What changed in this filing

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Item 9A. Controls and Procedures

2021-03-01 compared with 2020-03-10 · 72 added, 44 removed, 93 unchanged (56% of the section changed)

1 unchanged sentence

Limitations on Effectiveness of Controls and Procedures

In designing and evaluating our disclosure controls and procedures and internal control over financial reporting, management recognizes that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving the desired control objectives.

In addition, the design of a control system must reflect the fact that there are resource constraints and that management is required to apply judgment in evaluating the benefits of possible controls and procedures relative to their costs.

Because of the inherent limitations in all control systems, no evaluation of controls can provide absolute assurance that all control issues and instances of fraud, if any, have been detected.

The Company maintains disclosure controls and procedures (as that term is defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended (the “Exchange Act”)) that are designed to ensure that information required to be disclosed in the Company’s reports 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 the Company’s management, including its Chief Executive Officer and Chief Financial Officer, as appropriate, to allow timely decisions regarding required disclosures.

In designing and evaluating our disclosure controls and procedures, management recognizes that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving the desired control objectives.

In addition, the design of disclosure controls and procedures must reflect the fact that there are resource constraints and that management is required to apply judgment in evaluating the benefits of possible controls and procedures relative to their costs.

Evaluation of Disclosure Controls and Procedures

1 unchanged sentence

Based on this evaluation, our principal executive officer and principal financial officer concluded that our disclosure controls and procedures were effective at the reasonable assurance level as of December 31, 2020.

Remediation of Material Weakness

In connection with our audit of the fiscal year 2018 consolidated financial statements, we and our independent registered public accounting firm identified one material weakness in our controls related to the lack of review and oversight over financial reporting.

We determined that we had insufficient financial statement close processes and procedures relating to the classification and presentation of certain revenue and expenses.

During the year ended December 31, 2019, we implemented enhanced procedures to remediate the deficiencies in our internal control over financial reporting relating to the lack of review and oversight over financial reporting that resulted in a material weakness.

Specific remedial actions undertaken by management included, without limitation:

the hiring of a senior financial executive with a focus on SEC reporting and technical accounting;

the implementation of preventative and detective procedures and controls;

analytical reviews designed to improve our annual and quarterly financial close process.

Management's Report on Internal Control Over Financial Reporting

This Annual Report on Form 10-K does not include a report of management's assessment regarding internal control over financial reporting or an attestation report of our independent registered public accounting firm due to a transition period established by the rules of SEC for newly public compa nies.

Our management is responsible for establishing and maintaining adequate internal control over financial reporting (as defined in Rule 13a-15(f) of the Exchange Act).

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

Under the supervision and with the participation of the Company’s principal executive officer and principal financial officer, our management assessed the effectiveness of our internal control over financial reporting as of December 31, 2020 based on the criteria set forth in Internal Control-Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (2013 framework).

Based on the assessment, our management concluded that our internal control over financial reporting was effective as of December 31, 2020.

The effectiveness of our internal control over financial reporting as of December 31, 2020 has been audited by Ernst & Young LLP, an independent registered public accounting firm, as stated in their report that is included herein.

Changes in Internal Control Over Financial Reporting

Except for the remediation measures described above, there were no changes in our internal control over financial reporting identified in connection with the evaluation required by Rule 13a-15(d) and 15d-15(d) of the Exchange Act that occurred during the quarter ended December 31, 2019 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

There were no changes in our internal control over financial reporting (as that term is defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act) 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.

Report of Independent Registered Public Accounting Firm

To the Stockholders and the Board of Directors of Progyny, Inc.

Opinion on Internal Control over Financial Reporting

We have audited Progyny, Inc.’s internal control over financial reporting as of December 31, 2020, based on criteria established in Internal Control—Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (2013 framework) (the COSO criteria).

In our opinion, Progyny, Inc.

(the Company) maintained, in all material respects, effective internal control over financial reporting as of December 31, 2020, 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, 2020 and 2019, the related consolidated statements of operations, comprehensive income (loss), stockholders’ equity (deficit) and cash flows for each of the three years in the period ended December 31, 2020, and the related notes and our report dated March 1, 2021, 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 Management’s Annual 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 the U.S.

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

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

/s/ Ernst & Young LLP

New York, New York

March 1, 2021

OTHER INFORMATION

2 unchanged sentences

Our Board of Directors has adopted a Code of Conduct applicable to all officers, directors and employees, including our principal executive officer, principal financial officer, principal accounting officer or controller, or persons performing similar functions.

A copy of the code is available at the Investor Relations section of our website, located at investors.progyny.com, under “Governance—Documents and Charters.”

We intend to make all disclosures required by law or Nasdaq Stock Market rules regarding any amendments to, or waivers from, any provisions of the code at the same location of our website.

A copy of the code is available at the Investor Relations section of our website, located at investors.progyny.com, under “Governance—Documents and Charters.” We intend to make all disclosures required by law or Nasdaq Stock Market rules regarding any amendments to, or waivers from, any provisions of the code at the same location of our website.

Our website is not incorporated by reference into this Annual Report on Form 10-K, and you should not consider information on our website to be part of this Annual Report on Form 10-K.

Other Information

The remaining information required by this item will be included under the headings “Proposal 1—Election of Directors,”

“Corporate Governance,”

and, if applicable, “Delinquent Section 16(a) Reports”

in our definitive proxy statement relating to the 2020 Annual Meeting of Stockholders to be filed with the SEC within 120 days of the fiscal year ended December 31, 2019, which we refer to as our 2020 Proxy Statement, and such required information is incorporated herein by reference into this Annual Report on Form 10-K.

The remaining information required by this item will be included under the headings “Proposal 1—Election of Directors,” “Information Regarding Director Nominees and Current Directors,” “Information Regarding the Board of Directors and Corporate Governance,” and, if applicable, “Delinquent Section 16(a) Reports” in our definitive proxy statement relating to the 2021 Annual Meeting of Stockholders to be filed with the SEC within 120 days of the fiscal year ended December 31, 2020, which we refer to as our 2021 Proxy Statement, and such required information is incorporated herein by reference into this Annual Report on Form 10-K.

EXECUTIVE COMPENSATION

The information required by this item will be included under the heading “Executive Compensation,”

“Director Compensation,”

and “Corporate Governance”

in our 2020 Proxy Statement and is hereby incorporated by reference into this Annual Report on Form 10-K.

The information required by this item will be included under the heading “Executive Compensation,” “Non-Employee Director Compensation,” and “Information Regarding the Board of Directors and Corporate Governance” in our 2021 Proxy Statement and is hereby incorporated by reference into this Annual Report on Form 10-K.

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

The information required by this item will be included under the headings “Securities Authorized for Issuance Under Equity Compensation Plans”

and “Security Ownership of Certain Beneficial Owners and Management”

in our 2020 Proxy Statement and is hereby incorporated by reference into this Annual Report on Form 10 K.

The information required by this item will be included under the headings “Equity Compensation Plan Information” and “Security Ownership of Certain Beneficial Owners and Management” in our 2021 Proxy Statement and is hereby incorporated by reference into this Annual Report on Form 10 K.

CERTAIN RELA TIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE

The information required by this item will be included under the headings “Certain Relationships and Related Person Transactions,”

and “Corporate Governance—Director Independence”

in our 2020 Proxy Statement and is hereby incorporated by reference into this Annual Report on Form 10‑K.

The information required by this item will be included under the headings “Transactions with Related Persons,” and “Information Regarding the Board of Directors and Corporate Governance” in our 2021 Proxy Statement and is hereby incorporated by reference into this Annual Report on Form 10-K.

PRINCIPAL ACCOUNTING FEES AND SERVICES

The information required by this item will be included under the heading “Principal Accountant Fees and Services”

in our 2020 Proxy Statement and is hereby incorporated by reference into this Annual Report on Form 10‑K .

The information required by this item will be included under the heading “Principal Accountant Fees and Services” in our 2021 Proxy Statement and is hereby incorporated by reference into this Annual Report on Form 10-K.

EXHIBITS, financial statement schedules.

Documents filed as part of this report:

(a) Documents filed as part of this report:

List of Financial Statements

The following financial statements are included in Item 8 “Financial Statements and Supplementary Data”

The following financial statements are included in Item 8 “Financial Statements and Supplementary Data” herein.

Report of Independent Registered Public Accounting Firm

1 unchanged sentence

Consolidated Balance Sheets

Consolidated Statements of Operations and Comprehensive Income (Loss)

Consolidated Statements of Changes in Convertible Preferred Stock and Stockholders’

Consolidated Statements of Operations

Consolidated Statements of Comprehensive Income (Loss)

Consolidated Statements of Changes in Convertible Preferred Stock and Stockholders’ Deficit

Consolidated Statements of Cash Flows

19 unchanged sentences

Progyny, Inc.

2017 Equity Incentive Plan, as amended, and forms of agreements thereunder .

2017 Equity Incentive Plan and forms of agreements thereunder .

Amendment No.

1 to the Progyny, Inc.

2017 Equity Incentive Plan.

Progyny, Inc.

2019 Equity Incentive Plan and forms of agreements thereunder.

Amendment No.

1 to the Progyny, Inc.

2019 Equity Incentive Plan.

Progyny, Inc.

5 unchanged sentences

and Peter Anevski, dated September 25, 2019.

Letter Agreement between Progyny, Inc.

and Karin Ajmani .

Amended and Restated Employment Agreement between Progyny, Inc.

and Mark Livingston dated September 15, 2020.

Employment Agreement between Progyny, Inc.

and Jennifer Bealer dated September 8, 2017.

Employment Agreement between Progyny, Inc.

and Lisa Greenbaum dated April 19, 2019.

Sublease Agreement, dated as of July 29, 2020 by and between IPREO Holdings, LLC and Progyny, Inc.

L oan and Security Agreement, dated as of June 8, 2018, between Silicon Valley Bank and Registrant.

Loan and Security Agreement, dated as of June 8, 2018, between Silicon Valley Bank and Registrant.

Amendments to Loan and Security Agreement, dated as of June 8, 2018, between Silicon Valley Bank and Registrant.

Consent of Independent Registered Public Accounting Firm .

22 unchanged sentences

David Schlanger

Chief Executive Officer and Director

Chief Executive Officer

(Principal Executive Officer)

POWER OF ATTORNEY

KNOW ALL PERSONS BY THESE PRESENTS, that each person whose signature appears below constitutes and appoints David Schlanger and Peter Anevski, and each one of them, as his or her true and lawful attorneys-in-fact and agents, with full power of substitution and resubstitution, for him or her and in their name, place and 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 connection therewith, as fully to all intents and purposes as he or she might or could do in person, hereby ratifying and confirming all that said attorneys-in-fact and agents or any of them, or his or her substitute or substitutes, may lawfully do or cause to be done by virtue hereof.

KNOW ALL PERSONS BY THESE PRESENTS, that each person whose signature appears below constitutes and appoints David Schlanger and Mark Livingston, and each one of them, as his or her true and lawful attorneys-in-fact and agents, with full power of substitution and resubstitution, for him or her and in their name, place and 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 connection therewith, as fully to all intents and purposes as he or she might or could do in person, hereby ratifying and confirming all that said attorneys-in-fact and agents or any of them, or his or her 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, this report has been signed below by the following persons on behalf of the registrant and in the capacities indicated as of March 1, 2021.

3 unchanged sentences

(principal executive officer)

/s/ PETER ANEVSKI

President, Chief Financial & Operating Officer

Peter Anevski

/s/ MARK LIVINGSTON

Chief Financial Officer

Mark Livingston

(principal financial and accounting officer)

1 unchanged sentence

Beth Seidenberg, M.D.

/s/ MALISSIA CLINTON

Malissia Clinton

/s/ FRED COHEN

1 unchanged sentence

/s/ KEVIN GORDON

/s/ ROGER HOLSTEIN

Roger Holstein

/s/ JEFFREY PARK

3 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