Koppers Holdings Inc. 10-Q

ITEM 1. LEGAL PROCEEDINGS The information set forth in Note 18 to the Condensed Consolidated Financial Statements of Koppers Holdings Inc. included in Item 1 of Part I of this report is incorporated herein by reference. Koppers Holdings Inc. (the “Company”) has been cooperating with an investigation by the staff of the Division of Enforcement (the “Division”) of the U.S. Securities and Exchange Commission (“Commission”) into the Company’s public non-GAAP financial metrics disclosures regarding the Company’s debt reduction target and net leverage ratio for Fiscal Year 2019 and the related management of its accounts payable (the “Inquiry”). The Company and several of its current and former officers and employees received subpoenas for information and testimony (the “Subpoenas”), pursuant to a non-public formal order of investigation for the Inquiry dated February 14, 2021. On November 1, 2022, the Commission announced that it had agreed to accept Koppers’ Offer of Settlement and, pursuant to that settlement, entered an order making findings, which Koppers neither admits nor denies, that Koppers violated Section 17(a)(3) of the Securities Act of 1933, Section 13(a) of the Securities Exchange Act of 1934 and related rules, and Rule 100(b) of Regulation G when it negligently failed to explain in its non-GAAP disclosures in the Company’s 2019 earnings releases, that it was delaying the payment of its non-critical vendors in order to meet its 2019 net debt reduction and net leverage ratio targets and that its short-term debt would increase in the next period. The Commission’s order acknowledges that the Company cooperated with its staff’s investigation and promptly undertook remedial acts, including strengthening policies and procedures relating to its accounts payables and its non-GAAP disclosures, and requires that the Company cease and desist from future violations and pay a civil monetary penalty of $1.3 million. No current or former officers or employees of the Company were the subject of any enforcement action in connection with this matter. The Company does not anticipate that the resolution of the SEC’s investigation will have any material impact on its operations or its current or any prior period financial statements. ITEM 1A. RISK FACTORS There have been no material changes to the Risk Factors previously disclosed in Item 1A of our Annual Report on Form 10-K for the year ended December 31, 2021. 33 ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS Not applicable. ITEM 3. DEFAULTS UPON SENIOR SECURITIES Not applicable. ITEM 4. MINE SAFETY DISCLOSURES Not applicable.