certain portions of this document that the Company customarily and actually treats as private or confidential and is not material have been redacted in accordance with Regulation S-K, Item 601(b)(10)

Form 10-K Summary.

2 unchanged sentences

/s/ Jeffrey M.

Interim Chief Executive Officer

President, Chief Executive Officer and Director (principal executive officer)

February 22, 2024

1 unchanged sentence

/s/ Jeffrey M.

Interim Chief Executive Officer

President, Chief Executive Officer and Director

February 22, 2024

1 unchanged sentence

/s/ Sandip Kapadia

Chief Financial Officer (Principal

Chief Financial Officer and Chief Administrative Officer (Principal

February 22, 2024

2 unchanged sentences

/s/ Jeffrey S.

Executive Chairman of the Board

Chairman of the Board

February 22, 2024

/s/ Peter Anastasiou

February 22, 2024

Peter Anastasiou

/s/ Antonio Gracias

14 unchanged sentences

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