Vivid Seats Inc. 10-K

Item 9A. Controls and Procedures Limitations on Effectiveness of Disclosure Controls and Procedures 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 Disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended (the “Exchange Act”)) are designed to ensure that information required to be disclosed in reports filed or submitted under the Exchange Act is recorded, processed, summarized, and reported within the time periods specified in the SEC rules and forms, and that such information is accumulated and communicated to management, including our Chief Executive Officer and Chief Financial Officer, to allow timely decisions regarding required disclosures. Our management, with the participation of our principal executive officer and principal financial officer, has evaluated the effectiveness of our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act), as of the end of the period covered by this Annual Report on Form 10-K. Based on such evaluation, our principal executive officer and principal financial officer have concluded that our disclosure controls and procedures were not effective at reasonable assurance levels as of December 31, 2022 due to the reasons described below. Material Weakness In connection with the audit of our consolidated financial statements as of December 31, 2022 and 2021, we identified a material weakness in our internal control over financial reporting related to the implementation of segregation of duties as part of our control activities, establishment of clearly defined roles within our finance and accounting functions and the number of personnel in our finance and accounting functions with an appropriate level of technical accounting and SEC reporting experience, which in the aggregate, constitute a material weakness. Remediation Activities As part of our plan to remediate this material weakness, we are performing a full review of our internal control procedures. We have implemented, and plan to continue to implement, new controls and new processes. We have hired and plan to continue to hire additional qualified personnel and establish more robust processes to support our internal control over financial reporting, including clearly defined roles and responsibilities and appropriate segregation of duties. During the year ended December 31, 2022, we made progress in our remediation of the material weakness. While progress has been made to enhance our internal control, additional time is required to complete implementation and to assess and ensure the sustainability of these controls. The material weakness will not be considered remediated until the applicable controls operate for a sufficient period of time and management has concluded, through testing, that these controls are operating effectively. Management's Annual Report on Internal Control over Financial Reporting This Annual Report on Form 10-K does not include a report of management’s assessment regarding our internal control over financial reporting (as defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act) or an attestation report of our independent registered accounting firm due to a transition period established by rules of the SEC for newly public companies. Additionally, our independent registered accounting firm will not be required to opine on 101 the effectiveness of our internal control over financial reporting pursuant to Section 404 until we are no longer an “emerging growth company” as defined in the JOBS Act. Changes in Internal Control over Financial Reporting There were no changes in our internal control over financial reporting (as defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act) during the fiscal quarter ended December 31, 2022 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting. Item 9B. Other Information None. Item 9C. Disclosure Regarding Foreign Jurisdictions that Prevent Inspections None. PART III ITEM 10. Directors, Executive Officers and Corporate Governance Information about our directors and executive officers is reported in Part I of this Form 10-K under the heading, “Item 1. Business". All other information required by this item will be included in our Proxy Statement for the 2023 Annual Meeting of Stockholders and is incorporated herein by reference. ITEM 11. Executive Compensation The information required by this item will be included in our Proxy Statement for the 2023 Annual Meeting of Stockholders and is incorporated herein by reference. ITEM 12. Security Ownership of Certain Beneficial Owners And Management And Related Stockholder Matters The information required by this item will be included in our Proxy Statement for the 2023 Annual Meeting of Stockholders and is incorporated herein by reference. ITEM 13. Certain Relationships and Related Transactions, and Director Independence The information required by this item will be included in our Proxy Statement for the 2023 Annual Meeting of Stockholders and is incorporated herein by reference. ITEM 14. Principal Accountant Fees and Services The information required by this item will be included in our Proxy Statement for the 2023 Annual Meeting of Stockholders and is incorporated herein by reference. PART IV Item 15. Exhibits, Financial Statement Schedules (a)(1) Financial Statements. The financial statements required by this item are listed in Item 8. (a)(2) Financial Statement Schedules. All financial statement schedules have been omitted because they are not applicable, not required or the information required is shown in the financial statements or the notes thereto. (a)(3) Exhibits. 102 The following is a list of exhibits filed as part of this Annual Report on Form 10-K. Exhibits Incorporated by Reference Exhibit Number Description Form Exhibit Filing Date Filed / Furnished Herewith 2.1 Transaction Agreement dated April 21, 2021 among Horizon Acquisition Corporation, Horizon Sponsor, LLC, Hoya Topco, LLC, Hoya Intermediate, LLC and Vivid Seats Inc. S-4 2.1 05/28/2021 2.2 Purchase, Sale and Redemption Agreement dated April 21, 2021 among Hoya Topco, LLC, Hoya Intermediate, LLC, Vivid Seats Inc., Crescent Mezzanine Partners VIB, L.P., Crescent Mezzanine Partners VIC, L.P., NPS/Crescent Strategic Partnership II, LP, CM7C VS Equity Holdings, LP, Crescent Mezzanine Partners VIIB, L.P., CM6B Vivid Equity, Inc., CM6C Vivid Equity, Inc., CM7C VS Equity, LLC, CM7B VS Equity, LLC, Crescent Mezzanine Partners VI, L.P., Crescent Mezzanine Partners VII, L.P., Crescent Mezzanine Partners VII (LTL), L.P., CBDC Universal Equity, Inc., Crescent Capital Group, LP and Horizon Acquisition Corporation S-4 2.2 05/28/2021 2.3 Plan of Merger dated October 18, 2021 among Horizon Acquisition Corporation, Horizon Sponsor, LLC, Hoya Topco, LLC, Hoya Intermediate, LLC and Vivid Seats Inc. 10-Q 2.3 11/15/2021 3.1 Amended and Restated Certificate of Incorporation 8-K 3.1 10/22/2021 3.2 Amended and Restated Bylaws. 8-K 3.2 10/22/2021 4.1 Amended and Restated Warrant Agreement dated October 14, 2021 between Horizon Acquisition Corporation and Continental Stock Transfer & Trust Company 8-K 10.7 10/22/2021 4.2 Specimen Class A Common Stock Certificate of Vivid Seats Inc. 10-K 4.2 3/15/2022 4.3 Specimen Warrant Certificate of Vivid Seats Inc. 10-K 4.3 3/15/2022 4.4 Description of Capital Stock 10-K 4.4 3/15/2022 10.1 Stockholders’ Agreement dated October 18, 2021 among Vivid Seats 8-K 10.1 10/22/2021 103 Inc., Hoya Topco, LLC and Horizon Sponsor, LLC 10.2 Amended and Restated Registration Rights Agreement dated October 18, 2021 among Vivid Seats Inc., Hoya Topco, LLC and Horizon Sponsor, LLC 8-K 10.2 10/22/2021 10.3 Tax Receivable Agreement dated October 18, 2021 among Vivid Seats Inc., Hoya Intermediate, LLC, GTCR Management XI, LLC, Hoya Topco, LLC and several Blocker TRA Holders 8-K 10.3 10/22/2021 10.4 Private Warrant Agreement dated October 18, 2021 between Vivid Seats Inc. and Hoya Topco, LLC 8-K 10.6 10/22/2021 10.5 Amended and Restated Warrant Agreement dated October 14, 2021 between Hoya Acquisition Corporation and Continental Stock Transfer & Trust Company 8-K 10.7 10/22/2021 10.6 Private Warrant Agreement dated October 15, 2021 between Hoya Acquisition Corporation and Continental Stock Transfer & Trust Company 8-K 10.8 10/22/2021 10.7 Private Warrant Agreement dated October 15, 2021 between Horizon Acquisition Corporation and Continental Stock Transfer & Trust Company 8-K 10.9 10/22/2021 10.8 Private Warrant Agreement ($10.00 exercise price) dated October 18, 2021 between Hoya Intermediate, LLC and Hoya Topco, LLC 8-K 10.10 10/22/2021 10.9 Private Warrant Agreement ($15.00 exercise price) dated October 18, 2021 between Hoya Intermediate, LLC and Hoya Topco, LLC 8-K 10.11 10/22/2021 10.10 Form of Subscription Agreement S-4/A 10.4 10/22/2021 10.11# Form of Indemnification Agreement 8-K 10.5 10/22/2021 10.12# 2021 Incentive Award Plan S-8 99.1 10/18/2021 10.13# 2021 Employee Stock Purchase Plan S-8 99.2 10/18/2021 10.14# Form of Restricted Stock Unit Grant Notice and Restricted Stock Unit Agreement S-8 99.3 10/18/2021 10.15# Form of Non-Employee Director Restricted Stock Unit Grant Notice and Restricted Stock Unit Agreement S-8 99.4 10/18/2021 10.16# Form of Stock Option Grant Notice and Stock Option Agreement S-8 99.5 10/18/2021 10.17# Non-Employee Director Compensation Policy, as amended 10-Q 10.1 08/09/2022 104 10.18# Employment Agreement dated August 9, 2021, among Stanley Chia, Vivid Seats Inc. and Vivid Seats, LLC S-4/A 10.14 08/16/2021 10.19# Employment and Restrictive Covenants Agreement, dated April 1, 2020, between Lawrence Fey and Vivid Seats LLC S-4/A 10.19 08/16/2021 10.20# Employment Agreement dated August 9, 2021, among Lawrence Fey, Vivid Seats Inc. and Vivid Seats, LLC S-4/A 10.18 08/16/2021 10.21# Employment and Restrictive Covenants Agreement, dated December 12, 2018, between Jon Wagner and Vivid Seats LLC S-4/A 10.24 08/16/2021 10.22# Employment Agreement dated August 9, 2021, among Jon Wagner, Vivid Seats Inc. and Vivid Seats, LLC S-4/A 10.23 08/16/2021 10.23# Class E Securities Agreement, dated November 5, 2018, between Stanley Chia and Hoya Topco, LLC S-4/A 10.15 08/16/2021 10.24# Class B Securities Agreement, dated September 1, 2020, between Stanley Chia and Hoya Topco, LLC S-4/A 10.16 08/16/2021 10.25# First Amendment to Class E Securities Agreement, dated November 5, 2018, between Stanley Chia and Hoya Topco, LLC, and Class B Securities Agreement, dated September 1, 2020, between Stanley Chia and Hoya Topco, LLC S-4/A 10.17 08/16/2021 10.26# Class D Securities Agreement, dated September 1, 2020, between Lawrence Fey and Hoya Topco, LLC S-4/A 10.20 08/16/2021 10.27# Class B Securities Agreement, dated September 1, 2020, between Lawrence Fey and Hoya Topco, LLC S-4/A 10.21 08/16/2021 10.28# First Amendment to Class D Securities Agreement, dated September 1, 2020, between Lawrence Fey and Hoya Topco, LLC, and Class B Securities Agreement, dated September 1, 2020, between Lawrence Fey and Hoya Topco, LLC S-4/A 10.22 08/16/2021 10.29# Class D Securities Agreement, dated December 17, 2018, between Jon Wagner and Hoya Topco, LLC S-4/A 10.25 08/16/2021 10.30# Class B Securities Agreement, dated September 1, 2020, between Jon Wagner and Hoya Topco, LLC S-4/A 10.26 08/16/2021 10.31# Class D Securities Agreement, dated September 1, 2020, between Jon Wagner and Hoya Topco, LLC S-4/A 10.27 08/16/2021 105 10.32† Lease dated December 21, 2021 between Vivid Seats, LLC and BSREP II SS Chicago LLC 8-K 10.1 12/22/2021 10.33† First Lien Credit Agreement, dated June 30, 2017, among Hoya Midco, LLC, Hoya Intermediate, LLC, Barclays Bank PLC, RBC Capital Markets, SunTrust Robinson Humphrey, Inc. and Jefferies Finance LLC S-4/A 10.7 07/07/2021 10.34† Amendment No. 1, dated March 28, 2018, to First Lien Credit Agreement, dated June 30, 2017, among Hoya Midco, LLC, Hoya Intermediate, LLC, Barclays Bank PLC, RBC Capital Markets, SunTrust Robinson Humphrey, Inc. and Jefferies Finance LLC S-4/A 10.8 07/07/2021 10.35† Amendment No. 2, dated July 2, 2018, to First Lien Credit Agreement, dated June 30, 2017, among Hoya Midco, LLC, Hoya Intermediate, LLC, Barclays Bank PLC, RBC Capital Markets, SunTrust Robinson Humphrey, Inc. and Jefferies Finance LLC S-4/A 10.9 07/07/2021 10.36† Amendment No. 3, dated May 22, 2020, to First Lien Credit Agreement, dated June 30, 2017, among Hoya Midco, LLC, Hoya Intermediate, LLC, Barclays Bank PLC, RBC Capital Markets, SunTrust Robinson Humphrey, Inc. and Jefferies Finance LLC S-4/A 10.10 07/07/2021 10.37† Amendment No. 4, dated February 3, 2022, to First Lien Credit Agreement, dated June 30, 2017, among Hoya Midco, LLC, Hoya Intermediate, LLC, Barclays Bank PLC, RBC Capital Markets, SunTrust Robinson Humphrey, Inc. and Jefferies Finance LLC 8-K 10.1 02/07/2022 10.38 Hoya Intermediate, LLC Second Amended and Restated Limited Liability Company Agreement * 21.1 Subsidiaries * 23.1 Consent of Deloitte & Touche LLP * 31.1 Certification of Principal Executive Officer Pursuant to Rules 13a-14(a) and 15d-14(a). * 31.2 Certification of Principal Financial Officer Pursuant to Rules 13a-14(a) and 15d-14(a). * 106 32.1 Certification of Principal Executive Officer Pursuant to 18 U.S.C. Section 1350. ** 32.2 Certification of Principal Financial Officer Pursuant to 18 U.S.C. Section 1350. ** 101.INS Inline XBRL Instance Document – the instance document does not appear in the Interactive Data File because XBRL tags are embedded within the Inline XBRL document. * 101.SCH Inline XBRL Taxonomy Extension Schema Document * 101.CAL Inline XBRL Taxonomy Extension Calculation Linkbase Document * 101.DEF Inline XBRL Taxonomy Extension Definition Linkbase Document * 101.LAB Inline XBRL Taxonomy Extension Label Linkbase Document * 101.PRE Inline XBRL Taxonomy Extension Presentation Linkbase Document * 104 Cover Page Interactive Data File (embedded within the Inline XBRL document) * * Filed herewith. ** Furnished herewith. # Indicates management contract or compensatory plan † Certain of the exhibits and schedules to this Exhibit have been omitted in accordance with Regulation S-K Item 601(a)(5). The Company agrees to provide a copy of all omitted exhibits and schedules to the SEC upon its request. Item 16. Form 10-K Summary None. 107 Signatures Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized. VIVID SEATS INC. By: /s/ Stanley Chia Stanley Chia Chief Executive Officer (principal executive officer) Date: March 7, 2023 Power of Attorney Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated. Signature Title Date /s/ Stanley Chia Chief Executive and Director March 7, 2023 Stanley Chia (principal executive officer) /s/ Lawrence Fey Chief Financial Officer March 7, 2023 Lawrence Fey (principal financial officer) /s/ Edward Pickus Chief Accounting Officer March 7, 2023 Edward Pickus (principal accounting officer) /s/ Mark Anderson Director March 7, 2023 Mark Anderson /s/ Todd Boehly Director March 7, 2023 Todd Boehly /s/ Jane DeFlorio Director March 7, 2023 Jane DeFlorio /s/ Craig Dixon Director March 7, 2023 Craig Dixon /s/ David Donnini Director March 7, 2023 David Donnini /s/ Tom Ehrhart Director March 7, 2023 Tom Ehrhart /s/ Julie Masino Director March 7, 2023 Julie Masino /s/ Martin Taylor Director March 7, 2023 Martin Taylor 108