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Item 9A. Controls and Procedures

2025-03-14 compared with 2024-03-04 · 95 added, 102 removed, 100 unchanged (66% of the section changed)

4 unchanged sentences

Based on that evaluation, the Chief Executive Officer and Chief Financial Officer concluded that our disclosure controls and procedures were effective as of December 31, 2024 .

Remediation of Previously Reported Material Weakness

As previously reported in Part II, Item 9A.

“Controls and Procedures” in our Annual Report on Form 10-K for the year ended December 31, 2022, our management identified control deficiencies that aggregated to a material weakness in the Company’s internal control over financial reporting as of December 31, 2022 .

This material weakness related to the Company’s previously disclosed review of certain transactions related to its subsidiary WildHealth, which was acquired in February 2022, and primarily included a combination of ineffective operation of controls and inadequate controls in certain areas along with formal review, approval and evaluation of manual journal entries.

Our management has concluded that the material weakness did not result in any material misstatements to our previously issued financial statements, nor in the financial statements issued during the year 2023 included in this Form 10-K.

The Company continues to be committed to maintaining a strong internal control environment.

In response to the identified material weakness above, management, with the oversight of the Audit Committee of the Board of Directors, has taken comprehensive actions to remediate the material weakness in internal control over financial reporting.

During the year ended December 31, 2023, we took the following steps to remediate the material weakness discussed above:

• re-evaluated the scope, level of precision and the personnel assigned for review and approval of manual journal entries;

• developed a formal policy related to journal entries and implemented IT system enhancements allowing proper segregation of duties in our journal entry process;

• enhanced procedures for formal review, approval, and evaluation of non-core, complex transactions as well as engagement with government agencies;

• enhanced operational processes and procedures for segregation of duties between accounting and contracting approval functions for non-core, complex transactions.

For the year ended December 31, 2023, we completed our testing of the operating effectiveness of the implemented controls and procedures and determined that they were effective.

As a result, we have concluded the material weakness identified above has been remediated as of December 31, 2023.

Management’s Annual Report on Internal Control over Financial Reporting

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Based on that assessment, our management, including the Chief Executive Officer and Chief Financial Officer, concluded that, as of December 31, 2024, our internal control over financial reporting was effective.

The effectiveness of the internal control over financial reporting as of December 31, 2023 has been audited by BDO USA, P.C., an independent registered public accounting firm, as stated in their report, which appears in Part II, Item 8 of this Annual Report on Form 10-K.

This Annual Report on Form 10-K does not include an attestation report of the Company’s independent registered public accounting firm regarding the effectiveness of the Company’s internal control over financial reporting, as such report is not required due to the Company’s status as a non-accelerated filer.

Limitations of the Effectiveness of Internal Control

2 unchanged sentences

Changes in Internal Control Over Financial Reporting

Except for the remediation of the material weakness, there have been no changes in the Company’s internal control over financial reporting during the quarter ended December 31, 2023, identified in connection with the evaluation thereof by our management, including the Chief Executive Officer and Chief Financial Officer, that have materially affected, or are reasonably likely to materially affect, the Company’s internal control over financial reporting.

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Board of Directors and Stockholders

LivePerson, Inc.

New York, New York

Opinion on Internal Control over Financial Reporting

We have audited LivePerson, Inc.

(the “Company’s”) 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 (the “COSO criteria”).

In our opinion, the Company maintained, in all material respects, effective internal control over financial reporting as of December 31, 2023, based on the COSO criteria .

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (“PCAOB”), the consolidated balance sheets of the Company as of December 31, 2023 and 2022, the related consolidated statements of operations, comprehensive loss, stockholders’ equity, and cash flows for each of the three years in the period ended December 31, 2023, and the related notes and our report dated March 4, 2024 expressed an unqualified opinion thereon.

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 Item 9A, Management’s Report 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 U.S.

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

We conducted our audit of internal control over financial reporting 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, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk.

Our audit also included 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.

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/ BDO USA, P.C.

New York, New York

March 4, 2024

There have been no changes in the Company’s internal control over financial reporting during the quarter ended December 31, 2024 , identified in connection with the evaluation thereof by our management, including the Chief Executive Officer and Chief Financial Officer, that have materially affected, or are reasonably likely to materially affect, the Company’s internal control over financial reporting.

Other Information

(b) During the three months ended December 31, 2023, no director or executive 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 Regulations S-K.

(b) During the three months ended December 31, 2024, no director or executive 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 Regulations S-K, except as disclosed below:

Trading Arrangement

Officer Name Title

Date of Adoption/Termination

Trading Arrangement End Date

Aggregate Number of Securities to be Purchased or Sold

Vanessa Pegueros

Director 11/20/2024 Yes 11/14/2025 30,000 shares of common stock

Disclosure Regarding Foreign Jurisdictions that Prevent Inspections

5 unchanged sentences

Our Code of Ethics is available at:

www.liveperson.com under “Investor Relations / Corporate Governance.” The Company’s website address provided above is not intended to function as a hyperlink, and the information on the Company’s website is not and should not be considered part of this Annual Report on Form 10-K and is not incorporated by reference herein.

The Company will post on this website any amendments to our Code of Ethics.

www.liveperson.com under “Investor Relations / Governance / Governance overview.” The Company’s website address provided above is not intended to function as a hyperlink, and the information on the Company’s website is not and should not be considered part of this Annual Report on Form 10-K and is not incorporated by reference herein.

The Company will post on this website any amendments to this Code of Ethics.

Additionally, we have adopted an Insider Trading and Disclosure Policy governing the purchase, sale, or other disposition of the Company’s securities.

This policy applies to our directors, officers, and employees.

The Insider Trading and Disclosure Policy is designed to promote compliance with insider trading laws, rules and regulations and listing standards.

It is the Company’s policy to comply with applicable insider trading laws and regulations, including with respect to transactions in our own securities.

Executive Compensation

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Director March 14, 2025

/s/ Bruce Hansen

Director March 4, 2024

/s/ Vanessa Pegueros Director March 14, 2025

2 unchanged sentences

Director March 14, 2025

/s/ Karin-Joyce (K.J.) Tjon

Director March 14, 2025

/s/ Yael Zhang Director March 4, 2024

Karin-Joyce (K.J.) Tjon

/s/ Dan Fletcher

Director March 14, 2025

EXHIBIT INDEX

Number Description

3.1(a) Fourth Amended and Restated Certificate of Incorporation (incorporated by reference to the Exhibit 3.1 to LivePerson’s Annual Report on Form 10-K for the year ended December 31, 2000 and filed March 30, 2001 (File No.

3.1(b) Certificate of Amendment to the Fourth Amended and Restated Certificate of Incorporation effective as of November 12, 2019 (incorporated by reference to Exhibit 4.2 to LivePerson’s Registration Statement on Form S-8 filed on November 13, 2019 (File No.

3.2 Third Amended and Restated By-Laws of LivePerson, Inc., as amended (incorporated by reference to Exhibit 3.1 to LivePerson’s Current Report on Form 8-K filed on June 12, 2023 (File No.

3.2 Third Amended and Restated By-Laws of LivePerson, Inc., as amended (incorporated by reference to Exhibit 3.1 to LivePerson’s Current Report on Form 8-K filed on June 12, 2023 )

3.3 Certificate of Designations of the Series A Junior Participating Preferred Stock of the Company, dated January 22, 2024 (incorporated by reference to Exhibit 3.1 to LivePerson’s Current Report on Form 8-K filed on January 22, 2024)

4.1 Specimen common stock certificate (incorporated by reference to Exhibit 4.1 to LivePerson’s Registration Statement on Form S-1/A filed on March 28, 2000 (Registration No.

333-9 5 689))

4.2 Second Amended and Restated Registration Rights Agreement, dated as of January 27, 2000, by and among LivePerson, the several persons and entities named on the signature pages thereto as Investors, and Robert LoCascio (incorporated by reference to Exhibit 4.2 to LivePerson’s Registration Statement on Form S-1/A filed on March 10, 2000 (Registration No.

333-9 5 689))

4.3 Indenture, dated as of March 4, 2019, by and between LivePerson, Inc.

Bank National Association, as Trustee (incorporated by reference to Exhibit 4.1 to LivePerson’s Current Report on Form 8-K filed on March 5, 2019 (File No.

4.4 Form of 0.750% Convertible Senior Notes due 2024 (included within the Indenture filed as Exhibit 4.3 hereto)

4.5 Description of the Registrant’s Securities Registered Pursuant to Section 12 of the Securities Exchange Act of 1934 (incorporated by reference to Exhibit 4.5 to LivePerson’s Annual Report on Form 10-K for the year ended December 31, 2020 and filed on March 8, 2021 (File No.

4.1 Specimen common stock certificate (incorporated by reference to Exhibit 4.1 to LivePerson’s Registration Statement on Form S-1/A filed on March 28, 2000 )

4.3 Description of the Registrant’s Securities Registered Pursuant to Section 12 of the Securities Exchange Act of 1934 (incorporated by reference to Exhibit 4.

3 to LivePerson’s Annual Report on Form 10-K /A for the year ended December 31, 2023 and filed on April 29, 2024 )

4.4 Indenture, dated as of December 4, 2020, by and between LivePerson, Inc.

Bank National Association, as Trustee (incorporated by reference to Exhibit 4.1 to LivePerson’s Current Report on Form 8-K/A filed on December 10, 2020 (File No.

4.7 Form of 0% Convertible Senior Notes due 2026 (included within the Indenture filed as Exhibit 4.6 hereto)

Bank National Association, as Trustee (incorporated by reference to Exhibit 4.1 to LivePerson’s Current Report on Form 8-K/A filed on December 10, 2020 )

4.5 Form of 0% Convertible Senior Note due 2026 (included within the Indenture filed as Exhibit 4.

Tax Benefits Preservation Plan, dated as of January 22, 2024, by and between the Company and Equiniti Trust Company, LLC as rights agent (which includes the Form of Rights Certificate as Exhibit B thereto) (incorporated by reference to Exhibit 4.1 to LivePerson’s Current Form 8-K filed on January 22, 2024)

1 unchanged sentence

and Equiniti Trust Company, LLC (incorporated by reference to Exhibit 4.1 to LivePerson’s Current Form 8-K filed on February 16, 2024)

10.1(a)* 2009 Stock Incentive Plan (incorporated by reference to Exhibit 99.1 to LivePerson’s Registration Statement on Form S-8 filed on June 9, 2009 (File No.

10.1(b)* 2009 Stock Incentive Plan (amended and restated as of June 7, 2012) (incorporated by reference to Exhibit 99.1 to LivePerson’s Current Report on Form 8-K filed on June 8, 2012 (File No.

10.1(c)* Forms of Grant Agreements under the 2009 Stock Incentive Plan (incorporated by reference to Exhibit 10.1 to LivePerson’s Quarterly Report on Form 10-Q filed on May 6, 2011 (File No.

10.1(d)* Form of Restricted Stock Unit Award Agreement under the 2009 Stock Incentive Plan (incorporated by reference to Exhibit 10.12 to LivePerson’s Annual Report on Form 10-K for the year ended December 31, 2017, filed on March 15, 2018 (File No.

10.2* Form of Indemnification Agreement entered into with Executive Officers and Directors of LivePerson (incorporated by reference to Exhibit 10.6 to LivePerson’s Annual Report on Form 10-K for the year ended December 31, 2011, filed March 13, 2012 (File No.

Indenture, dated as of June 3, 2024, by and between LivePerson, Inc., the subsidiary guarantors party thereto and U.S.

Bank Trust Company, National Association, as Trustee and as Collateral Agent (incorporated by reference to Exhibit 4.1 to LivePerson’s Current Report on Form 8-K filed on June 4, 2024)

Form of Senior Secured Convertible Note due 2029 (included within the Indenture filed as Exhibit 4.

4.10 Warrant to Purchase Common Stock issued by LivePerson, Inc.

on June 3, 2024 to Lynrock Lake Master Fund LP (incorporated by reference to Exhibit 4.3 to LivePerson’s Current Report on Form 8-K filed on June 4, 2024)

4.11 Warrant issued by LivePerson, Inc.

on June 3, 2024 to Lynrock Lake Master Fund LP (incorporated by reference to Exhibit 4.4 to LivePerson’s Current Report on Form 8-K filed on June 4, 2024)

4.12 Exchange and Purchase Agreement, dated as of May 13, 2024, by and between LivePerson, Inc.

and Lynrock Lake Master Fund LP (incorporated by reference to Exhibit 10.1 to LivePerson’s Current Report on Form 8-K filed on May 13, 2024)

4.13 First Amendment to Exchange and Purchase Agreement, dated as of June 3, 2024, by and between LivePerson, Inc.

and Lynrock Lake Master Fund LP (incorporated by reference to Exhibit 10.1 to LivePerson’s Current Report on Form 8-K filed on June 4, 2024)

Supplemental Indenture No.

1, dated as of August 15, 2024, by and between LivePerson, Inc., the subsidiary guarantors party thereto and U.S.