What changed in this filing

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Item 9A. Controls and Procedures

2022-03-11 compared with 2021-03-15 · 69 added, 92 removed, 254 unchanged (39% of the section changed)

2 unchanged sentences

Under the supervision and with the participation of management, including our Chief Executive Officer and Chief Financial Officer, we evaluated the effectiveness of disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) of the Exchange Act).

Based upon that evaluation, our Chief Executive Officer and Chief Financial Officer concluded that our disclosure controls and procedures were effective as of December 31, 2020, to ensure that information required to be disclosed in the reports that we file or submit under the Exchange Act is recorded, processed, summarized, and reported within the time periods specified in the SEC’s rules and forms, and that such information is accumulated and communicated to management, including the Chief Executive Officer and Chief Financial Officer, as appropriate, to allow for timely decisions regarding required disclosure.

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in the reports that we file or submit under the Exchange Act is recorded, processed, summarized, and reported within the time periods specified in the SEC’s rules and forms, and that such information is accumulated and communicated to management, including the Chief Executive Officer and Chief Financial Officer, as appropriate, to allow for timely decisions regarding required disclosure.

Management’s Report on Internal Control Over Financial Reporting

6 unchanged sentences

Grant Thornton LLP, the independent registered public accounting firm that has audited our consolidated financial statements, has audited the effectiveness of the Company’s internal control over financial reporting as of December 31, 2021, as stated in their report included in Item 8 of this Annual Report.

Remediation of Previously Identified Material Weaknesses

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 would not be prevented or detected on a timely basis.

In our 2019 Annual Report, management identified the following control deficiencies that constituted material weaknesses in our internal control over financial reporting as of December 31, 2019:

• We did not maintain an effective control environment due to a lack of a sufficient complement of personnel with an appropriate level of knowledge, experience and training commensurate with our financial reporting requirements.

This material weakness resulted in immaterial misstatements to income tax receivable;

other current assets;

property, plant and equipment, net;

investment in joint venture;

other non-current assets;

accounts payable;

accrued salaries, wages and benefits;

other current liabilities;

deferred tax liabilities;

other non-current liabilities;

additional paid in capital;

accumulated deficit;

accumulated other comprehensive income (loss);

selling, general and administrative expense;

depreciation and amortization;

other operating expense/income;

write-off of unamortized debt issuance costs;

provision/benefit for income taxes;

comprehensive income/loss;

and cash flows in our consolidated financial statements for the interim and annual periods in the years ended December 31, 2019, 2018 and 2017, and prior periods.

• We did not design and maintain effective monitoring controls over our Paragon Medical business.

Specifically, we did not maintain personnel and systems that were sufficient to ensure the adequate monitoring of control activities for certain processes.

This material weakness did not result in a material misstatement to the financial statements.

These material weaknesses contributed to the material weaknesses described below, which were also disclosed in our 2019 Annual Report:

• We did not design and maintain effective internal controls over the accounting for transactions in the revenue and receivables business process within our Paragon Medical business to determine whether the transactions occurred and were complete and accurate.

This material weakness did not result in a material misstatement to the interim or annual consolidated financial statements.

• We did not design and maintain effective controls over certain information technology (“IT”) general controls within our Paragon Medical business for information systems that are relevant to the preparation of our financial statements.

Specifically, we did not design and maintain:

(i) program change management controls to ensure that IT program and data changes affecting financial IT applications and underlying accounting records are identified, tested, authorized, and implemented appropriately;

(ii) user access controls to ensure appropriate segregation of duties and that adequately restrict user and privileged access to certain financial applications, programs, and data to appropriate Company personnel;

and (iii) computer operations controls to ensure that critical batch jobs are monitored and data backups are authorized and monitored.

These IT deficiencies did not result in a material misstatement to the financial statements;

however, the deficiencies, when aggregated, could impact the effectiveness of IT-dependent controls (such as automated controls that address the risk of material misstatement to one or more assertions, along with the IT controls and underlying data that support the effectiveness of system-generated data and reports) that could result in misstatements potentially impacting all financial statement accounts and disclosures that would not be prevented or detected.

Accordingly, management has determined these deficiencies in the aggregate constitute a material weakness.

As disclosed in our 2019 Annual Report, we did not maintain effective control activities at one of our smaller foreign subsidiaries within our Mobile Solutions Brazil business.

Specifically, certain employees at one of our smaller foreign subsidiaries intentionally did not operate the controls related to inventory quantities as designed that resulted in the creation of unsupported physical inventory counts and inventory quantity adjustments.

This material weakness resulted in a revision to inventories, cost of sales, and accumulated other comprehensive income/loss within previously issued financial statements for the interim and annual periods in the years ended December 31, 2019, 2018, and 2017.

During the year ended December 31, 2020, management successfully completed a comprehensive plan for remediation of the material weaknesses.

This plan included the following actions:

• We have hired qualified professionals for critical roles within our finance department.

We also enhanced and implemented new processes, controls, and systems to strengthen our internal control over financial reporting, such as

standardized policies and procedures, implementation of a consolidation system, and enhanced reviews using reporting metrics.

• We have reinforced existing inventory count and reporting procedures in our Mobile Solutions Brazil business and have provided training to finance team members on these procedures.

As of December 31, 2020, the remediation measures described above had been implemented, and we had sufficient time to test the operating effectiveness and remediate the material weaknesses noted above.

All of the material weaknesses arising from deficiencies in the Paragon Medical business, which was part of our Life Sciences business, were removed upon the sale of our Life Sciences business on October 6, 2020, as disclosed in Note 2 of the Notes to Consolidated Financial Statements.

Changes in Internal Control Over Financial Reporting

Except for changes we made in connection with the implementation of the remediation plan described above, there have been no changes in our internal control over financial reporting (as defined in the Exchange Act Rules 13a-15(f) and 15d-15(f)) that occurred during the quarter ended December 31, 2020, that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

There have been no changes in our internal control over financial reporting (as defined in the Exchange Act Rules 13a-15(f) and 15d-15(f)) that occurred during the quarter ended December 31, 2021, that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

Other Information

Disclosure Regarding Foreign Jurisdictions that Prevent Inspections

Not applicable.

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Directors, Executive Officers, and Corporate Governance

32 unchanged sentences

The information required by this Item 14 of Form 10-K concerning our accounting fees and services is contained in the section entitled “Fees Paid to Registered Independent Public Accounting Firm” of our definitive proxy statement and, in accordance with General Instruction G to Form 10-K, is hereby incorporated herein by reference.

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Exhibit and Financial Statement Schedules

3 unchanged sentences

filed as part of this Annual Report on Form 10-K begin on the following pages hereof:

Report s of Independent Registered Public Accounting Firm s

Reports of Independent Registered Public Accounting Firms

Consolidated Statements of Operations and Comprehensive Income (Loss)

5 unchanged sentences

The required information is reflected in the Notes to Consolidated Financial Statements within Item 8.

The required information is reflected in the Index to Exhibits (attached hereto).

(b) Exhibits:

See Index to Exhibits (attached hereto).

will provide without charge to any person, upon the written request of such person, a copy of any of the Exhibits to this Form 10-K.

Form 10-K Summary

INDEX TO EXHIBITS

will provide without charge to any person, upon the written request of such person, a copy of any of the following Exhibits to this Form 10-K.

Incorporation by Reference

27 unchanged sentences

8-K 000-23486 3.1 December 11, 2019

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Incorporation by Reference

Number Exhibit Description Form SEC File No.

Exhibit Filing Date

3.6 Certificate of Designations of Series C Junior Participating Preferred Stock of NN, Inc.

4 unchanged sentences

8-K 000-23486 3.3 May 20, 2019

3.9 Certificate of Designation of Series D Preferred Stock

8-K 000-39268 3.1 March 22, 2021

4.1 The specimen stock certificate representing NN, Inc.’s Common Stock, par value $0.01 per share

8 unchanged sentences

4.5 Description of Securities

10-K 000-39268 4.5 March 15, 2021

4.6 Common Stock Warrant

8-K 000-39268 4.1 March 22, 2021

10.1* NN, Inc.

8 unchanged sentences

10-K 000-23486 10.16 March 31, 1999

Incorporation by Reference

Number Exhibit Description Form SEC File No.

Exhibit Filing Date

10.5 Escrow Agreement, effective as of August 29, 2014, by and among NN, Inc., Newport Global Advisors, L.P., John C.

21 unchanged sentences

10-K 000-23486 10.20 March 16, 2017

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Incorporation by Reference

Number Exhibit Description Form SEC File No.

Exhibit Filing Date

10.14 Form of Performance Share Unit Award Agreement under the 2016 Omnibus Incentive Plan

17 unchanged sentences

8-K 000-23486 10.1 April 3, 2018

Incorporation by Reference

Number Exhibit Description Form SEC File No.

Exhibit Filing Date

10.20 Amendment No.

17 unchanged sentences

10-Q 000-23486 10.1 May 10, 2019

10.26* Separation Agreement, dated as of April 1, 2017, by and between NN, Inc.

and J Robbie Atkinson.

10-Q 000-23486 10.2 May 10, 2019

10.26 Amendment No.

2 unchanged sentences

8-K 000-23486 10.1 June 12, 2019

10.28* Separation Agreement and Release, dated as of July 13, 2019, by and between NN, Inc.

and Thomas C.

8-K 000-23486 10.1 July 15, 2019

10.27* Form of Incentive Stock Option Agreement under the 2019 Omnibus Incentive Plan.

10-Q 000-23486 10.4 August 9, 2019

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Incorporation by Reference

Number Exhibit Description Form SEC File No.

Exhibit Filing Date

10.28* Form of Nonqualified Stock Option Agreement under the 2019 Omnibus Incentive Plan.

9 unchanged sentences

8-K 000-23486 10.2 August 27, 2019

10.35* Separation Agreement and General Release, dated as of September 15, 2019, by and between Richard D.

Holder and NN, Inc.

8-K 000-23486 10.1 September 16, 2019

10.33* Amendment No.

2 unchanged sentences

8-K 000-23486 10.1 September 24, 2019

10.37* Separation Agreement and General Release, dated as of November 24, 2019, by and between J.

Robert Atkinson and NN, Inc.

8-K 000-23486 10.1 November 25, 2019

10.34 Securities Purchase Agreement, dated December 5, 2019, by and among NN, Inc.

1 unchanged sentence

8-K 000-23486 10.1 December 11, 2019

Incorporation by Reference

Number Exhibit Description Form SEC File No.

Exhibit Filing Date

10.35 Registration Rights Agreement, dated as of December 11, 2019, by and among NN, Inc.

11 unchanged sentences

10-Q 001-39268 10.1 May 11, 2020

10.43* Executive Employment Agreement dated September 9, 2014, between the Company and Christopher Qualters

10-Q 001-39268 10.2 May 11, 2020

10.39 Amendment No.

8 unchanged sentences

8-K 001-39268 10.1 October 19, 2020

10.42 Securities Purchase Agreement, dated March 22, 2021, by and between N N, Inc.

and the NGTV Nevada Holdi ngs LP

8-K 000-39268 10.1 March 22, 2021

10.43 Board Observer Agreement, dated March 22, 2021, by and between N N, Inc.

and the N HTV N evada Holdings LP

8-K 000-39268 10.2 March 22, 2021

10.44 Term Loan Credit Agreement, dated March 22, 2021, by and among N N, Inc.

, as borrower, and Oaktree Fund Administration, LLC, as administrative agent

8-K 000-39268 10.3 March 22, 2021

10.45 Credit Agreement, dated March 22, 2021, by and among N N, Inc.

, as borrower, and JPMorgan Chase Bank, N.A., as administrative agent

8-K 000-39268 10.4 March 22, 2021

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Incorporation by Reference

Number Exhibit Description Form SEC File No.

Exhibit Filing Date

10.46 Cooperation Agreement, dated May 13, 2021, among NN, Inc., Corre Partners Management, LLC, and each of the persons listed on the signature page thereto

8-K 000-39268 10.1 May 14, 2021

10.47* Separation Agreement and General Release, dated June 14, 2021, by and between NN, Inc.

and Thomas D.

8-K 000-39268 10.1 June 15, 2021

10.48* Separation Agreement by and between NN, Inc.

and Michael C.

8-K 000-39268 10.2 June 15, 2021

10.49 Amendment No.

1 to Term Loan Credit Agreement, dated as of March 3, 2022, by and among NN, Inc., certain subsidiaries of NN, Inc., the lenders party thereto, and Oaktree Fund Administration, LLC, as administrative agent .

8-K 000-39268 10.1 March 4, 2022

21.1# List of Subsidiaries of NN, Inc.

11 unchanged sentences

101.DEF# XBRL Definition Linkbase Document

_______________________________

* Management contract or compensatory plan or arrangement.

2 unchanged sentences

Section 1350 and is not being filed for purposes of Section 18 of the Securities Exchange Act of 1934 and is not to be incorporated by reference into any filing of the Company, whether made before or after the date hereof, regardless of any general incorporation language in such filings.

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.

5 unchanged sentences

/s/ Warren A.

President, Chief Executive Officer, and Director

Veltman President, Chief Executive Officer, and Director

(Principal Executive Officer) March 11, 2022

/s/ THOMAS D.

Senior Vice President- Chief Financial Officer

(Principal Financial Officer) March 15, 2021

/s/ Michael C.

Vice President- Chief Accounting Officer

(Principal Accounting Officer) March 15, 2021

Non-Executive Chairman, Director March 15, 2021

Felcher Senior Vice President – Chief Financial Officer

(Principal Financial and Accounting Officer) March 11, 2022

Harman Non-Executive Chairman, Director March 11, 2022

/s/ Raynard D.

Director March 15, 2021

Benvenuti Director March 11, 2022

/s/ Robert E.

Director March 15, 2021

Brunner Director March 11, 2022

/s/ Christina E.

Carroll Director March 11, 2022

/s/ João Faria Director March 11, 2022

/s/ Rajeev Gautam, Ph.D.

Director March 11, 2022

/s/ STEVEN T.

Rajeev Gautam, Ph.D.

/s/ Shihab Kuran, Ph.D.

Director March 11, 2022

Shihab Kuran, Ph.D.

Director March 11, 2022

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