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Item 9A. Controls and Procedures

2024-03-05 compared with 2023-03-08 · 75 added, 55 removed, 106 unchanged (55% of the section changed)

1 unchanged sentence

Evaluation of Disclosure Controls and Procedures

Our management is responsible for establishing and maintaining adequate internal control over financial reporting (as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act).

Our management, with the participation of our Chief Executive Officer and Chief Financial Officer, evaluated the effectiveness of the design and operation of our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act) at the end of the period covered by this Report and, based on such evaluation, have concluded that our disclosure controls and procedures were effective as of December 31, 2023, at the reasonable assurance level to ensure that the information required to be disclosed by us in this Report was (i) recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and regulations and (ii) accumulated and communicated to our management, including our Chief Executive Officer and Chief Financial Officer, to allow timely decisions regarding required disclosure.

In addition, our management has determined we have remediated the deficient control first disclosed in our Annual Report on Form 10-K for the year ended December 31, 2022, as amended on May 9, 2023.

Management’s Annual 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 Rules 13a-15(f) and 15d-15(f) under 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 generally accepted accounting principles.

Under the supervision and with the participation of our management, including our Chief Executive Officer and Chief Financial Officer, we conducted an evaluation of the effectiveness of our internal control over financial reporting based on the framework set forth in Internal Control - Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission.

Based on such evaluation, our Chief Executive Officer and Chief Financial Officer have concluded that our disclosure controls and procedures are effective as of December 31, 2022.

Management identified material weaknesses in internal control over financial reporting for the period ended December 31, 2020 related to:

(a) accounting for non-routine transactions;

(b) the lack of consistent review of journal entries prior to their posting to the general ledger;

and (c) the need to provide formal segregation controls over our information technology.

These material weaknesses were due to us being a private company with limited resources and not having the necessary business processes, controls, and technical expertise to oversee our business processes and controls.

Based on the remediation efforts described below, weakness (a) as noted above, was fully remediated as of December 31, 2021, and weaknesses (b) and (c) have been fully remediated as of December 31, 2022.

Remediation efforts include the following:

Adding experienced technical accounting personnel, and continuing to engage with external technical accounting consultants, to facilitate timely and accurate accounting for non-routine transactions;

Expanded the team of experienced accounting personnel to allow for appropriate review of journal entries and general segregation of duties;

Implemented new software tools to facilitate systematic processing and effective review of journal entries prior to entering in the general ledger;

Partnered with external consultants specializing in public company control compliance, to assess and implement controls over financial and information technology processes.

Notwithstanding the assessment that our internal controls over financial reporting were not effective in prior periods, we believe we have employed supplementary procedures to ensure the financial statements contained in this Report fairly present in all material respects, our financial position as of December 31, 2022 and 2021, and results of operations and cash flows for the periods ending December 31, 2022, 2021 and 2020.

Management’s Report on Internal Controls Over Financial Reporting

This Report does not include a report of management’s assessment regarding internal control over financial reporting or an attestation report of the company's registered public accounting firm due to a transition period established by rules of the SEC for newly public companies or emerging growth companies.

Under the supervision and with the participation of management, our Chief Executive Officer and Chief Financial Officer conducted an evaluation of the effectiveness of the internal control over financial reporting based on the framework in Internal Control - Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (2013).

Based on such evaluation, management concluded that our internal control over financial reporting was effective as of December 31, 2023.

This Report does not include an attestation report of our independent registered public accounting firm due to an exemption established by the JOBS Act for “emerging growth companies.”

Changes in Internal Control Over Financial Reporting

Other than the remediation efforts described above, there were no changes in our internal control over financial reporting identified in connection with the evaluation required by Rule 13a-15(d) and 15d-15(d) of the Exchange Act that occurred during the year ended December 31, 2022 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

There were no changes in our internal control over financial reporting (as defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act) that occurred during the year ended December 31, 2023, that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

Inherent Limitations on Effectiveness of Controls

5 unchanged sentences

Other Information

Rule 10b5-1 Trading Plans

On November 21, 2023 , Daryl Stemm , our Chief Financial Officer , adopted a Rule 10b5-1 trading plan (the “10b5-1 Plan”) providing for the sale of $ 50,000 worth of shares of our Class A Common Stock on August 12, 2024.

The duration of the 10b5-1 Plan was to be until August 30, 2024, or earlier if all transactions under the trading arrangement are completed.

Prior to any sale being made pursuant to the 10b5-1 Plan, the 10b5-1 Plan was terminated on December 15, 2023 .

No other directors or officers, as defined in Rule 16a-1(f), adopted and/or terminated a “Rule 10b5-1 trading arrangement” or a “non-Rule 10b5-1 trading arrangement” (each as defined in Regulation S-K Item 408) during the last fiscal quarter.

Disclosure Regarding Foreign Jurisdictions that Prevent Inspections

1 unchanged sentence

Directors, Executive Officers and Corporate Governance

The information required by this item is incorporated by reference to our definitive Proxy Statement for the 2023 Annual Meeting of Stockholders to be filed with the SEC within 120 days after the end of our year ended December 31, 2022.

The information required by this item is incorporated by reference to our definitive Proxy Statement for the 2024 Annual Meeting of Stockholders to be filed with the SEC within 120 days after the end of our fiscal year ended December 31, 2023.

Executive Compensation

Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters

Certain Relationships and Related Transactions, and Director Independence

Principal Accounting Fees and Services

Exhibits, Financial Statement Schedules

Principal Accountant Fees and Services

Exhibits and Financial Statement Schedules

(a)(1) Financial Statements

6 unchanged sentences

Exhibit Description

Merger Agreement, dated as of April 21, 2021, by and among the Company, Merger Sub and Legacy SmartRent.

Merger Agreement, dated as of April 21, 2021, by and among SmartRent Inc., Fifth Wall Acquisition Corp.

I, and SmartRent.com, Inc.

April 22, 2021

Amendment No.

1 to Merger Agreement, dated as of July 23, 2021, by and among the Company, Merger Sub and Legacy SmartRent.

1 to Merger Agreement, dated as of July 23, 2021, by and among SmartRent, Inc., Fifth Wall Acquisition Corp.

I and SmartRent.com, Inc .

July 26, 2021

3 unchanged sentences

August 30, 2021

Specimen Common Stock Certificate.

Specimen Class A Common Stock Certificate.

August 30, 2021

Description of the Registrant’s Securities.

March 25, 2022

Amended and Restated Registration Rights Agreement, dated as of August 24, 2021, by and among the Company, the Sponsor and certain equity holders of Legacy SmartRent named therein.

Amended and Restated Registration Rights Agreement, dated as of August 24, 2021, by and among SmartRent Inc., the Sponsor and certain equity holders of SmartRent.com, Inc.

named therein.

August 30, 2021

13 unchanged sentences

December 13, 2021

Sponsor Agreement, dated April 21, 2021, by and among the Company, its former officers and directors, Legacy SmartRent and the Sponsor.

Sponsor Agreement, dated April 21, 2021, by and among SmartRent, Inc., its former officers and directors, SmartRent.com, Inc.

and the Sponsor.

April 22, 2021

Form of Indemnification Agreement between the Company and each of the officers and directors of the Company.

Form of Indemnification Agreement between SmartRent, Inc.

and each of the officers and directors of SmartRent, Inc.

July 26, 2021

8 unchanged sentences

August 30, 2021

Employment Agreement, dated as of March 16, 2021, by and between Legacy SmartRent and Lucas Haldeman.

Employment Agreement, dated as of March 16, 2021, by and between SmartRent.com, Inc.

and Lucas Haldeman.

July 26, 2021

Employment Agreement, dated as of March 16, 2021, by and between Legacy SmartRent and Isaiah DeRose-Wilson.

First Amendment to Employment Agreement, dated as of January 1, 2024, by and between SmartRent.com, Inc.

and Lucas Haldeman (filed herewith).

Employment Agreement, dated as of March 16, 2021, by and between SmartRent.com, Inc.

and Isaiah DeRose-Wilson.

July 26, 2021

Employment Agreement, dated as of January 3, 2022, by and between SmartRent and Brian Roberts (filed herewith).

Employment Agreement, dated as of April 28, 2022, by and between SmartRent and Hiroshi Okamoto (filed herewith).

Employment Agreement, dated as of April 27, 2022, by and between SmartRent and Robyn Young (filed herewith).

Warrant to Purchase Common Stock, dated as of April 24, 2020 by and between Legacy SmartRent and RET Ventures SPV I, L.P.

First Amendment to Employment Agreement, dated as of January 1, 2024, by and between SmartRent.com, Inc.

and Isaiah DeRose-Wilson (filed herewith).

Employment Agreement, dated as of April 28, 2022, by and between SmartRent, Inc.

and Hiroshi Okamoto.

March 8, 2023

Warrant to Purchase Common Stock, dated as of February 4, 2021, by and between Legacy SmartRent and LEN FW Investor, LLC.

Separation Agreement, dated as of November 15, 2023, by and between SmartRent, Inc.

and Hiroshi Okamato (filed herewith).

Employment Agreement, dated as of April 27, 2022, by and between SmartRent and Robyn Young.

March 8, 2023

Subsidiaries of the Company (filed herewith).

First Amendment to Employment Agreement, dated as of January 1, 2024, by and between SmartRent, Inc.

and Robyn Young (filed herewith).

Employment Agreement, dated as of November 15, 2023, by and between SmartRent and Daryl Stemm (filed herewith).

Employment Agreement, dated as of March 30, 2023, by and between SmartRent and Kristen Lee (filed herewith).

First Amendment to Employment Agreement, dated as of January 1, 2024, by and between SmartRent, Inc.

and Kristen Lee (filed herewith).

SmartRent, Inc.

Executive Incentive Compensation Plan .

January 25, 2024

Warrant to Purchase Common Stock, dated as of April 24, 2020 by and between SmartRent.com, Inc.

and RET Ventures SPV I, L.P.

March 25, 2022

Warrant to Purchase Common Stock, dated as of February 4, 2021, by and between SmartRent.com, Inc.

and LEN FW Investor, LLC.

March 25, 2022

Product Sales Agreement dated August 3, 2023, by and between SmartRent Technologies, Inc.

and Ademco Inc., doing business as ADI Global Distribution.

August 8, 2023

Insider Trading Policy of SmartRent, Inc., as amended and restated effective January 24, 2023 (filed herewith).

Subsidiaries of SmartRent Inc.

(filed herewith) .

Consent of Deloitte & Touche LLP (filed herewith).

6 unchanged sentences

Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (filed herewith).

Insider Trading Policy of SmartRent, Inc., as amended and restated effective January 24, 2023 (filed herewith).

Compensation Recovery Policy (filed herewith).

Inline XBRL Instance Document - the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document.

Inline XBRL Taxonomy Extension Schema Document.

Inline XBRL Taxonomy Extension Calculation Linkbase Document.

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Inline XBRL Taxonomy Extension Presentation Linkbase Document.

Inline XBRL Taxonomy Extension Schema with Embedded Linkbase Documents.

Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101).1

** Certain exhibits and schedules have been omitted pursuant to Item 601(b)(2) of Regulation S-K.

The Company agrees to furnish supplementally to the SEC a copy of any omitted exhibits or schedules upon request.

* The certifications attached as Exhibit 32.1 and Exhibit 32.2 that accompany this Annual Report on Form 10-K are deemed furnished and not filed with the Securities and Exchange Commission and are not to be incorporated by reference into any filing of SmartRent, Inc.

under the Securities Act of 1933, as amended, or the Securities Exchange Act of 1934, as amended, whether made before or after the date of this Annual Report on Form 10-K, irrespective of any general incorporation language contained in such filing.

** Certain exhibits and schedules have been omitted pursuant to Regulation S-K Item 601(b)(2) or Item 601(a)(5) (as applicable).

We agree to furnish supplementally to the SEC a copy of any omitted exhibits or schedules upon request.

Indicates a management contract or any compensatory plan, contract or arrangement.

6 unchanged sentences

(Principal Executive Officer)

/s/ Hiroshi Okamoto

Hiroshi Okamoto

/s/ Daryl Stemm

Chief Financial Officer

1 unchanged sentence

POWER OF ATTORNEY

KNOW ALL PERSONS BY THESE PRESENTS, that each individual whose signature appears below constitutes and appoints Lucas Haldeman and Hiroshi Okamoto, and each of them, his or her true and lawful attorney-in-fact and agent, with full power of substitution and resubstitution, for him or her and in his or her name, place and stead, in any and all capacities, to sign any and all amendments to this Annual Report on Form 10-K, and to file the same, with all exhibits thereto and other documents in connection therewith, with the SEC, granting unto said attorneys-in-fact and agents, and each of them, full power and authority to do and perform each and every act and thing requisite and necessary to be done in and about the premises, as fully to all intents and purposes as he or she might or could do in person, hereby ratifying and confirming all that said attorneys-in-fact and agents or any of them, or his or her or their substitute or substitutes, may lawfully do or cause to be done or by virtue hereof.

KNOW ALL PERSONS BY THESE PRESENTS, that each individual whose signature appears below constitutes and appoints Lucas Haldeman and Daryl Stemm, and each of them, his or her true and lawful attorney-in-fact and agent, with full power of substitution and resubstitution, for him or her and in his or her name, place and stead, in any and all capacities, to sign any and all amendments to this Annual Report on Form 10-K, and to file the same, with all exhibits thereto and other documents in connection therewith, with the SEC, granting unto said attorneys-in-fact and agents, and each of them, full power and authority to do and perform each and every act and thing requisite and necessary to be done in and about the premises, as fully to all intents and purposes as he or she might or could do in person, hereby ratifying and confirming all that said attorneys-in-fact and agents or any of them, or his or her or their substitute or substitutes, may lawfully do or cause to be done or by virtue hereof.

Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the Registrant and in the capacities and on the date indicated:

5 unchanged sentences

(Principal Executive Officer)

/s/ Hiroshi Okamoto

/s/ Daryl Stemm

Chief Financial Officer

March 5, 2024

Hiroshi Okamoto

(Principal Financial Officer)

1 unchanged sentence

March 5, 2024

/s/ Robert Best

March 8, 2023

/s/ John Dorman

8 unchanged sentences

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 9A. Controls and Procedures