Item 9A. Controls and Procedures
Item 9A. Controls and Procedures.
Evaluation of disclosure controls and procedures.
Our management, with the participation of our management team, including our Chief Executive Officer (CEO) and Chief Financial Officer (CFO) evaluated the effectiveness of the design and operation of our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act) as of December 31, 2023.
Based on this evaluation, our CEO and CFO concluded that, our disclosure controls and procedures were effective at the reasonable assurance level as of December 31, 2023.
Management’s Annual Report on Internal Control Over Financial Reporting
This Annual Report on Form 10-K includes a report of management’s assessment regarding internal control over financial reporting (as defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act). This Annual Report on Form 10-K does not include an attestation report of our independent registered public accounting firm because, as a “smaller reporting company”, and non-accelerated filer, our independent registered public accounting firm is not required to issue such an attestation report.
The following report is provided by management in respect of our internal control over financial reporting:
Our management is responsible for establishing and maintaining adequate internal control over financial reporting. Our management used the Committee of Sponsoring Organizations of the Treadway Commission’s Internal Control - Integrated Framework (2013), or the COSO framework, to evaluate the effectiveness of internal control over financial reporting. Management believes that the COSO framework is a suitable framework for its evaluation of financial
64
Table of Contents
reporting because it is free from bias, permits reasonably consistent qualitative and quantitative measurements of our internal control over financial reporting, is sufficiently complete so that those relevant factors that would alter a conclusion about the effectiveness of our internal control over financial reporting are not omitted and is relevant to an evaluation of internal control over financial reporting. Management has assessed the effectiveness of our internal control over financial reporting as of December 31, 2023, and has concluded that such internal control over financial reporting was effective.
Changes in internal control over financial reporting.
There have been no changes in our internal control over financial reporting that occurred during the year ended December 31, 2023, that materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.
Inherent limitation on the effectiveness of internal control.
The effectiveness of any system of internal control over financial reporting, including ours, is subject to inherent limitations, including the exercise of judgment in designing, implementing, operating, and evaluating the controls and procedures, and the inability to eliminate misconduct completely. Accordingly, any system of internal control over financial reporting, including ours, no matter how well designed and operated, can only provide reasonable, not absolute assurances. In addition, 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. We intend to continue to monitor and upgrade our internal controls as necessary or appropriate for our business, but cannot assure you that such improvements will be sufficient to provide us with effective internal control over financial reporting.
Item 9B. Other Informatio n.
Trading Arrangements of Directors and Executive Officers.
None of our directors or executive officers adopted , modified, or terminated a Rule 10b5-1 trading arrangement or a non-Rule 10b5-1 trading arrangement (as defined under Item 408(a) of Regulation S-K) during the quarter ended December 31, 2023.
Election of a Director.
On February 26, 2024, Douglas Mitchell was elected as a member of our board of directors. Mr. Mitchell was appointed to serve on our Nominating and Corporate Governance Committee, effective immediately. There is no arrangement or understanding between Mr. Mitchell and any other person pursuant to which he was selected as a director. Mr. Mitchell does not have any direct or indirect material interest in any transaction required to be disclosed pursuant to Item 404(a) of Regulation S-K. We will enter into our standard indemnification and standard non-disclosure agreement with Mr. Mitchell.
Mr. Mitchell will participate in our non-employee director compensation program. In connection with Mr. Mitchell’s election to our board of directors, Mr. Mitchell will be granted an initial RSU award with a grant value of $250,000, which will vest 50% on each of the first and second anniversary from the date of grant. Mr. Mitchell will also receive an annual cash retainer of $55,000 for his service on our board of directors.
Item 9C. Disclosure Regarding Foreign Jurisdictions that Prevent Inspections.
Not applicable.
65
Table of Contents
PART III
Item 10. Directors, Executive Officers and Corporate Governance.
Information required by this item will be contained in our definitive proxy statement to be filed with the SEC on Schedule 14A in connection with our 2024 Annual Meeting of Stockholders, or the Proxy Statement, which will be filed not later than 120 days after the end of our fiscal year ended December 31, 2023, under the headings “Management,” “Proposal 1 - Election of Directors,” “Board Committees and Meetings,” and, to the extent applicable, “Delinquent Section 16(a) Reports,” and is incorporated herein by reference.
We have adopted a Code of Business Conduct and Ethics that applies to our officers, directors and employees which is available on our website at www.everspin.com. The Code of Business Conduct and Ethics is intended to qualify as a “code of ethics” within the meaning of Section 406 of the Sarbanes-Oxley Act of 2002 and Item 406 of Regulation S-K. In addition, we intend to promptly disclose (1) the nature of any substantive amendment to our Code of Business Conduct and Ethics that applies to our principal executive officer, principal financial officer, principal accounting officer or controller or persons performing similar functions and (2) the nature of any waiver, including an implicit waiver, from a provision of our code of ethics that is granted to one of these specified officers, the name of such person who is granted the waiver and the date of the waiver, on our website in the future.
Item 11. Executive Compensatio n.
The information required by this item regarding executive compensation is incorporated by reference to the information set forth in the sections titled “Executive Compensation” and “Compensation of Non-Employee Board Members” in our Proxy Statement.
Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters.
The information required by this item regarding security ownership of certain beneficial owners and management is incorporated by reference to the information set forth in the sections titled “Security Ownership of Certain Beneficial Owners and Management” and “Securities Authorized for Issuance Under Equity Compensation Plans” in our Proxy Statement.
Item 13. Certain Relationships and Relate d Transactions, and Director Independence.
The information required by this item regarding certain relationships and related transactions and director independence is incorporated by reference to the information set forth in the sections titled “Certain Relationships and Related Party Transactions” and “Corporate Governance”, respectively, in our Proxy Statement.
Item 14. Principal Accountant Fees and Services.
The information required by this item regarding principal accountant fees and services is incorporated by reference to the information set forth in the section titled “Principal Accountant Fees and Services” in our Proxy Statement.
66
Table of Contents
PART IV
Item 15. Exhibit s and Financial Statement Schedules.
(a) The following documents are filed as part of this report:
1. Financial Statements
Information in response to this Item is included in Part II, Item 8 of this Annual Report on Form 10-K.
2. Financial Statement Schedules
All schedules are omitted because they are not applicable or the required information is shown in the financial statements or notes thereto.
3. Exhibits
67
Table of Contents
EXHIBIT INDEX
Incorporation By Reference
Exhibit
Number
Description
Form
SEC File No.
Exhibit
Filing Date
3.1
Amended and Restated Certificate of Incorporation.
8-K
001-37900
3.1
10/13/2016
3.1.1
Amendment to Amended and Restated Certificate of Incorporation.
8-K
001-37900
3.1
5/22/2019
3.1.2
Amendment to Amended and Restated Certificate of Incorporation.
8-K
001-37900
3.1
5/27/2020
3.1.3
Amendment to Amended and Restated Certificate of Incorporation
8-K
001-37900
3.1
5/25/2023
3.2
Amended and Restated Bylaws.
8-K
001-37900
3.2
5/22/2019
4.1
Form of Common Stock Certificate of the registrant.
S-1
333-213569
4.1
9/09/2016
4.2
Amended and Restated Warrant to Purchase Common Stock, dated as of August 5, 2019, between the registrant and Silicon Valley Bank.
10-Q
001-37900
4.2
11/08/2019
4.3
W arrant to Purchase Common Stock, dated as of July 15, 2020, between the registrant and Silicon Valley Bank.
10-Q
001-37900
4.3
8/06/2020
4.4
Description of Common Stock.
10-K
001-37900
4.4
3/04/2021
10.1 †
Form of Indemnity Agreement between the registrant and its directors and officers.
S-1
333-213569
10.1
9/09/2016
10.2 †
2008 Equity Incentive Plan, as amended, and Form of Stock Option Grant Notice, Option Agreement and Form of Notice of Exercise.
S-1/A
333-213569
10.2
9/26/2016
10.3 †
Amended and Restated 2016 Equity Incentive Plan.
8-K
001-37900
10.1
5/22/2018
10.3.1 †
First Amendment to the Amended and Restated 2016 Equity Incentive Plan.
8-K
001-37900
10.1
5/25/2021
10.4 †
Form of Stock Option Grant Notice, Option Agreement and Form of Notice of Exercise used with the 2016 Equity Incentive Plan.
S-1/A
333-213569
10.3
9/26/2016
10.5 †
Form of Restricted Stock Unit Award Agreement under the 2016 Equity Incentive Plan .
10-Q
001-37900
10.3
11/13/2017
68
Table of Contents
10.6 †
2016 Employee Stock Purchase Plan.
S-1/A
333-213569
10.4
9/26/2016
10.7
Lease, dated as of June 6, 2008, by and between the registrant and Freescale Semiconductor, Inc.
S-1
333-213569
10.5
9/09/2016
10.7.1
Amendment No. 1 to Lease, dated as of February 2, 2009, by and between the registrant and Freescale Semiconductor, Inc.
S-1
333-213569
10.6
9/09/2016
10.7.2
Amendment No. 2 to Lease, dated as of February 18, 2010, by and between the registrant and Freescale Semiconductor, Inc.
S-1
333-213569
10.7
9/09/2016
10.7.3
Amendment No. 3 to Lease, dated as of July 20, 2011, by and between the registrant and Freescale Semiconductor, Inc.
S-1
333-213569
10.8
9/09/2016
10.7.4
Amendment No. 4 to Lease, dated as of June, 2014 by and between the registrant and Freescale Semiconductor, Inc.
S-1
333-213569
10.9
9/09/2016
10.7.5
Amendment No. 5 to Lease, dated as of March 22, 2017 by and between the registrant and Freescale Semiconductor, Inc.
8-K
001-37900
10.1
3/28/2017
10.7.6
Amendment No. 6 to Lease, dated as of October 31, 2017 by and between the registrant and NXP USA, Inc. (formerly Freescale Semiconductor, Inc. ).
10-K
001-37900
10.40
3/15/2018
10.7.7
Amendment No. 7 to Lease, effective as of June 30, 2018 by and between the registrant and NXP USA, Inc. (formerly Freescale Semiconductor, Inc.) .
10-Q
001-37900
10.1
11/14/2018
10.7.8
Amendment No. 8 to Lease, effective as of November 30, 2019 by and between the registrant and NXP USA, Inc. (formerly Freescale Semiconductor, Inc.).
10-K
001-37900
10.15
3/13/2020
10.7.9
Amendment No. 9 to Lease, effective as of March 31, 2020 by and between the registrant and NXP USA, Inc. (formerly Freescale Semiconductor, Inc.).
10-Q
001-37900
10.2
8/06/2020
69
Table of Contents
10.7.10
Amendment No. 10 to Lease, effective as of February 12, 2022 by and between the registrant and NXP USA, Inc. (formerly Freescale Semiconductor, Inc.)
10-K
001-37900
10.7.10
3/2/2023
10.8
Amended and Restated Loan and Security Agreement, dated as of August 5, 2019, between the registrant and Silicon Valley Bank.
10-Q
001-37900
10.1
11/08/2019
10.8.1
First Amendment to Amended and Restated Loan and Security Agreement, dated as of July 15, 2020, by and between the registrant and Silicon Valley Bank.
10-Q
001-37900
10.3
8/06/2020
10.8.2
Second Amendment to Amended and Restated Loan and Security Agreement, dated as of July 28, 2021, by and between the registrant and Silicon Valley Bank.
10-Q
001-37900
10.5
8/12/2021
10.8.3
Third Amendment to Amended and Restated Loan and Security Agreement, dated as of July 22, 2022, by and between the registrant and Silicon Valley Bank
10-Q
001-37900
10.1
8/12/2022
10.9
Commercial Industrial Lease Agreement, dated as of May 18, 2012 by and between the registrant and Principal Life Insurance Company.
S-1
333-213569
10.17
9/09/2016
10.9.1
Amendment No. 1 to Commercial Industrial Lease Agreement, dated August 12, 2016 by and between the registrant and Legacy Stonelake JV-T, LLC, successor in interest to Principal Life Insurance Company.
S-1
333-213569
10.22
9/09/2016
10.10
Sublease Agreement, dated January 31, 2017 by and between the registrant and NXP USA, Inc. and Consent to of Landlord to Sublease, dated March 10, 2017, by and among the registrant, NXP USA, Inc. and VWP-BV CM 5670, LLC.
8-K
001-37900
10.1
3/28/2017
10.10.1
First Amendment to Sublease Agreement, dated February 13, 2017, by and between the registrant and NXP USA, Inc. and Consent of Landlord to Amendment to Sublease, dated March 10, 2017, by and among the registrant, NXP USA, Inc. and VWP-BV CM 5670, LLC.
8-K
001-37900
10.2
3/28/2017
70
Table of Contents
10.10.2
Second Amendment to Sublease Agreement dated March 2, 2017 by and between the registrant and NXP USA, Inc. and Consent of Landlord to Sublease, dated March 10, 2017, by and among the registrant, NXP USA, Inc. and VWP-BV CM 5670, LLC.
8-K
001-37900
10.3
3/28/2017
10.10.3
Third Amendment to Sublease Agreement, dated October 17, 2017 by and between the registrant and NXP USA, Inc. and Consent of Landlord to Sublease, dated March 10, 2017, by and among the registrant, NXP USA, Inc. and VWP-BV CM 5670, LLC.
10-K
001-37900
10.39
3/15/2018
10.11++
STT-MRAM Joint Development Agreement, dated as of October 17, 2014 by and between the registrant and GLOBALFOUNDRIES Inc.
10-Q
001-37900
10.1
11/2/2023
10.11.1++
Amendment No. 1 to the STT-MRAM Joint Development Agreement, dated as of May 27, 2016 by and between the registrant and GLOBALFOUNDRIES Inc.
10-Q
001-37900
10.2
11/2/2023
10.11.2++
Amendment No. 2 to the STT-MRAM Joint Development Agreement, effective as of July 25, 2017 by and between the registrant and GLOBALFOUNDRIES Inc.
10-K
001-37900
10.11.2
3/04/2021
10.11.3++
Amendment No. 3 to the STT-MRAM Joint Development Agreement, effective as of January 1, 2018 by and between the registrant and GLOBALFOUNDRIES Inc.
10-Q
001-37900
10.3
11/2/2023
10.11.4++
Amendment No. 4 to the STT-MRAM Joint Development Agreement, effective as of December 31, 2019 by and between the registrant and GLOBALFOUNDRIES, Inc.
10-K
001-37900
10.11.4
3/04/2021
10.12+
Manufacturing Agreement, dated as of October 23, 2014 by and between the registrant and GLOBALFOUNDRIES Singapore Pte. Ltd.
S-1
333-213569
10.20
9/09/2016
10.13
Restricted Stock Purchase Agreement, dated as of October 21, 2014 by and between the registrant and GLOBALFOUNDRIES Inc.
S-1
333-213569
10.21
9/09/2016
71
Table of Contents
10.14
Common Stock Purchase Agreement, dated as of September 23, 2016 by and between the registrant and GigaDevice (HK) Limited.
S-1/A
333-213569
10.23
9/26/2016
10.15
Subcontract Agreement, dated as of October 3, 2022, by and between the registrant and QuickLogic Corporation.
10-Q
001-37900
10.2
11/10/2022
10.16 †
Non-employee Director Compensation Program, as Amended.
10-Q
001-37900
10.1
5/4/2023
10.17 †
Offer Letter, dated December 30, 2020, by and between the registrant and Darin Billerbeck.
10-K
001-37900
10.26
3/04/2021
10.18 †
Executive Employment Agreement, effective as of April 3, 2021, by and between the registrant and Sanjeev Aggarwal .
8-K
001-37900
10.1
7/22/2021
10.19 †
Executive Employment Agreement, effective as of July 2, 2021, by and between the registrant and Anuj Aggarwal .
8-K
001-37900
10.2
7/22/2021
10.20 †
First Amendment to Executive Employment Agreement, effective as of March 14, 2022, by and between the registrant and Sanjeev Aggarwal.
8-K
001-37900
10.1
3/02/2022
10.21 †
First Amendment to Offer Letter, effective as of March 14, 2022, by and between the registrant and Darin Billerbeck.
8-K
001-37900
10.2
3/02/2022
10.22 †
First Amendment to Executive Employment Agreement, effective as of March 14, 2022, by and between the registrant and Anuj Aggarwal.
8-K
001-37900
10.3
3/02/2022
10.23 †
Executive Severance and Change in Control Plan.
8-K
001-37900
10.4
3/02/2022
10.24 †
Restricted Stock Unit Grants to Executive Chairman, CEO and CFO
8-K
001-37900
Item 5.02
5/12/2022
23.1*
Consent of Ernst & Young LLP, Independent Registered Public Accounting Firm.
24.1*
Power of Attorney (included on the Signatures page of this Annual Report on Form 10-K).
72
Table of Contents
31.1*
Certification of Principal Executive Officer Pursuant to Rules 13a-14(a) and 15d-14(a) under the Securities Exchange Act of 1934, as amended.
31.2*
Certification of Principal Financial Officer Pursuant to Rules 13a-14(a) and 15d-14(a) under the Securities Exchange Act of 1934, as amended.
32.1**
Certification of Principal Executive Officer and Principal Financial Officer Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
97.1*
Incentive Compensation Recoupment Policy
101.INS*
Inline XBRL Instance Document – the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document.
101.SCH*
Inline XBRL Taxonomy Extension Schema Document.
101.CAL*
Inline XBRL Taxonomy Extension Calculation Linkbase Document.
101.DEF*
Inline XBRL Taxonomy Extension Definition Linkbase Document.
101.LAB*
Inline XBRL Taxonomy Extension Label Linkbase Document.
101.PRE*
Inline XBRL Taxonomy Extension Presentation Linkbase Document.
104*
Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101).
*
Filed herewith.
**
Furnished herewith. Exhibit 32.1 is being furnished and shall not be deemed to be “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or otherwise subject to the liability of that section, nor shall such exhibit be deemed to be incorporated by reference in any registration statement or other document filed under the Securities Act of 1933, as amended, or the Exchange Act, except as otherwise specifically stated in such filing.
+
Confidential treatment has been granted for certain portions of this exhibit.
++
Portions of the exhibit, marked by brackets, have been omitted because the omitted information (i) is not material and (ii) would likely cause competitive harm if publicly disclosed.
73
Table of Contents
†
Indicates a management contract or compensatory plan.
(b) We have filed or incorporated into this Annual Report on Form 10-K by reference, the exhibits listed on the Exhibit Index immediately above.
(c) See Item 15(a)2 above.
Item 16. Form 10-K Summary .
Not provided.
74
Table of Contents
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, as amended, the Registrant has duly caused this Report to be signed on its behalf by the undersigned, thereunto duly authorized, in Chandler, Arizona, on February 29, 2024.
Everspin Technologies, Inc.
By:
/s/ Sanjeev Aggarwal
Sanjeev Aggarwal
Chief Executive Officer
(Principal Executive Officer )
By:
/s/ Anuj Aggarwal
Anuj Aggarwal
Chief Financial Officer
(Principal Financial and Accounting Officer)
75
Table of Contents
KNOW ALL PERSONS BY THESE PRESENTS, that each person whose signature appears below constitutes and appoints Sanjeev Aggarwal and Anuj Aggarwal, and each of them, as his true and lawful attorneys-in-fact and agents, each with the full power of substitution, for him and in his name, place or stead, in any and all capacities, to sign any and all amendments to this Annual Report on Form 10-K, and to file the same, with all exhibits thereto and other documents in connection therewith, with the Securities and Exchange Commission, granting unto said attorneys-in-fact and agents, and each of them, full power and authority to do and perform each and every act and thing requisite and necessary to be done in and about the premises, as fully to all intents and purposes as he might or could do in person, hereby ratifying and confirming all that said attorneys-in-fact and agents, or their or his substitute or substitutes, may lawfully do or cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, this Report has been signed below by the following persons on behalf of the Registrant in the capacities and on the dates indicated.
Signature
Title
Date
/s/ Sanjeev Aggarwal
Chief Executive Officer and Director
February 29, 2024
Sanjeev Aggarwal
(Principal Executive Officer)
/s/ Anuj Aggarwal
Chief Financial Officer
February 29, 2024
Anuj Aggarwal
(Principal Financial and Accounting Officer)
/s/ Darin G. Billerbeck
Chairman of the Board
February 29, 2024
Darin G. Billerbeck
/s/ Lawrence G. Finch
Director
February 29, 2024
Lawrence G. Finch
/s/ Geoff Ribar
Director
February 29, 2024
Geoff Ribar
/s/ Tara Long
Director
February 29, 2024
Tara Long
/s/ Glen Hawk
Director
February 29, 2024
Glen Hawk
/s/ Douglas Mitchell
Director
February 29, 2024
Douglas Mitchell
76
Text extracted from the filing as submitted to EDGAR. Formatting, tables and exhibits are simplified for reading; the original document is authoritative for anything you rely on.