Phunware, Inc. 10-K

Item 9A. Controls and Procedures. Evaluation of Disclosure Controls and Procedures Disclosure controls and procedures are controls and other procedures designed to ensure that information required to be disclosed in our reports filed or submitted under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed in our reports filed or submitted under the Exchange Act is accumulated and communicated to management, including our Certifying Officers (as defined below), or persons performing similar functions, as appropriate, to allow timely decisions regarding required disclosure. Under the supervision and with the participation of our management, including our Chief Executive Officer and Chief Financial Officer (together, the “Certifying Officers”), we carried out an evaluation of the effectiveness of the design and operation of our disclosure controls and procedures as of December 31, 2023. Based on the foregoing, our Certifying Officers concluded that our disclosure controls and procedures were effective as of December 31, 2023. Management’s Report on Internal Controls Over Financial Reporting Our management is responsible for establishing and maintaining adequate internal control over financial reporting, as such term is defined in Rule 13a-15(f) of the Exchange Act. Our internal control over financial reporting is designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with GAAP. Under the supervision and with the participation of our management, including our Certifying Officers, we conducted an evaluation of the effectiveness of our internal control over financial reporting as of December 31, 2023, based on the criteria established in Internal Control — Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission for newly public companies (COSO). Based on this evaluation and the material weaknesses described below, our management concluded that our internal control over financial reporting was not effective as of December 31, 2023. 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 will not be prevented or detected on a timely basis. Management identified a material weakness in internal control over financial reporting related to the design of information technology general controls ("ITGCs") related to user access, program change and appropriate segregation of duties for certain IT applications. Further, as a result of cost cutting measures and headcount turnover in our accounting function, business process controls across the Company's financial reporting processes were not effectively designed and implemented due to a lack of segregation of duties between preparer and reviewer. Management will seek to update current processes and/or provide sufficient resources toward the proper mitigation of these material control weaknesses. Management is committed to continuous improvement of our internal control over financial reporting and will continue to diligently review our financial reporting controls and procedures. However, we cannot provide any assurance that these remediation efforts will be successful or that our internal control over financial reporting will be effective as a result of these efforts. Changes in Internal Control over Financial Reporting Except as set forth above, there were no changes in our internal control over financial reporting identified in conjunction with the evaluation required by Rules 13a-15(d) and 15d-15(d) of the Exchange Act that occurred during the quarter ended December 31, 2023 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting. Limitation on the Effectiveness of Controls Our management, including our Certifying Officers, do not expect that our disclosure controls or our internal control over financial reporting will prevent all errors and all fraud. A control system, no matter how well conceived and operated, can provide only reasonable, not absolute, assurance that the objectives of the control system are met. Further, the design of a 100 Table of Contents control system must reflect the fact that there are resource constraints, and the benefits of controls must be considered 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. These inherent limitations include the realities that judgments in decision-making can be faulty, and that breakdowns can occur because of a simple error or mistake. Additionally, controls can be circumvented by the individual acts of some persons, by collusion of two or more people or by management override of the controls. The design of any system of controls is also based in part upon certain assumptions about the likelihood of future events, and there can be no assurance that any design will succeed in achieving its stated goals under all potential future conditions; over time, controls may become inadequate because of changes in conditions, or the degree of compliance with policies or procedures may deteriorate. Because of the inherent limitations in a cost-effective control system, misstatements due to error or fraud may occur and not be detected. Item 9B. Other Information. None. Item 9C. Disclosure Regarding Foreign Jurisdictions that Prevent Inspections. Not Applicable. 101 Table of Contents PART III Item 10. Directors, Executive Officers and Corporate Governance. The following table sets forth the current ages and the names and positions of our directors and executive officers as of December 31, 2023: Name Age Position Executive Officers Michael Snavely 55 Chief Executive Officer and Class III Director Troy Reisner 56 Chief Financial Officer Chris Olive 54 Chief Legal Officer Non-Employee Directors Stephen Chen (1)(2)(3) 41 Class I Director, Chairperson Rahul Mewawalla (1)(2)(3) 45 Class I Director (1) Member of the Audit Committee (2) Member of the Compensation Committee (3) Member of the Nominating and Corporate Governance Committee Mr. Elliot Han, age 47, was appointed as a Class II non-employee director on January 21, 2024. Executive Officers and Significant Employees Each of our executive officers serves at the discretion of our board of directors (the "Board") and will hold office until his successor is duly appointed and qualified or until his earlier resignation or removal. The following biographical descriptions set forth certain information with respect to our executive officers based on information furnished to us by each such officer. Michael Snavely joined Phunware as its Chief Revenue officer in September 2023 and was appointed as Chief Executive Officer effective October 25, 2023. Mr. Snavely was also appointed to serve as a Class III director effective October 26, 2023 to fill the vacancy left when Russell Buyse resigned as Chief Executive Officer on October 25, 2023 and Class III director on October 26, 2023. Prior to joining Phunware, Mr. Snavely served as the General Manager of Vidable AI, a unit of Sonic Foundry (Nasdaq: SOFO) of Madison, Wisconsin since 2022. From 2019 until 2022, Mr. Snavely was chief commercial officer at CBANC, which provides a professional network of U.S. banking institutions, the people that work for them and the vendors who serve them. From 2017 to 2018, Mr. Snavely served as president of Springbox, a growth and transformation consulting firm, which was acquired by Prophet in 2019. From 2016 to 2017, he worked for Tile as a global business development leader. Mr. Snavely was previously employed by Phunware from 2014 to 2016, as the executive vice president of global software sales and marketing. Prior to working at Phunware, Mr. Snavely worked at Mutual Mobile (2011 - 2014), Bazaarvoice (2009 - 2011) and The Alliant Group (2007 - 2009), among other roles in his career. Mr. Snavely earned a BA from the College of Wooster in Wooster, Ohio and a J.D. from The Ohio State University. He is licensed (inactive) as an attorney at law in the State of Ohio. Troy Reisner has served as Phunware's Chief Financial Officer since June 2023. Previously he was the Chief Financial Officer at Keystone Tower Systems, Inc., a manufacturer of wind turbine towers, headquartered in Denver, Colorado. Prior to joining Keystone in December 2019, Mr. Reisner was a partner with the public accounting firm of Deloitte & Touche LLP until his retirement in June 2019. In January 2022, he was appointed to the board of CEA Industries, Inc., (Nasdaq: CEAD), which designs, engineers and sells environmental control and other technologies for the controlled environment agriculture industry, where he also serves as chairman of their audit committee and member of their compensation and strategic investments committee. Mr. Reisner earned a B.S. degree in Accounting from Southern Illinois University at Edwardsville, has practiced as a Certified Public Accountant for over 30 years and is licensed (inactive) as a CPA in the State of Missouri. Chris Olive joined Phunware in April 2022 as Chief Legal Officer. Prior to his tenure at Phunware, Mr. Olive was a partner at Bracewell LLP in Dallas, Texas, from 2006 to 2022. Mr. Olive brings to Phunware diverse transactional and 102 regulatory experience, based upon his representation of clients in various capacities in, among other things, complex, bespoke and customized credit facilities, structured financings, swaps and derivatives, insurance finance, corporate acquisitions, financial instrument and commodity purchase and sale and repurchase transactions and related banking, financial and other regulatory matters. He has also served as an associate at Jones Day and served in the United States Army Judge Advocate General’s Corps. Mr. Olive has a BBA in Finance with honors from the University of Miami, a JD from the Southern Methodist University School of Law and an LLM in Banking & Finance Law with distinction from the University of London. Non-Employee Directors The following biographical descriptions set forth certain information with respect our non-employee directors based on information furnished to us by each such director. Stephen Chen , who was elected to serve as a non-employee Class I director in November 2022 and currently serves as Chairperson of our board of directors is a board-tested operational leader and chief financial officer. Since July 2016, Mr. Chen has served as chief financial officer of Kent Moore Capital, an investment and advisory firm focused on specialty finance, where he also currently sits on the board of directors. Also, since 2016, Mr. Chen has served as chief financial officer of BioIntegrate, a regenerative medicine company. Mr. Chen has been involved in blockchain related projects since 2018, and, in 2021, he co-founded IHBit Global, a diversified blockchain holding company with assets including a crypto exchange, token project, electronic sports team and basketball team. From 2012 to 2016, Mr. Chen was a director for Hudson International, a global private investment firm. From 2008 to 2012, he led the emerging markets investment banking team at Oppenheimer Investments North America. Prior to joining Oppenheimer, Mr. Chen was a Vice President at J.P. Morgan. Mr. Chen has a B.S. degree from Brown University. We believe Mr. Chen is qualified to serve as a member of our Board because of his expertise in financial services and technology, including blockchain. Rahul Mewawalla was appointed to serve as a non-employee Class I director of Phunware in September 2021. Mr. Mewawalla is a technology, digital, product, and business leader with extensive strategic and operational leadership expertise across technology, internet, software, telecommunications, financial services, media, consumer, enterprise, digital and blockchain companies. He has held several executive leadership roles, and currently serves as Chief Executive Officer and President of Mawson Infrastructure Group Inc., a digital infrastructure company and previously served as Chief Executive Officer and President of Xpanse Inc., a software, technology and fintech company from 2020 to 2021, as Chief Digital Officer and Executive Vice President, Platforms and Technology Businesses at Freedom Mortgage Corporation, a national financial services company from 2020 to 2021, as Chief Executive Officer and President at Zenplace Inc., a software-as-a-service and technology platforms company from 2014 to 2020, as Vice President at Nokia Corporation, a global technology and telecommunications company from 2010 to 2012, as Vice President at General Electric Company’s NBCUniversal, a global media, entertainment and diversified company from 2008 to 2010, and as Senior Director at Yahoo! Inc., a global internet and technology company from 2005 to 2008. Mr. Mewawalla has served as a board director with numerous NASDAQ-listed public companies, including as Chairman of the Board, Board Committee Chairman, Chairman of the Audit Committee, Chairman of the Compensation Committee, Nominating and Governance Committee Member, Special Committee Member, Strategic Transactions Committee Member and Board Director at publicly traded companies, including at Rocky Mountain Chocolate Factory Inc (Nasdaq: RMCF), Lion Group Holding (Nasdaq: LGHL), Aquarius II Acquisition Corporation (Nasdaq: AQUB), Four Leaf Acquisition Corporation (Nasdaq: FORL) and Mawson Infrastructure Group, Inc. (Nasdaq: MIGI). Mr. Mewawalla also served as an independent board director at SOS Children’s Villages USA. He has also served as Senior Advisor to the San Francisco Mayor’s Office on Innovation, as Advisor to Stanford University's Persuasive Technology Lab, and as Committee Chair of the VC TaskForce SIG on Systems and Services. Mr. Mewawalla earned an MBA from the Kellogg School of Management at Northwestern University and a BBS from the University of Delhi. We believe Mr. Mewawalla’s extensive digital, technology, products, platforms, mobile, strategic and operational expertise, as well as his executive leadership experience, qualify him to serve as a director of the Company. Elliot Han was appointed to serve as a Class II non-employee director on January 21, 2024. Mr. Han is a Partner at PGP Capital Advisors, a boutique investment/merchant bank where he focuses on mergers & acquisitions and corporate finance both in the domestic and international arena. Mr. Han has extensive knowledge and expertise in corporate finance; corporate development & strategy; corporate law; start-up operations; investments; and digital asset finance (blockchain/cryptocurrencies). Mr. Han has held leadership positions at a variety of organizations, including Cantor Fitzgerald (Head of FinTech/Blockchain, Crypto & Digital Assets Investment Banking & Head of Technology Equity Capital Markets); the New York Stock Exchange (Head of FinTech & Consumer Tech Capital Markets); Jefferies (Head of West Coast Technology Equity Capital Markets); Goldman Sachs (Executive Director, Business Unit Manager and Operating Officer for UK and Emerging 103 Markets Investment Banking). Mr. Han was also part of the management team at the Argon Group, a leading blockchain/crypto software technology & advisory start-up. He has also spent time as a corporate lawyer at Freshfields Bruckhaus Deringer and began his career at Credit Suisse/CSFB. Mr. Han graduated with a BA from Columbia University, a Master’s degree from Oxford University, and law & MA degrees from Cambridge University. Mr. Han is also a board trustee, limited partner, and investor in various technology companies, funds, and educational institutions. We believe Mr. Han’s extensive corporate finance, corporate development and strategy, corporate law and digital asset finance expertise qualify him to serve as a director of the Company. Additional Information On February 18, 2022, certain stockholders filed a lawsuit against Phunware and its individual officers and directors. The case, captioned Wild Basin Investments, LLC, et al. v. Phunware, Inc., et al., was filed in the Court of Chancery of the state of Delaware (Cause No. 2022-0168-LWW). Plaintiffs alleged that they invested in various early rounds of financing while the Company was private and that Phunware should not have subjected their shares to a 180-day “lock up” period. Among others, Alan Knitowski, Randall Crowder, Matt Aune, Kathy Tan Mayor and Eric Manlunas, each of whom served as executive officers and/or directors as of December 17, 2019 have been named as defendants in the lawsuit. Mr. Knitowski, Mr. Aune's and Mr. Crowder's employment terminated with the Company effective December 27, 2022, June 30, 2023 and November 30, 2023, respectively. Mr. Manlunas resigned from our board effective October 1, 2023 and Ms. Mayor resigned from our board effective October 26, 2023. Delinquent Section 16(a) Reports Section 16(a) of the Exchange Act requires the Company’s directors, executive officers and persons who beneficially own more than 10% of the Company’s common stock (collectively, “Reporting Persons”) to file with the SEC reports regarding their ownership and changes in our ownership of our securities. We believe that, during 2023, our directors, executive officers and 10% stockholders complied with all Section 16(a) filing requirements, except for a late Form 4 filing by Troy Reisner on July 7, 2023 to report acquisition of restricted stock units of our common stock, which occurred on June 30, 2023, a late Form 4 filing by Randall Crowder on August 28, 2023 to report a sale of our common stock which occurred on August 21, 2023, a late Form 4 filing by Randall Crowder on November 14, 2023 to report an acquisition of our common stock which occurred on June 1, 2023, a late Form 4 filing by Chris Olive on November 14, 2023 to report an acquisition of our common stock which occurred on June 1, 2023, a late Form 4 filing by Michael Snavely on November 22, 2023 to report an acquisition of our common stock which occurred on November 15, 2023. CORPORATE GOVERNANCE Board Composition Our business affairs are managed under the direction of the Board. The Board currently consists of four members, three of whom qualify as independent within the meaning of the independent director guidelines of the Nasdaq Stock Market ("Nasdaq"). Mr. Snavely, who also serves as our Chief Executive Officer, is not considered independent. The Board is divided into three staggered classes of directors. At each annual meeting of stockholders, a class of directors will be elected for a three-year term to succeed the same class whose term is then expiring, as follows: • the Class I directors are currently Stephen Chen, and Rahul Mewawalla, and their terms will expire at the 2025 Annual Meeting of Stockholders; • the Class II director is currently Elliot Han, and his term will expire at the 2026 Annual Meeting of Stockholders; and • the Class III director is currently Michael Snavely, and his term will expire at the 2024 Annual Meeting of Stockholders. Our Certificate of Incorporation and Amended and Restated Bylaws provide that the number of directors shall consist of one or more members and may be increased or decreased from time to time by a resolution of the Board. Each director’s term continues until the election and qualification of his or her successor, or his or her earlier death, resignation or removal. Any increase or decrease in the number of directors will be distributed among the three classes so that, as nearly as possible, each class will consist of one-third of the total number of directors. This classification of the Board may have the effect of delaying or preventing changes in control of our Company. 104 On January 21, 2024, Elliot Han was appointed as a Class II non-employee director. On January 22, 2024, the Board appointed Chris Olive to serve as a Class II director. Subsequent to Mr. Olive’s appointment, the Board resolved to reduce the size of the Board to a total of four directors, comprised of two Class I directors, one Class II director and one Class III director. In connection with the reduction of the size of the Board, Chris Olive resigned as a director of the Company on January 22, 2024. Mr. Olive’s resignation was not due to any disagreement with the Company, its management, the Board or any committee thereof, or with respect to any matter relating to our operations, policies, or practices. Corporate Governance Guidelines and Code of Business Conduct and Ethics Our Board has adopted Corporate Governance Guidelines that address items such as the qualifications and responsibilities of our directors and director candidates and corporate governance policies and standards applicable to us in general. In addition, our Board has adopted a Code of Business Conduct and Ethics that applies to all of our employees, officers and directors, including our Chief Executive Officer, Chief Financial Officer and other executive and senior financial officers. The full text of our Corporate Governance Guidelines and Code of Business Conduct and Ethics is posted on the Governance portion of the investor relations page of our website at https://investors.phunware.com. We will post amendments to our Code of Business Conduct and Ethics or waivers of our Code of Business Conduct and Ethics for directors and executive officers that are required to be disclosed by the rules of the SEC or Nasdaq on the same website. Audit Committee We have established a designated standing audit committee. Messrs. Stephen Chen, Elliot Han and Rahul Mewawalla, each of whom is a non-employee member of the Board, comprise our Audit Committee. Mr. Mewawalla is the Chairperson of our Audit Committee. We have determined that each of the members of our Audit Committee satisfies the requirements for independence and financial literacy under the rules of Nasdaq and the SEC. During the fiscal year ended December 31, 2023, the committee met four times. The Audit Committee is responsible for, among other things: • selecting a qualified firm to serve as the independent registered public accounting firm to audit our financial statements; • helping to ensure the independence and performance of the independent registered public accounting firm; • discussing the scope and results of the audit with the independent registered public accounting firm and reviewing, with management and the independent registered public accounting firm, our interim and year-end financial statements; • developing procedures for employees to submit concerns anonymously about questionable accounting or audit matters; • reviewing the Company’s policies on and overseeing risk assessment and risk management, including enterprise risk management; • reviewing the adequacy and effectiveness of our internal control policies and procedures and the Company’s disclosure controls and procedures; • reviewing related person transactions; and • approving or, as required, pre-approving, all audit and all permissible non-audit services, other than de minimis non-audit services, to be performed by the independent registered public accounting firm. The Board has adopted a written charter for the Audit Committee that satisfies the applicable rules and regulations of the SEC and the listing standards of Nasdaq. Our Audit Committee charter can be found on the "Governance Documents" section of our Investor Relations website at https://investors.phunware.com/governance-docs. Audit Committee Financial Expert The Board determined Messrs. Stephen Chen and Rahul Mewawalla are both independent directors pursuant to Nasdaq's governance listing standards and each meet the qualifications of an "audit committee financial expert," as defined under the applicable rules and regulations of the SEC. In making this determination, our Board has considered prior experience, business acumen and independence. 105 Item 11. Executive Compensation. Phunware’s named executive officers (each a "NEO"), which consist of any person who served as principal executive officer ("PEO") during 2023 and the next two most highly compensated executive officers who served as such in for 2023, are: Michael Snavely, Chief Executive Officer Russell Buyse, Former Chief Executive Officer Troy Reisner, Chief Financial Officer Chris Olive, Chief Legal Officer Summary Compensation Table The following table sets forth information regarding the total compensation paid to our named executive officers for the last two fiscal years ended December 31, 2023 and 2022: Name and Principal Position Fiscal Year Salary ($) (1) Bonus ($) Stock Awards ($) (2) All other Compensation ($) (3) Total ($) Michael Snavely, Chief Executive Officer (4) 2023 101,073 15,000 219,450 4,438 339,961 Russell Buyse, Former Chief Executive Officer (5) 2023 293,403 — — 57,997 351,400 2022 3,693 40,000 — — 43,693 Troy Reisner, Chief Financial Officer (6) 2023 202,841 — 324,000 8,940 535,781 Chris Olive, Chief Legal Officer (7) 2023 300,000 — 87,640 26,630 414,270 2022 225,000 34,907 925,000 19,270 1,204,177 (1) Reflects actual earnings, which may differ from approved based salaries due to the effective date of salary increases. (2) Amounts represent the aggregate grant date fair value of stock options or restricted stock unit awards, computed in accordance with FASB ASC 718-10-25. The actual value realized by the named executive officer with respect to stock awards will depend on whether the award vests and, if it vests, the market value of our stock on the date such stock is sold. (3) Amounts shown in this column include contributions Phunware made on behalf of the named executive officer for inclusion in our medical benefits programs. (4) Mr. Snavely joined the Company as its Chief Revenue Officer on September 12, 2023. Mr. Snavely was appointed the Company's Chief Executive Officer effective October 25, 2023. Mr Snavely was paid a sign-on bonus of $5,000 pursuant to the terms of his employment agreement as Chief Revenue Officer and $10,000 pursuant to the terms of his employment agreement as Chief Executive Officer. (5) Mr. Buyse served as our CEO from December 28, 2022 until October 25, 2023. Mr. Buyse received additional compensation of $6,000 for service on our Board for the period from November 21, 2022 to December 27, 2022, which is excluded above. Subsequent to the date of his appointment as CEO, Mr. Buyse did not receive additional compensation as a member of our Board during his tenure on the board, which terminated on October 26, 2023. See Director Compensation below. Mr. Buyse was further paid a sign-on bonus of $40,000, pursuant to the terms of his employment agreement. (6) Mr. Reisner joined the Company as its Chief Financial Officer on June 2, 2023. (7) Mr. Olive joined the Company as its Chief Legal Officer on April 1, 2022. 106 Executive Employment Agreements We entered into employment agreements with each of the named executive officers noted above, of which only Michael Snavely, Troy Reisner and Chris Olive remain currently employed by the Company. The employment agreements with our NEOs generally provide for at-will employment and set forth each named executive officer's base salary, bonus target, severance eligibility and eligibility for other standard employee benefit plan participation. Pursuant to the employment agreements, certain current and future significant employees, including the named executive officers identified above, are eligible for severance benefits under certain circumstances. The actual amounts that would be paid or distributed as a result of a termination of employment occurring in the future may be different than those presented below as many factors will affect the amount of any payments and benefits upon a termination of employment. For example, some of the factors that could affect the amounts payable include base salary and annual bonus target percentage. Although the Company has entered into a written agreement to provide severance payments and benefits in connection with a termination of employment under particular circumstances, the Company, or an acquirer, may mutually agree with an executive officer or significant employee to provide payments and benefits on terms that vary from those currently contemplated. In addition to the amounts presented below, each eligible executive officer or significant employee would also be able to exercise any previously-vested stock options that he or she held, in accordance with the terms of those grants and the respective plans pursuant to which they were granted. Finally, the eligible executive officer or significant employee may also receive any benefits accrued under our broad-based benefit plans, in accordance with those plans and policies. Mr. Snavely’s Employment Agreement We entered into an employment agreement, dated as of October 25, 2023, with Michael Snavely, who services as our Chief Executive Officer. Mr. Snavely is employed by the Company on an at-will basis, meaning that either Mr. Snavely or the Company may terminate the employment relationship at any time with or without cause. The employment agreement provides for an initial base salary of $350,000 per year, a sign-on bonus of $10,000, eligibility in the Company’s bonus programs established by the Board or any committee of the board and eligibility to participate in our employee benefit programs. Under the terms of his employment agreement, the Company provided Mr. Snavely an initial grant of 30,000 restricted stock units (adjusted for reverse stock split) with various vesting dates and a separate grant of $750,000 restricted stock units on or before January 31, 2024 with vesting to commence on March 31, 2024. If the Company terminates Mr. Snavely’s employment without cause at any time, or if Mr. Snavely resigns for good reason, and in each case, such termination or resignation occurs outside of a Change in Control Period, as defined in the employment agreement, Mr. Snavely is entitled to: • Executive Accrued Benefits, which include (i) Mr. Snavely’s unpaid base salary, if any, through the date of termination, resignation, or separation, (ii) reimbursement for Mr. Snavely’s documented, reasonable and necessary business expenses incurred but not paid, if any, through the date of termination, and (iii) any other amounts or benefits to which Mr. Snavely is entitled on termination under applicable law, Company policy or plan, or other agreement to which Mr. Snavely is a party with the Company; • continuing payments of severance pay at a rate equal to their base salary rate, as then in effect, for nine (9) months from the date of termination; and • partial immediate vesting of Mr. Snavely’s then unvested initial restricted stock unit award. If the Company terminates Mr. Snavely’s employment without cause at any time, or if Mr. Snavely resigns for good reason, and in each case, such termination or resignation occurs during a Change in Control Period, as defined in the employment agreement, Mr. Snavely is entitled to: • Executive Accrued Benefits, which include (i) Mr. Snavely’s unpaid base salary, if any, through the date of termination, resignation, or separation, (ii) reimbursement for Mr. Snavely’s documented, reasonable and necessary business expenses incurred but not paid, if any, through the date of termination, and (iii) any other amounts or benefits to which Mr. Snavely is entitled on termination under applicable law, Company policy or plan, or other agreement to which Mr. Snavely is a party with the Company; • continuing payments of severance pay at a rate equal to their base salary rate, as then in effect, for nine (9) months from the date of termination; and • immediate vesting as to 100% of Mr. Snavely’s then unvested initial restricted stock unit award. 107 Mr. Reisner’s Employment Agreement We entered into an employment agreement, dated as of June 2, 2023, with Troy Reisner, who serves as our Chief Financial Officer. Mr. Reisner is employed by the Company on an at-will basis, meaning that either Mr. Reisner or the Company may terminate the employment relationship at any time with or without cause. The employment agreement provides for an initial base salary of $350,000 per year, eligibility in the Company’s bonus programs established by the Board or any committee of the Board and eligibility to participate in our employee benefit programs. Under the terms of his employment agreement, the Company provided Mr. Reisner a one-time grant of 12,000 restricted stock units (adjusted for reverse stock split) on June 2, 2023. The restricted stock units granted to Mr. Reisner are subject to a separate award agreement, which outlines the specifics of such grant, including but not limited to, the vesting schedule, forfeiture for cause provisions, the Company’s buyback rights and other restrictions and terms. If the Company terminates Mr. Reisner’s employment without cause at any time, or if Mr. Reisner resigns for good reason, and in each case, such termination or resignation occurs outside a Change in Control Period, as defined in the employment agreement, Mr. Reisner is entitled to: • Executive Accrued Benefits, which include (i) Mr. Reisner’s unpaid base salary, if any, through the date of termination, resignation, or separation, (ii) reimbursement for Mr. Reisner’s documented, reasonable and necessary business expenses incurred but not paid, if any, through the date of termination, and (iii) any other amounts or benefits to which Mr. Reisner is entitled on termination under applicable law, Company policy or plan, or other agreement to which Mr. Reisner is a party with the Company; • continuing payments of severance pay at a rate equal to their base salary rate, as then in effect, for nine (9) months from the date of termination; and • partial immediate vesting of Mr. Reisner’s then unvested initial restricted stock unit award. If the Company terminates Mr. Reisner’s employment without cause at any time, or if Mr. Reiner resigns for good reason, and in each case, such termination or resignation occurs during a Change in Control Period, as defined in the employment agreement, Mr. Reisner is entitled to: • Executive Accrued Benefits, which include (i) Mr. Reisner’s unpaid base salary, if any, through the date of termination, resignation, or separation, (ii) reimbursement for Mr. Reisner’s documented, reasonable and necessary business expenses incurred but not paid, if any, through the date of termination, and (iii) any other amounts or benefits to which Mr. Reisner is entitled on termination under applicable law, Company policy or plan, or other agreement to which Mr. Reisner is a party with the Company; • continuing payments of severance pay at a rate equal to their base salary rate, as then in effect, for nine (9) months from the date of termination; and • immediate vesting as to 100% of Mr. Reisner’s then unvested initial restricted stock unit award. Mr. Olive's Employment Agreement We entered into an employment agreement, as amended and restated in September 2022, with Chris Olive, who serves as our Chief Legal Officer. The agreement has an initial term of four years from his April 2022 hire date and automatically renews for additional one year terms, unless either party provides ninety (90) day notice. If a change in control, as defined in the agreements, occurs when there are fewer than twelve (12) months remaining during the initial term or an additional term, the term of the employment agreement will extend automatically through the date that is twelve (12) months following the effective date of the change in control. The employment agreement provides for an initial base salary of $300,000 per year, eligibility in the Company's bonus programs established by the Board or any committee of the Board, and eligibility to participate in our employee benefit programs. Under the terms of his employment agreement, the Company provided Mr. Olive a one-time grant of 10,000 restricted stock units (adjusted for reverse stock split) on September 16, 2022. The restricted stock units granted to Mr. Olive are subject to a separate award agreement, which outlines the specifics of such grant, including but not limited to, the vesting schedule, forfeiture for cause provisions, the Company’s buyback rights and other restrictions and terms. Mr. Olive is eligible to receive the following payments and benefits in connection with a termination not in connection with a Change in Control, as defined in the agreements: 108 • continuing payments of severance pay at a rate equal to their base salary rate, as then in effect, for six (6) months from the date of termination; • coverage under our group health insurance plans or payment of the full amount of health insurance premiums as provided under the Consolidated Omnibus Budget Reconciliation Act (“COBRA”) for up to six (6) months after termination; and • the immediate vesting of all equity awards granted on or after the effective date of the employment agreement. In the case of a Change in Control, if Mr. Olive is terminated without cause, either during the three months before or in the year after a Change in Control, then he will be entitled to receive the following payments and benefits: • a lump sum severance payment equal to: (i) the amount of base salary in effect on the date of termination that he would have otherwise received had he remained employed by the Company through the twelve (12) month anniversary of the Change in Control, and (ii) an amount equal to the average annualized bonus earned by him for the two (2) calendar years prior to the calendar year during which the Change in Control occurs, but in no event will the amount be less than his annual target bonus for the year during which the termination occurs, or if greater, his annual target bonus for the year during which the closing of the Change in Control occurs; • the immediate vesting of all equity awards granted on or after the effective date of the employment agreement; and • coverage under our group health insurance plans or payment of the full amount of health insurance premiums as provided under COBRA for up to twelve (12) months after termination. Outstanding Equity Awards at Fiscal Year-End The following table sets forth information regarding outstanding stock options and other equity awards held by each of our named executive officers as of December 31, 2023, after giving effect to the reverse stock split of the Company's common stock at a ratio of one-for-fifty: Options Awards Restricted Stock Unit Awards Grant Date Number of Securities Underlying Unexercised Options Option Exercise Price Option Expiration Date Number of shares or units of stock that have not vested (#) Market value of shares or units of stock that have not vested ($) Name Exercisable Unexercisable Michael Snavely 11/10/2023 — — — — 12,000 (1) 49,200 11/10/2023 — — — — 4,000 (1) 16,400 Russell Buyse 1/4/2023 — — — — — (2) — Troy Reisner 6/30/2023 — — — — 12,000 (2) 49,200 Chris Olive 9/16/2022 — — — — 10,000 (3) 41,000 8/31/2023 — — — — 6,260 (3) 25,666 109 (1) Mr. Snavely was granted 12,000 restricted stock units on November 10, 2023. The restricted stock units vested on February 23, 2024. Mr. Snavely was also granted 18,000 restricted stock units on November 10, 2023, of which 10,000 restricted stock units vested upon grant and 4,000 restricted stock units vested on each of November 30, 2023 and January 12, 2024. (2) Mr. Buyse was granted 29,412 restricted stock units on January 4, 2023. Mr. Buyse terminated from the Company effective October 25, 2023. In connection therewith, the Company and Mr. Buyse entered into a Confidential Transition, Consulting and General Release Agreement, in which the Company modified the vesting schedule for this grant, such that 10,000 restricted stock units vested on October 25, 2023 and 10,000 restricted stock units vested of November 30, 2023. The balance, 9,412 restricted stock units, terminated. (3) Mr. Reisner was granted 12,000 restricted stock units on June 30, 2023. One-third of the restricted stock units will vest on June 3, 2024 and one-third will vest annually in equal installments beginning on June 2, 2025 with the final vesting date occurring on June 1, 2026 (3) Mr. Olive was granted 10,000 restricted stock units on September 16, 2022. The restricted stock units vest at various rates with 2,708 restricted stock units vesting on May 8, 2023, 811 restricted stock units vesting on each of August 8, 2023 and November 8, 2023 and 810 restricted stock units vesting on each of May 8, 2024, August 8, 2024, November 8, 2024, May 8, 2025, August 8, 2025, November 8, 2025 and March 31, 2026, subject to his continued employment with the Company on each such vesting date. Mr. Olive was also granted 6,260 restricted stock units on August 31, 2023. The restricted stock units vest annually commencing on August 1, 2024, with a final vesting date of August 3, 2026. 110 Director Compensation We compensate our Board in the form of fees paid in cash. Each outside director is paid an annual cash retainer of $75,000. The chairperson of our Board is paid an additional $45,000 annually. Chairpersons on committees of our Board range from $15,000 to $25,000 of additional annual cash compensation depending on the committee, while a member of our committees is paid $7,500 to $12,500 of additional cash compensation, depending on the committee of service. There are no per-meeting attendance fees for attending our Board or committee meeting. We also compensate members of our Board in the form of annual grants of restricted stock units of our common stock. The following table sets forth certain information with respect to the compensation paid to our directors, excluding reasonable travel expenses, for the year ended December 31, 2023. Name Fees Earned or Paid in Cash ($) Stock Awards ($) (1) Total ($) Stephen Chen 100,000 — 100,000 Ryan Costello (2) 135,000 — 135,000 Eric Manlunas (3) 76,875 — 76,875 Kathy Tan Mayor (4) 86,458 — 86,458 Rahul Mewawalla 109,167 — 109,167 (1) This column reflects the aggregate grant date fair value of restricted stock units granted during 2023 computed in accordance with the provisions of ASC 718, Compensation-Stock Compensation . The assumptions that we used to calculate these amounts are discussed in the notes to Phunware’s audited consolidated financial statements for the year ended December 31, 2023. These amounts do not reflect the actual economic value that will be realized by the director upon the vesting of the restricted stock units or the sale of the common stock underlying such restricted stock units. (2) Mr. Costello resigned from our Board effective December 31, 2023 (3) Mr. Manlunas resigned from our Board effective October 1, 2023 (4) Ms. Mayor resigned from our Board effective October 26, 2023 Outstanding Equity Awards as Fiscal Year-End There were no equity awards outstanding to our non-employee directors as of December 31, 2023. Registrant's Action to Recover Erroneously Awarded Compensation We had no accounting restatements requiring the recovery of erroneously awarded compensation as of December 31, 2023. 111 Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters. Securities Authorized for Issuance Under Equity Compensation Plans The following table sets forth our equity compensation plan information as of December 31, 2023 after giving effect to the reverse stock split of the Company's common stock at a ratio of one-for-fifty: Number of securities to be issued upon exercise of outstanding options and rights (a) Weighted-average exercise price of outstanding options and rights (b) Number of securities remaining available for issuance under equity compensation plans (c) Equity compensation plans approved by security holders (1) 17,118 (2) $42.04 (3) 107,942 Equity compensation plans not approved by security holders (4) — (5) $— (3) 9,412 (1) The following plans have been approved by the Company's stockholders: 2009 Equity Incentive Plan (the "2009 Plan"), 2018 Equity Incentive Plan (the "2018 Plan") and 2018 Employee Stock Purchase Plan (the "2018 ESPP"). (2) The 2009 Plan terminated on December 26, 2018. The shares reserved for issuance under the 2009 Plan that expire or otherwise terminate without having been exercised in full and shares of common stock issued pursuant to awards granted under the 2009 Plan that are forfeited to or repurchased by us may be added to the 2018 Plan. The 2009 Plan will continue to govern outstanding awards granted thereunder. As of December 31, 2023, the maximum number of shares of common stock that may be added to the 2018 Plan pursuant to the foregoing is equal to 14,618, which is not included in the column (c) above. In addition the foregoing, excludes unvested restricted stock unit awards granted. As of December 31, 2023, 96,808 restricted stock unit awards were outstanding in the 2018 Plan. (3) As there is no exercise price associated with the restricted share awards, such shares are not included in the weighted-average price calculation. (4) The following plans were adopted by the Company's Board without requiring stockholder approval pursuant to Nasdaq Listing Rule 5635(c)(4): 2022 Inducement Plan, 2023 Inducement Plan and 2023B Inducement Plan (5) Excludes unvested restricted stock unit awards granted. As of December 31, 2023, 24,000 restricted stock unit awards were outstanding in equity compensation plans not approved by security holders. The number of shares of Common Stock reserved and available for issuance under the 2018 Plan is subject to an automatic annual increase on each January 1st, by an amount equal to five percent (5%) of the number of shares of Common Stock issued and outstanding on the immediately preceding December 31st or such lesser number of shares of Common Stock as approved by the Administrator (as defined in the 2018 Plan). The number of shares of Common Stock reserved and available for issuance under the 2018 ESPP is subject to an automatic annual increase on each January 1st, by the lesser of (i) 16,377 shares of Common Stock, (ii) one and one-half percent (1.5%) of the number of shares of Common Stock issued and outstanding on the immediately preceding December 31st, or (iii) such lesser number of shares of Common Stock as determined by the Administrator (as defined in the 2018 ESPP). For additional information on the Company's equity compensation plans, refer to Note 13 " Stock-Based Compensation" of the notes to the consolidated financial statements included in Part II, Item 8 of this Annual Report on Form 10-K. 112 Beneficial Ownership of Principal Shareholders and Management The following table sets forth information with respect to the beneficial ownership of our common stock as of February 20, 2024, for: • each stockholder known to us to be beneficial owner of more than 5% of our outstanding shares of common stock; • each of our directors and director nominees; • each of our named executive officers; and • all of our current directors, director nominees and executive officers as a group. We have determined beneficial ownership in accordance with the rules of the SEC and the information is not necessarily indicative of beneficial ownership for any other purpose. Unless otherwise indicated below, to our knowledge, the persons and entities named in the table have sole voting and sole investment power with respect to all shares that they beneficially own, subject to community property laws where applicable. Effective February 27, 2023, we implemented a reverse stock split of outstanding shares of our common stock at a ratio of one for fifty, Applicable percentage ownership is based on 8,027,082 shares of our common stock outstanding as of February 20, 2024. In computing the number of shares of our common stock beneficially owned by a person and the percentage ownership of that person, we included outstanding shares of our common stock subject to options or restricted stock units held by that person that are currently exercisable or releasable or that will become exercisable or releasable within 60 days of February 20, 2024. We did not include these shares as outstanding, however, for the purpose of computing the percentage ownership of any other person. Unless otherwise indicated, the address of each beneficial owner listed on the table below is c/o Phunware, Inc., 1002 West Avenue, Austin, Texas 78701. Name of Beneficial Owner (1) Shares Percentage Named Executive Officers, Executive Officers and Directors: Michael Snavely 11,543 0.1% Troy Reisner — —% Chris Olive 3,794 —% Stephen Chen 2,095 —% Elliot Han — —% Rahul Mewawalla 4,576 0.1% All executive officers and directors as a group (6 persons) 22,008 0.2% (1) Unless otherwise indicated, we believe that all persons named in the table have sole voting and investment power with respect to all ordinary shares beneficially owned by them. 113 Item 13. Certain Relationships and Related Transactions, and Director Independence. Policy for Related Person Transactions We have adopted a formal written policy providing that our executive officers, directors, nominees for election as directors, beneficial owners of more than 5% of any class of our capital stock, any member of the immediate family of any of the foregoing persons and any firm, corporation or other entity in which any of the foregoing persons is employed or is a general partner or principal or in a similar position or in which such person has a 5% or greater beneficial ownership interest, are not permitted to enter into a related party transaction with us without the approval of our nominating and corporate governance committee, subject to the exceptions described below. A related person transaction is a transaction, arrangement or relationship, or any series of similar transactions, arrangements or relationships, in which we and any related person are, were or will be participants in which the amount involves exceeds $120,000. Transactions involving compensation for services provided to the Company as an employee or director are not covered by this policy. The Board has determined that certain transactions will not require the approval of the nominating and corporate governance committee, including certain employment arrangements of executive officers, director compensation, transactions with another company at which a related party’s only relationship is as a director, non-executive employee or beneficial owner of less than 10% of that company’s outstanding capital stock, transactions where a related party’s interest arises solely from the ownership of our common stock and all holders of our common stock received the same benefit on a pro rata basis and transactions available to all employees generally. Related Person Transactions The following is a summary of our related party transactions since January 1, 2023. Confidential Transition, Consulting and General Release Agreement with Russell Buyse . On October 25, 2023, the Company entered into a Confidential Transition, Consulting and General Release Agreement with Russell Buyse. The transition agreement provided that Mr. Buyse's employment as chief executive officer terminated effective the same date. Furthermore, effective on October 26, 2023, Mr. Buyse freely and voluntarily resigned his position as a director of the Board. The Company and Mr. Buyse agreed that from the period of October 26, 2023 and continuing through November 10, 2023, Mr. Buyse would serve as a consultant to the Company. The Company and Mr. Buyse both agreed to a mutual general release, which excludes certain specified types of claims. Mr. Buyse also agreed to certain restrictive covenants, including confidentiality, non-compete and non-solicitation provisions. As compensation for his service as a consultant during the period noted above, Mr. Buyse received aggregate gross compensation of $40,000, less applicable withholdings, payable in four (4) bi-monthly installments of $10,000, beginning October 31, 2023 and concluding on December 15, 2023. The Company will also reimburse Mr. Buyse for continuation coverage under the Company's group health plan in accordance with COBRA through March 31, 2024. During the course of his employment with the Company, Mr. Buyse was awarded a grant of restricted stock units. As of the October 25, 2023, Mr. Buyse had approximately 29,412 unvested restricted stock units (adjusted for reverse stock split) pursuant to the grant with original vesting commencing on December 28, 2023 and concluding on December 28, 2025. As additional compensation under the transition agreement, the Company modified the vesting schedule with respect to the unvested portion of Mr. Buyse's restricted stock unit award, such that 10,000 restricted stock units vested on October 25, 2023 and 10,000 restricted stock units vested of November 30, 2023. The balance, 9,412 restricted stock units terminated. Confidential Transition, Consulting and General Release Agreement with Matt Aune . On June 2, 2023, the Company entered into a Confidential Transition, Consulting and General Release Agreement with Matt Aune. The separation agreement with Mr. Aune provided that he would cease as the Company’s Chief Financial Officer as of June 2, 2023 and his employment terminated with the Company effective June 30, 2023. The Company and Mr. Aune agreed that from the period of the July 1, 2023 and continuing through December 31, 2023, Mr. Aune would provide certain additional transitional services to the Company. In exchange for Mr. Aune's performance of obligations to the Company under the terms of the separation agreement, including a general release of claims which excludes certain specified types of claims, Mr. Aune received severance consisting of (i) six months of his continued base salary (in the aggregate amount of $175,000), which commenced on July 1, 2023 and concluded on December 31, 2023, in bi-monthly installments and in accordance with the Company’s general payroll policies, 114 less applicable taxes and withholdings, (ii) the Company paid continuation coverage under the Company’s group health plan in accordance with COBRA for Mr. Aune, his spouse and his dependents, through December 31, 2023, and (iii) accelerated vesting of 2,647 restricted stock units (adjusted for reverse stock split), which vested on June 30, 2023. In exchange for Mr. Aune’s continued service as an advisor through December 31, 2023, Mr. Aune received accelerated vesting of any then-remaining unvested restricted stock units on December 31, 2023. Confidential Separation and General Release Agreement with Matt Lull . On May 30, 2023, the Company entered into a Confidential Separation and General Release Agreement with Matt Lull. The separation agreement provides that Mr. Lull's employment with the Company terminated effective May 29, 2023. The Company and Mr. Lull agreed that from the period of May 29, 2023 and continuing through August 31, 2023, Mr. Lull would serve as a special advisor to the Company. The Company and Mr. Lull both agreed to a mutual general release, which excludes certain specified types of claims. Mr. Lull also agreed to certain restrictive covenants, including confidentiality, non-compete and non-solicitation provisions. As compensation for his service as a special advisor, Mr. Lull received aggregate gross cash compensation of $105,000, less applicable withholdings, of which $50,000 was paid on June 15, 2023, $12,500 was paid on each of July 15, 2023 and August 15, 2023 and $7,500 was payable in monthly installments beginning on September 15, 2023 and concluding on December 15, 2023. The Company also reimbursed Mr. Lull for continuation coverage under the Company's group health plan in accordance with COBRA through December 31, 2023. As additional compensation under the separation agreement, the Company accelerated the vesting of 4,375 restricted stock units (adjusted for reverse stock split), which vested on June 1, 2023, and 2,917 unvested restricted stock units (adjusted for reverse stock split), terminated in accordance with the Company's 2018 Equity Incentive Plan. Confidential Transition, Consulting and General Release Agreement with Alan Knitowski . On December 13, 2022, the Company entered into a Confidential Transition, Consulting and General Release Agreement with Alan Knitowski. The transition agreement provides that Mr. Knitowski's employment terminated effective on the December 27, 2022. Furthermore, effective on December 27, 2022, Mr. Knitowski freely and voluntarily resigned his position as a director of the Board. The Company and Mr. Knitowski agreed that from the period of December 27, 2022 and continuing through December 31, 2023, Mr. Knitowski would serve as a special advisor to the Company. The Company and Mr. Knitowski both agreed to a mutual general release, which excludes certain specified types of claims. Mr. Knitowski also agreed to certain restrictive covenants, including confidentiality, non-compete and non-solicitation provisions. As compensation for his service as a special advisor during the period noted above, Mr. Knitowski received aggregate gross compensation of $225,000, less applicable withholdings, paid in twelve (12) monthly installments of $18,750, beginning January 31, 2023. The monthly installment payments were made in the form of cash and issuance of common stock of the Company. The Company also reimbursed Mr. Knitowski for continuation coverage under the Company's group health plan in accordance with COBRA through December 31, 2023. During the course of his employment with the Company, Mr. Knitowski was awarded a certain number of grants of restricted stock units. As of the December 27, 2022, Mr. Knitowski had approximately 9,466 unvested restricted stock units (adjusted for reverse stock split), under multiple awards, each of which contained various vesting share amounts on various dates, with the last vesting period scheduled to occur in May 2025. As additional compensation under the transition agreement, the Company modified the vesting schedule with respect to the unvested portion of Mr. Knitowski's restricted stock units, such that 789 restricted stock units vested on each of the last day of each month from January 2023 through December 2023. Director Independence Our common stock is listed on Nasdaq. Under the rules of Nasdaq, independent directors must comprise a majority of a listed company’s board of directors. In addition, the rules of Nasdaq require that, subject to specified exceptions, each member of a listed company’s audit, compensation, and nominating and corporate governance committees be independent. Under the rules of Nasdaq, a director will only qualify as an “independent director” if, in the opinion of that company’s board of directors, that person does not have a relationship that would interfere with the exercise of independent judgment in carrying out the responsibilities of a director. Audit committee members must also satisfy the independence criteria set forth in Rule 10A-3 under the Exchange Act. Compensation committee members must also satisfy the independence criteria set forth in Rule 10C-1 under the Exchange Act. In order to be considered independent for purposes of Rule 10A-3 and Rule 10C-1, a member of an audit committee or compensation committee of a listed company may not, other than in his or her capacity as a member of the committee, the board of directors, or any other board committee: (1) accept, directly or indirectly, any consulting, advisory, or other 115 compensatory fee from the listed company or any of its subsidiaries; or (2) be an affiliated person of the listed company or any of its subsidiaries. We have undertaken a review of the independence of each director and considered whether each director has a material relationship with us that could compromise his or her ability to exercise independent judgment in carrying out his or her responsibilities. As a result of this review, we determined that Messrs. Stephen Chen, Elliott Han and Rahul Mewawalla, representing three of our four directors, are considered “independent directors” as defined under the applicable rules and regulations of the SEC and the listing requirements and rules of Nasdaq. Board Leadership Structure / Lead Independent Director We believe that the structure of our Board and Board committees provides strong overall management. The Chair of our Board and our Chief Executive Officer roles are separate. Mr. Snavely serves as our Chief Executive Officer and Stephen Chen serves as Chair of our Board. This structure enables each person to focus on different aspects of company leadership. Our Chief Executive Officer is responsible for setting the strategic direction of our company, the general management and operation of the business and the guidance and oversight of senior management. The Chair of our Board monitors the content, quality and timeliness of information sent to our Board and is available for consultation with our Board regarding the oversight of its business affairs. Our independent directors bring experience, oversight and expertise from outside of Phunware, while Mr. Snavely brings company-specific experience and expertise. Limitation on Liability and Indemnification Matters As permitted under Delaware law, our certificate of incorporation and amended and restated bylaws provide that we will indemnify our directors and officers and may indemnify our employees and other agents, to the fullest extent permitted by Delaware law. Delaware law prohibits our certificate of incorporation from limiting the liability of our directors for any of the following: • any breach of a director’s duty of loyalty to us or to our stockholders; • acts or omissions not in good faith or that involve intentional misconduct or a knowing violation of law; • unlawful payment of dividends or unlawful stock repurchases or redemptions; and • any transaction from which a director derived an improper personal benefit. If Delaware law is amended to authorize corporate action further eliminating or limiting the personal liability of a director, then the liability of our directors will be eliminated or limited to the fullest extent permitted by Delaware law, as so amended. Our certificate of incorporation will not eliminate a director’s duty of care and, in appropriate circumstances, equitable remedies, such as injunctive or other forms of non-monetary relief, remain available under Delaware law. This provision also will not affect a director’s responsibilities under any other laws, such as the federal securities laws or other state or federal laws. Under our amended and restated bylaws, we will also be empowered to purchase insurance on behalf of any person whom we are required or permitted to indemnify. In addition to the indemnification required in our certificate of incorporation and amended and restated bylaws, we have entered into an indemnification agreement with each member of our board of directors. These agreements provide for the indemnification of our directors, officers and some employees for certain expenses and liabilities incurred in connection with any action, suit, proceeding or alternative dispute resolution mechanism, or hearing, inquiry or investigation that may lead to the foregoing, to which they are a party, or are threatened to be made a party, by reason of the fact that they are or were a director, officer, employee, agent or fiduciary of our company, or any of our subsidiaries, by reason of any action or inaction by them while serving as a director, officer, employee, agent or fiduciary, or by reason of the fact that they were serving at our request as a director, officer, employee, agent or fiduciary of another entity. In the case of an action or proceeding by or in the right of our company or any of our subsidiaries, no indemnification will be provided for any claim where a court determines that the indemnified party is prohibited from receiving indemnification. We believe that these charter and bylaw provisions and indemnification agreements are necessary to attract and retain qualified persons as directors and officers. The limitation of liability and indemnification provisions in our certificate of incorporation and amended and restated bylaws may discourage stockholders from bringing a lawsuit against directors for breach of their fiduciary duties. They may also reduce the likelihood of derivative litigation against directors and officers, even though an action, if successful, might benefit us and our stockholders. Moreover, a stockholder’s investment may be harmed to the extent we pay the costs of settlement and damage awards against directors and officers pursuant to these indemnification provisions. Insofar as indemnification for liabilities arising under the Securities Act may be permitted to our directors, officers and controlling persons pursuant to the foregoing provisions, or otherwise, we have been advised that, in the opinion of the SEC, such 116 indemnification is against public policy as expressed in the Securities Act and is, therefore, unenforceable. There is no pending litigation or proceeding naming any of our directors or officers as to which indemnification is being sought, nor are we aware of any pending or threatened litigation that may result in claims for indemnification by any director or officer. 117 Item 14. Principal Accounting Fees and Services. Principal Accountant Fees and Services The following table sets forth aggregate fees billed to the Company for professional services by our independent registered public accounting firm, Marcum LLP for the fiscal years ended December 31, 2023 and 2022: 2023 2022 Audit Fees (1) $ 321,672 $ 338,815 Audit-related Fees (2) 39,140 102,485 Tax Fees (3) — — All Other Fees (4) — — Total Fees $ 360,812 $ 441,300 (1) “Audit Fees” consist of fees for professional services rendered in connection with the audit of our annual consolidated financial statements, including audited financial statements presented in our annual report on Form 10-K, review of our quarterly financial statements presented in our quarterly report on Form 10-Q and services that are normally provided by our independent registered public accounting firm in connection with statutory and regulatory filings or engagements for those fiscal years, including audit services in connection with filing registration statements, and amendments thereto. (2) “Audit-related Fees” consist of fees related to audit and assurance procedures not otherwise included in Audit Fees, including fees related to the application of GAAP to proposed transactions and new accounting pronouncements. (3) “Tax Fees” consist of tax return preparation, international and domestic tax studies, consulting and planning. (4) “All Other Fees” consist of the cost of a subscription to an accounting research tool. Audit Committee Pre-Approval Our Audit Committee pre-approves all auditing services and permitted non-audit services to be performed for us by our independent auditor, including the fees and terms thereof. All of the services described above were approved by our Audit Committee. 118 Table of Contents PART IV Item 15. Exhibits, Financial Statement Schedules. (a) The following documents are filed as part of this Annual Report: (1) Consolidated Financial Statements Our Consolidated Financial Statements are listed in the " Index to the Consolidated Financial Statements " under Part II, Item 8 of this Annual Report on Form 10-K. (2) Financial Statements Schedule All financial statement schedules are omitted because they are not applicable or the amounts are immaterial and not required, or the required information is presented in the Consolidated Financial Statements or notes thereto included in Part II, Item 8 "Financial Statements and Supplementary Data" of this Annual Report on Form 10-K. (3) Exhibits We hereby file as part of this Report the exhibits listed in the attached Exhibit Index. Exhibits which are incorporated herein by reference can be inspected and copied at the public reference facilities maintained by the SEC, 100 F Street, N.E., Room 1580, Washington D.C. 20549. Copies of such material can also be obtained from the Public Reference Section of the SEC, 100 F Street, N.E., Washington, D.C. 20549, at prescribed rates or on the SEC website at www.sec.gov. EXHIBIT INDEX Exhibit No. Description 3.1 Certificate of Incorporation of the Registrant (Incorporated by reference to Exhibit 3.1 of the Registrant’s Form 8-K (File No. 001-37862), filed with the SEC on January 2, 2019). Restated Certificate of Incorporation of the Registrant (Incorporated by reference to Exhibit 3.1 of the Registrant’s Form 8-K (File No. 001-37862), filed with the SEC on January 2, 2019). 3.2 Amended and Restated Bylaws of the Registrant (Incorporated by reference to Exhibit 3.1 of the Registrant’s Form 8-K (File No. 001-37862), filed with the SEC on November 4, 2022). 3.3 Certificate of Designation (Incorporated by reference to Exhibit 3.3 of the Registrant’s Form 8-K (File No. 001-37862) filed with the SEC on January 2, 2019). 3.4 Certificate of Amendment to the Certificate of Incorporation filed February 23, 2024 (Inccorporated by reference to Exhibit 3.1 of the Registrant's Form 8-K (File No. 00-37862) filed with the SEC on February 28, 2024.) 4.1 Specimen common stock certificate of the Registrant (Incorporated by reference to Exhibit 4.3 of Stellar’s Form S-4/A (File No. 333-224227), filed with the SEC on November 6, 2018). 4.2 Description of Securities (Incorporated by reference to Exhibit 4.15 of the Registrant's Form 10-K (File No. 001-37862), filed with the SEC on March 31, 2021). 10.1+ Phunware, Inc. 2018 Equity Incentive Plan, Amended and Restated as of November 11, 2022 (Incorporated by reference to Annex A of the Registrant's Schedule 14A (File No. 001-37862), filed with the SEC on August 31, 2022). 10.2+ Phunware, Inc. 2018 Employee Stock Purchase Plan (Incorporated by reference to Annex E of the Registrant’s Form S-4/A (File No. 333-224227), filed with the SEC on November 13, 2018). 10.3+ Phunware, Inc. 2009 Equity Incentive Plan (Incorporated by reference to Exhibit 10.15 of the Registrant’s Form S-4 (File No. 333-224227), filed with the SEC on April 11, 2018). 10.4 Form of Token Rights Agreement (Incorporated by reference to Exhibit 10.23 of the Registrant’s Form S-4/A (File No. 333-224227), filed with the SEC on October 2, 2018). 10.5 Form of Purchase Agreement (Incorporated by reference to Exhibit 10.1 of the Registrant's Form 8-K (File No. 001-37862) filed with the SEC on June 5, 2019). 10.6 Form of Cryptocurrency Payment Agreement (Incorporated by reference to Exhibit 10.2 of the Registrant's Form 8-K (File No. 001-37862) filed with the SEC on June 5, 2019). 10.7 Form of Cryptocurrency Payment Agreement (Incorporated by reference to Exhibit 10.2 of the Registrant's Form 8-K (File No. 001-37862) filed with the SEC on November 21, 2019). 119 Table of Contents 10.11 Standard office lease dated July 16, 2019, between the Company and BRE CA Office Owner, LLC (Incorporated by reference to Exhibit 10.3 of the Registrant's Form 10-Q (File No. 001-37862), filed with the SEC on August 13, 2019). 10.12 Office Sublease between the Company and Bangarang Enterprises LLC d/b/a Gander Group dated effective as of March 16, 2021 (Incorporated by Reference to Exhibit 10.1 of the Registrant's Form 8-K filed with the SEC on March 19, 2021). 10.13+ Employment Agreement between the Registrant and Alan Knitowski (Incorporated by reference to Exhibit 10.2 of the Registrant’s Form 8-K (File No. 001-37862), filed with the SEC on January 2, 2019). 10.14+ Employment Agreement between the Registrant and Matt Aune (Incorporated by reference to Exhibit 10.3 of the Registrant’s Form 8-K (File No. 001-37862), filed with the SEC on January 2, 2019). 10.15+ Employment Agreement between the Registrant and Randall Crowder (Incorporated by reference to Exhibit 10.4 of the Registrant’s Form 8-K (File No. 001-37862), filed with the SEC on January 2, 2019). 10.16+ Employment Agreement between the Registrant and Luan Dang (Incorporated by reference to Exhibit 10.6 of the Registrant’s Form 8-K (File No. 001-37862), filed with the SEC on January 2, 2019). 10.17 At Market Issuance Sales Agreement by and between Phunware, Inc. and HC Wainwright & Co., LLC dated January 31, 2022 (Incorporated by reference to Exhibit 1.2 of the Registrant's Form S-3 (File No. 333-262461) filed with the SEC on February 1, 2022). 10.18 Note Purchase Agreement dated October 15, 2021, between Phunware, Inc. and Streeterville Capital, LLC (incorporated by reference to Exhibit 10.1 of the Registrant's Form 8-K filed with the SEC on October 19, 2021). 10.19 Lease Agreement, dated March 15, 2022, between Phunware, Inc. and Jonsson ATX Warehouse, LLC (Incorporated by reference to Exhibit 10.1 of the Registrant's Form 8-K (File No. 001-37862) filed with the SEC on March 18, 2022). 10.20 Lease Termination Agreement, dated November 9, 2023, between Phunware, Inc. and Jonsson ATX Warehouse, LLC (Incorporated by reference to Exhibit 10.5 of the Registrant's Form 10 - Q (File No. 001-37862) filed with the SEC on November 13, 2023.) 10.21 Lease Agreement, dated June 3, 2022, between Phunware, Inc. and ATX Acquisitions, LLC (Incorporated by reference to Exhibit 10.1 of the Registrant's Form 8-K (File No. 001-37862) filed with the SEC on June 10, 2020). 10.22 Note Purchase Agreement, dated July 6, 2022, between Phunware, Inc. and Streeterville Capital, LLC (Incorporated by reference to Exhibit 10.1 of the Registrant's Form 8-K (File No. 001-37862) filed with the SEC on June 8, 2022). 10.23 Promissory Note, dated July 6, 2022, between Phunware, Inc. and Streeterville Capital, LLC (Incorporated by reference to Exhibit 10.1 of the Registrant's Form 8-K (File No. 001-37862) filed with the SEC on June 8, 2022). 10.24+ Amendment No. 1 to Employment Agreement by and between Phunware, Inc. and Matt Aune (Incorporated by reference to Exhibit 10.1 of the Registrant's Form 8-K (File No.001-37862) filed with the SEC on September 30, 2022). 10.25+ Amendment No. 1 to Employment Agreement by and between Phunware, Inc. and Randall Crowder (Incorporated by reference to Exhibit 10.2 of the Registrant's Form 8-K (File No.001-37862) filed with the SEC on September 30, 2022). 10.26+ Amended and Restated Employment Agreement by and between Phunware, Inc. and Matt Lull (Incorporated by reference to Exh i bit 10.44 of the Registrant's Form 10- K (File no. 001-37862), filed with the SEC on March 31, 2023) . 10.27+ Amended and Restated Employment Agreement by and between Phunware, Inc. and Chris Olive (Incorporated by reference to Exhibit 10.45 of the Registrants Form 10-K ( File No. 001 -37862 ), filed with the SEC on M arch 31, 2023 ) . 10.28+ Confidential Executive Employment Agreement by and between Phunware, Inc. and Russell Buyse dated November 11, 2022 (Incorporated by reference to Exhibit 10.1 of the Registrant's Form 8-K (File No. 001-37862) filed with the SEC on November 14, 2022). 10.29+ Confidential Transition, Consulting and General Release Agreement by and between Phunware, Inc. and Alan S. Knitowski executed on December 13, 2022 (Incorporated by reference to Exhibit 10.1 of the Registrant's Form 8-K (File No. 001-37862) filed with the SEC on December 16, 2022). 10.30+ Phunware, Inc. 2022 Inducement Plan (Incorporated by reference to Exhibit 10.1 of the Registrant's Form 8-K (File No. 001-37862), filed with the SEC on January 6, 2023). 10.31+ Phunware, Inc. 2023 Inducement Plan (Incorporated by reference to Exhibit 10.6 of the Registrant's Form 10-Q (File No. 001-37862) filed with the SEC on Nov em ber 13, 2023 ). 10.32+* Phunware, Inc. 2023B Inducement Plan. 120 Table of Contents 10.33+ Confidential Employment Agreement by and between Phunware, Inc. and Troy Reisner dated June 2, 2023 (Incorporated by reference to Exhibit 10.1 of the Registrant's Form 8-K (File No. 001-37862), filed with the SEC on June 2, 2023). 10.34+ Confidential Separation, Transition, and General Release Agreement by and between Phunware, Inc. and Matt Aune dated June 2, 2023. (Incorporated by reference to Exhibit 10.1 of the Registrant's Form 8-K (File No. 001-37862), filed with the SEC on June 8, 2023). 10.35 Purchase Agreement, dated August 22, 2023, by and between Phunware, Inc. and Lincoln Park Capital Fund, LLC (Incorporated by reference to Exhibit 10.1 of the Registrant's Form 8-K (File No. 001-37862), filed with the SEC on August 23, 2023). 10.36 Registration Rights Agreement, dated as of August 22, 2023, by and between Phunware, Inc. and Lincoln Park Capital Fund, LLC (Incorporated by reference to Exhibit 10.2 of the Registrant's Form 8-K (File No. 001-37862), filed with the SEC on August 23, 2023). 10.37+ Confidential Employment Agreement by and between Phunware, Inc. and Mike Snavely dated September 5, 2023 (Incorporated by reference to Exhibit 10.1 of the Registrant's Form 8-K (File No. 001-37862), filed with the SEC on September 8, 2023). 10.38+ Confidential Separation, Consulting and General Release Agreement by and between Phunware, Inc. and Russell Buyse dated October 25, 2023 (Incorporated by reference to Exhibit 10.1 of the Registrant's Form 8-K (File No. 001-37862), filed with the SEC on October 26, 2023). 10.39+ Confidential Employment Agreement by and between Phunware, Inc. and Mike Snavely dated October 25, 2023 (Incorporated by reference to Exhibit 10.2 of the Registrant's Form 8-K (File No. 001-37862), filed with the SEC on October 26, 2023). 10.40 Acknowledgement and Agreement effective December 6, 2023 by and between Phunware, Inc. and Streeterville Capital, LLC. (Incorporated by reference to Exhibit 10.4 of the Registrant's Form 8-K (File No. 001-37862), filed with the SEC on December 6, 2023). 10.41 Form of Securities Purchase Agreement dated as of December 7, 2023 (Incorporated by reference to Exhibit 10.1 of the Registrant's Form 8-K (File No. 001-37862), filed with the SEC on December 11, 2023). 10.42 Placement Agency Agreement dated December 7, 2023, by and between Phunware, Inc. and Roth Capital Partners, LLC (Incorporated by reference to Exhibit 10.2 of the Registrant's Form 8-K (File No. 001-37862), filed with the SEC on December 11, 2023). 10.43 Form of Securities Purchase Agreement dated as of January 16, 2024 (Incorporated by reference to Exhibit 10.1 of the Registrant's Form 8-K (File No. 001-37862), filed with the SEC on January 18, 2024). 10.44 Placement Agency Agreement dated January 16, 2024, by and between Phunware, Inc. and Roth Capital Partners, LLC (Incorporated by reference to Exhibit 10.2 of the Registrant's Form 8-K (File No. 001-37862), filed with the SEC on January 18, 2024). 10.45 Form of Securities Purchase Agreement dated as of January 18, 2024 (Incorporated by reference to Exhibit 10.1 of the Registrant's Form 8-K (File No. 001-37862), filed with the SEC on January 23, 2024). 10.46 Placement Agency Agreement dated January 16, 2024, by and between Phunware, Inc. and Roth Capital Partners, LLC (Incorporated by reference to Exhibit 10.2 of the Registrant's Form 8-K (File No. 001-37862), filed with the SEC on January 23, 2024). 10.47 Form of Securities Purchase Agreement dated as of February 7, 2024 (Incorporated by reference to Exhibit 10.1 of the Registrant's Form 8-K (File No. 001-37862), filed with the SEC on February 9, 2024). 10.48 Placement Agency Agreement dated February 7, 2024, by and between Phunware, Inc. and Roth Capital Partners, LLC (Incorporated by reference to Exhibit 10.2 of the Registrant's Form 8-K (File No. 001-37862), filed with the SEC on February 9, 2024). 14.1 Code of Business Conduct and Ethics as of December 26, 2018 (Incorporated by reference to Exhibit 14.1 of the Registrant's Form 10-K (File No. 001-37862), filed with the SEC on March 20, 2019). 21.1* List of Subsidiaries of the Registrant. 23.1* Consent of Independent Registered Public Accounting Firm. 24.1* Power of Attorney (contained in signature page to this Annual Report on Form 10-K). 31.1* Certification of the Principal Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. 31.2* Certification of the Principal Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. 32.1** Certification of the 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* Executive Incentive Compensation Recoupment Policy 101.INS XBRL Instance Document* 101.SCH XBRL Taxonomy Extension Schema* 101.CAL XBRL Taxonomy Calculation Linkbase* 121 Table of Contents 101.LAB XBRL Taxonomy Label Linkbase* 101.PRE XBRL Definition Linkbase Document* 101.DEF XBRL Definition Linkbase Document* 104 Cover Page Interactive Data File* * Filed herewith ** Furnished herewith + Indicates a management contract or compensatory plan or arrangement Item 16. Form 10–K Summary. None. 122 SIGNATURES Pursuant to the requirements of Section 13 or 15(d) of the Securities Act of 1934, the Registrant has duly caused this Annual Report to be signed on its behalf by the undersigned, thereunto duly authorized. PHUNWARE, INC. Date: March 15, 2024 By: /s/ Michael Snavely Title: Chief Executive Officer (Principal Executive Officer) Date: March 15, 2024 By: /s/ Troy Reisner Title: Chief Financial Officer (Principal Accounting and Financial Officer) POWER OF ATTORNEY KNOW ALL PERSONS BY THESE PRESENTS, that each person whose signature appears below hereby constitutes and appoints Michael Snavely and Troy Reisner, and each of them, as his or her true and lawful attorney-in-fact and agent with full power of substitution, for him or her in any and all capacities, to act on, 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 attorney-in-fact, proxy, and agent 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 for all intents and purposes as he or she might or could do in person, hereby ratifying and confirming all that said attorney-in-fact, proxy and agent, or his substitute, may lawfully do or cause to be done by virtue hereof. Pursuant to the requirements of the Securities Exchange Act of 1934, this Annual Report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated. Signature Title Date /s/ Michael Snavely Chief Executive Officer and Director March 15, 2024 Michael Snavely (Principal Executive Officer) /s/ Troy Reisner Chief Financial Officer March 15, 2024 Troy Reisner (Principal Accounting and Financial Officer) /s/ Stephen Chen Director March 15, 2024 Stephen Chen /s/ Elliot Han Director March 15, 2024 Elliot Han /s/ Rahul Mewawalla Director March 15, 2024 Rahul Mewawalla 123