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Item 9A. Controls and Procedures

2023-11-16 compared with 2022-11-17 · 40 added, 26 removed, 121 unchanged (35% 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 of October 1, 2022.

Based on that evaluation, the Chief Executive Officer and Chief Financial Officer concluded that, as of October 1, 2022 our disclosure controls and procedures were effective in providing reasonable assurance that the information required to be disclosed by us in reports filed under the Securities Exchange Act of 1934, as amended, is (i) recorded, processed, summarized and reported within the time periods specified in the Securities and Exchange Commission’s rules and forms, and (ii) accumulated and communicated to our management, including the Chief Executive Officer and Chief Financial Officer, as appropriate to allow timely decisions regarding disclosure.

Our management, with the participation of our Chief Executive Officer and Chief Financial Officer, evaluated the effectiveness of our disclosure controls and procedures as of September 30, 2023.

Based on that evaluation, the Chief Executive Officer and Chief Financial Officer concluded that, as of September 30, 2023, our disclosure controls and procedures were effective in providing reasonable assurance that the information required to be disclosed by us in reports filed under the Securities Exchange Act of 1934, as amended, is (i) recorded, processed, summarized and reported within the time periods specified in the Securities and Exchange Commission’s rules and forms, and (ii) accumulated and communicated to our management, including the Chief Executive Officer and Chief Financial Officer, as appropriate to allow timely decisions regarding disclosure.

Management’s Report on Internal Control Over Financial Reporting

The management of Kulicke and Soffa Industries, Inc.

(the “Company”) is responsible for establishing and maintaining adequate internal control over financial reporting as defined in Rule 13a-15(f) and 15d-15(f) of the Securities Exchange Act of 1934, as amended.

The management of the Company is responsible for establishing and maintaining adequate internal control over financial reporting as defined in Rule 13a-15(f) and 15d-15(f) of the Securities Exchange Act of 1934, as amended.

The 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 in the United States of America.

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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.

Management evaluated the effectiveness of the Company’s internal control over financial reporting as of October 1, 2022.

Management evaluated the effectiveness of the Company’s internal control over financial reporting as of September 30, 2023.

In making this assessment, management used the framework established in Internal Control-Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission (“COSO”).

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Management reviewed the results of its assessment with the Audit Committee of the Company’s Board of Directors.

Based on that assessment, management has concluded that, as of October 1, 2022, the Company’s internal control over financial reporting was effective.

The effectiveness of the Company’s internal control over financial reporting as of October 1, 2022 has been audited by PricewaterhouseCoopers LLP, an independent registered public accounting firm, as stated in its report, which appears in Part II, Item 8 of this Form 10-K.

We completed the acquisition of Advanced Jet Automation Co., Ltd.

(“AJA”) on February 22, 2023, as discussed in Note 3:

Business Combination of the Notes to the Consolidated Financial Statements.

On March 30, 2023, AJA was renamed Kulicke and Soffa Hi-Tech Co., Ltd.

(“K&S Hi-Tech”).

Although existing event driven controls were followed related to the business combination accounting for the acquisition, management has excluded K&S Hi-Tech from its assessment of the Company’s internal control over financial reporting for the fiscal year ending September 30, 2023.

As of September 30, 2023, K&S Hi-Tech total assets and total revenues represent less than 1%, respectively, of the related consolidated financial statement amounts as of and for the year ended September 30, 2023.

See Note 3 of our Notes to Consolidated Financial Statements for more information.

This exclusion is in accordance with the SEC’s general guidance that an assessment of a recently acquired business may be omitted from our scope in the first fiscal year in which the acquisition occurred.

Based on that assessment, management has concluded that, as of September 30, 2023, the Company’s internal control over financial reporting was effective.

The effectiveness of the Company’s internal control over financial reporting as of September 30, 2023 has been audited by PricewaterhouseCoopers LLP, an independent registered public accounting firm, as stated in its report, which appears in Part II, Item 8 of this Form 10-K.

Remediation of Previously Disclosed Material Weakness

As described in Part II, Item 9A “Controls and Procedures” of our 2022 Annual Report, we identified a material weakness in our internal control over financial reporting that existed as of October 1, 2022 and which related to a design gap in the existing review of our segment reporting process, which failed to (a) identify all of the key metrics used by the CODM to evaluate performance and allocate resources, (b) assess in totality the level of information provided to and utilized by the CODM to evaluate performance and allocate resources, and (c) appropriately analyze every factor pertinent to whether operating segments share economic similarities that is required for aggregation under ASC 280.

A “material weakness” 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 our annual or interim financial statements will not be prevented or detected on a timely basis.

The Company has implemented remediation steps to address the material weakness and improve our internal control over financial reporting.

Specifically, we have designed and implemented a segment review control which (a) identifies all of the key metrics used by the CODM to evaluate performance and allocate resources, (b) assesses in totality the level of information provided to and utilized by the CODM to evaluate performance and allocate resources, and (c) appropriately analyzes every factor pertinent to whether operating segments share economic similarities that is required for aggregation under ASC 280.

As part of the design and implementation of the segment review control that was completed in the fourth quarter, the Company engaged an outside consultant to assist management on the development of the segment analysis framework.

Testing of both the design and operating effectiveness of the Company’s enhanced controls was completed, and management concluded that the material weakness described above had been fully remediated as of September 30, 2023.

Changes in Internal Control over Financial Reporting

There has been no change in the Company’s internal control over financial reporting during the three months ended October 1, 2022, that has materially affected, or is reasonably likely to materially affect, the Company’s internal control over financial reporting.

Other than the completion remediation actions described above, there has been no change in the Company’s internal control over financial reporting during the three months ended September 30, 2023, that has materially affected, or is reasonably likely to materially affect, the Company’s internal control over financial reporting.

OTHER INFORMATION

Director and Officer Trading Plans and Arrangements

None of the Company’s directors or officers have adopted, modified or terminated a Rule 10b5-1 trading arrangement or a non-Rule 10b5-1 trading arrangement during the Company’s fiscal quarter ended September 30, 2023, as such terms are defined under Item 408(a) of Regulation S-K.

DISCLOSURE REGARDING FOREIGN JURISDICTIONS THAT PREVENT INSPECTIONS

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The other information required by Item 401 of Regulation S-K will appear under the heading “CORPORATE GOVERNANCE” in the Company’s Proxy Statement for the 2024 Annual Meeting of Shareholders, which information is incorporated herein by reference.

The information required by Item 405 of Regulation S-K will appear under the heading “CORPORATE GOVERNANCE—Section 16(a) Beneficial Ownership Reporting Compliance” in the Company’s Proxy Statement for the 2023 Annual Meeting of Shareholders, which information is incorporated herein by reference.

The information required by Item 405 of Regulation S-K will appear, as applicable, under the heading “CORPORATE GOVERNANCE—Section 16(a) Beneficial Ownership Reporting Compliance” in the Company’s Proxy Statement for the 2024 Annual Meeting of Shareholders, which information is incorporated herein by reference.

The information required by Item 406 of Regulation S-K will appear under the heading “CORPORATE GOVERNANCE—Code of Ethics” in the Company’s Proxy Statement for the 2024 Annual Meeting of Shareholders, which information is incorporated herein by reference.

The information required by Item 407(c)(3) of Regulation will appear under the headings “CORPORATE GOVERNANCE—Nominating and Governance Committee” and “Shareholder Proposals” in the Company’s Proxy Statement for the 2023 Annual Meeting of Shareholders, which information is incorporated herein by reference.

The information required by Items 407(d)(4) and (d)(5) of Regulation S-K will appear under the heading “CORPORATE GOVERNANCE—Audit Committee” in the Company’s Proxy Statement for the 2023 Annual Meeting of Shareholders, which information is incorporated herein by reference.

The information required by Item 407(c)(3) of Regulation will appear under the headings “CORPORATE GOVERNANCE—Committees of the Board of Directors—Nominating and Governance Committee” and “Shareholder Proposals” in the Company’s Proxy Statement for the 2024 Annual Meeting of Shareholders, which information is incorporated herein by reference.

The information required by Items 407(d)(4) and (d)(5) of Regulation S-K will appear under the heading “CORPORATE GOVERNANCE—Committees of the Board of Directors—Audit Committee” in the Company’s Proxy Statement for the 2024 Annual Meeting of Shareholders, which information is incorporated herein by reference.

EXECUTIVE COMPENSATION

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(a) The following documents are filed as part of this report:

(1) Financial Statements - Kulicke and Soffa Industries, Inc.:

Report of Independent Registered Public Accounting Firm 36

Consolidated Balance Sheets as of October 1, 2022 and October 2, 2021 38

Consolidated Statements of Operations for fiscal 2022, 2021 and 2020 39

Consolidated Statements of Comprehensive Income for fiscal 2022, 2021 and 2020 40

Consolidated Statements of Changes in Shareholders' Equity for fiscal 2022, 2021 and 2020 41

Consolidated Statements of Cash Flows for fiscal 2022, 2021 and 2020 42

Notes to Consolidated Financial Statements 43

(1) Financial Statements:

See our consolidated financial statements under Item 8

(2) Financial Statement Schedule:

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(2) Sale or scrap of previously reserved inventory.

(3) Reflects the net increase in the valuation allowance primarily associated with the Company’s U.S.

and foreign tax credits, U.S.

and foreign net operating losses and other deferred tax assets.

(4) Reflects the net decrease in the valuation allowance primarily associated with the Company’s utilization of certain foreign net operating losses for which a valuation allowance had previously been recorded, partially offset by an increase for U.S.

(3) Reflects the net decrease in the valuation allowance primarily associated with the Company’s utilization of certain U.S.

and foreign net operating losses for which a valuation allowance had previously been recorded, partially offset by an increase for U.S.

and foreign tax credits, U.S.

and foreign net operating losses and other deferred tax assets.

(5) Reflects the balances relating to foreign tax credits on undistributed foreign earnings and related valuation allowances that have been reclassified in fiscal 2020.

EXHIBIT INDEX

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3.1 The Company's Amended and Restated Articles of Incorporation, dated December 5, 2007, is incorporated herein by reference to Exhibit 3(i) to the Company's Annual Report on Form 10-K for the fiscal year ended September 29, 2007, SEC file number 000-00121.

3.2 The Company's Amended and Restated By-Laws, dated October 22, 2015, is incorporated herein by reference to Exhibit 3(ii) to the Company's Current Report on Form 8-K dated October 22, 2015.

3.2 The Company's Amended and Restated By-Laws, dated October 12 , 20 23 , is incorporated herein by reference to Exhibit 3(i ) to the Company's Current Report on Form 8-K dated October 13 , 20 23 .

4.1 Specimen Common Share Certificate of Kulicke and Soffa Industries Inc., is incorporated herein by reference to Exhibit 4 to the Company's Form-8A12G/A dated September 11, 1995, SEC file number 000-00121.

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Ltd, dated December 1, 2013, is incorporated herein by reference to Exhibit 10.2 to the Company’s Current Report on Form 8-K filed on December 5, 2013.

10.7 Lease Agreement between DBS Trustee Limited, as trustee of Mapletree Industrial Trust, and Kulicke & Soffa Pte.

Ltd, dated October 23, 2023 .

10.8 Form of Officer Indemnification Agreement is incorporated herein by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K filed on December 11, 2013.*

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10.18 Form of Restricted Stock Unit Award Agreement regarding the 2021 Omnibus Incentive Plan.

10.18 Incentive Compensation Plan F iscal Year 2022 .

10.19 Incentive Compensation Plan Fiscal Year 2023 .

10.20 Clawback Policy adopted as of October 12, 2023 .

10.21 Insider Trading Policy .

21.1 Subsidiaries of the Company.

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KONG Director November 16, 2023

/s/ DENISE M.

DIGNAM Director November 16, 2023

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