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Item 9A. Controls and Procedures

2022-03-14 compared with 2021-03-16 · 9 added, 55 removed, 113 unchanged (36% of the section changed)

5 unchanged sentences

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

Our internal control over financial reporting is a process designed by, or under the supervision of, our President and Chief Executive Officer and our

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Executive Vice President, Chief Financial Officer and Treasurer, and effected by the Company’s board of directors, management and other personnel 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.

Our internal control over financial reporting is a process designed by, or under the supervision of, our President and Chief Executive Officer and our Executive Vice President, Chief Financial Officer and Treasurer, and effected by the Company’s board of directors, management and other personnel 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.

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

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Changes in Internal Control over Financial Reporting

During the quarter ended December 31, 2019, we identified material weaknesses with our internal controls related to the accounting and financial reporting for income taxes.

As a consequence, process level controls over the completeness, existence, accuracy, valuation and presentation of the income tax provision, including deferred tax assets and liabilities and valuation allowance, were not effective.

Based on the material weaknesses described above, management concluded that, as of December 31, 2019, our internal control over financial reporting were ineffective.

In connection with the preparation of the annual consolidated financial statements as of and for the year ended December 31, 2020, management designed and implemented effective internal controls surrounding the preparation of the income tax provision including engaging a third party accounting firm to assist with the documentation of these enhanced processes and controls including:

• Accelerate the risk assessment process related to changes in the business;

• Enhance the design of controls surrounding the preparation and review of the income tax provision, and enhance the automation of the income tax processes and controls to allow for a timelier completion and review of internal controls;

• Accelerate all key activities within the income tax accounting and reporting process and controls by further increasing and expanding the capabilities of the income tax accounting resources in order to devote additional time and resources to the consolidated income tax accounting and reporting processes and controls.

We have determined that the actions taken to date have sufficiently improved the Company’s internal control over financial reporting such that as of December 31, 2020, there is not 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.

Based on the remediation of the material weaknesses identified, we concluded that our internal control over financial reporting was effective as of December 31, 2020.

Other than the changes noted above, there has been no change in our internal control over financial reporting during the quarter ended December 31, 2020, that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

There has been no change in our internal control over financial reporting during the quarter ended December 31, 2021, that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

Other Information

Disclosure Regarding Foreign Jurisdictions that Prevent Inspections

DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE

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Certain of the information concerning our executive officers required by this Item 10 is provided under the caption “Executive Officers of the Registrant” in Part I of this Annual Report.

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SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS

The information required by Item 12 regarding Security Ownership of Certain Beneficial Owners and Management and Related Stockholders is incorporated by reference to the relevant information to be included in our definitive proxy statement related to the 2021 annual shareholders meeting.

Equity Compensation Plan Information

The following table provides certain information as of December 31, 2020 concerning the shares of our common stock that may be issued under existing equity compensation plans.

Plan Category Number of Securities

to be Issued Upon

Outstanding Options

Weighted Average

Exercise Price of

Outstanding Options

Number of Securities

Remaining Available for

Future Issuance Under

Equity Compensation Plans

(in thousands, except exercise price)

Equity Compensation Plans Approved by Security Holders (1)

5 $ 22.35 1,787

Equity Compensation Plans Not Approved by Security Holders — — —

Total 5 $ 22.35 1,787

________________________________________

(1) Includes the Company’s 2009 Long-Term Incentive Plan and 2016 Long-Term Incentive Plan.

There are no awards outstanding as of December 31, 2020 under the Company's 2007 Stock Option Plan.

The information required by Item 12 is incorporated by reference to the relevant information to be included in our definitive proxy statement related to the 2022 annual shareholders meeting.

CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE

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(1) The following financial statements are filed herewith in Item 8 of Part II above:

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Report of independent registered public accounting firm

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All other schedules are omitted because of the absence of conditions under which they are required or because the required information is given in the financial statements or notes thereto.

2.1 Membership Interest Purchase Agreement, dated December 15, 2017, among Mistras Group, Inc., WPT Holdings Inc., West Penn Non-Destructive Testing, LLC (formerly known as West Penn Non-Destructive Testing, Inc.), N.

David Campbell and James C.

DeChellis III (filed as exhibit 2.1 to the Current Report on Form 8-K filed on December 21, 2017 and incorporated herein by reference)

2.2 Share Purchase Agreement, dated as of December 13, 2018, among 2159562 Alberta Ltd., as purchaser, Mistras Group, Inc., as parent of purchaser, the shareholders of Onstream Holdings, Inc.

listed in Schedule A thereto, and Onstream Holdings, Inc.

(filed as Exhibit 2.1 to the Current Report on Form 8-K filed December 13, 2018 and incorporated herein by reference)

2.3 Form of share purchase agreement for the purchase of Onstream Holdings, Inc.

shares from each member of the group of shareholders collectively owning 5% of the shares of Onstream Holdings, Inc.

(filed as Exhibit 2.2 to the Current Report on Form 8-K filed December 13, 2018 and incorporated herein by reference)

3.1 Second Amended and Restated Certificate of Incorporation (filed as exhibit 3.1 to Registration Statement on Form S-1 (Amendment No.

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10.2 First Amendment, dated October 11, 2019, to Fifth Amended and Restated Credit Agreement dated December 13, 2018 (filed as Exhibit 10.3 to the Annual Report on Form 10-K filed March 27, 2020 and incorporated herein by reference)

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10.3 Second Amendment, dated March 9, 2020, to Fifth Amended and Restated Credit Agreement dated December 13, 2018 (filed as Exhibit 10.1 to the Current Report on Form 8-K filed March 13, 2020 and incorporated herein by reference

10.4 Third Amendment, dated May 15, 2020, to Fifth Amended and Restated Credit Agreement dated December 13, 2018 (filed as Exhibit 10.1 to the Current Report on Form 8-K filed May 15, 2020 and incorporated herein by reference

10.5 Fourth Amendment, dated February 11, 2021, to the Fifth Amended and Restated Credit Agreement (filed as Exhibit 10.1 to the Quarterly Report on Form 10-Q filed May 7, 2021 and incorporated herein by reference)

10.6 Fifth Amendment, date May 19, 2021, to the Fifth Amended and Restated Credit Agreement (filed as Exhibit 10.1 to Current Report on Form 8-K, filed May 20, 2021 and incorporated herein by reference)

10.7 Settlement Agreement, dated October 5, 2021, regarding the settlement of the two legal proceedings captioned Price v.

Mistras Group, Inc .

(filed as Exhibit 10.1 to the Quarterly Report on Form 10-Q filed November 3, 2021 and incorporated herein by reference)

10.8 Form of Indemnification Agreement for directors and officers (filed as exhibit 10.1 to the Registration Statement on Form S-1 (Amendment No.

1 unchanged sentence

333-151559) and incorporated herein by reference)

10.6 2009 Long-Term Incentive Plan (filed as exhibit 10.6 to the Registration Statement on Form S-1 (Amendment No.

4) filed on September 21, 2009 (Registration No.

333-151559) and incorporated herein by reference)

10.7 Form of 2009 Long-Term Incentive Plan Stock Option Agreement (filed as exhibit 10.7 to the Registration Statement on Form S-1 (Amendment No.

4) filed on September 21, 2009 (Registration No.

333-151559) and incorporated herein by reference)

10.9* Mistras Group, Inc.

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32.1** Certification pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

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32.2** Certification pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

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FORM 10-K SUMMARY

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Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

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Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the Registrant and in the capacities and on the dates indicated.

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Signature Title Date

19 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