System1, Inc. 10-K

Item 9A. Controls and Procedures Evaluation of Disclosure Controls and Procedures Pursuant to Rules 13a-15(b) and 15d-15(b) under the Securities Exchange Act, we have evaluated, under the supervision and with the participation of our management, including our Chief Executive Officer ( “ CEO ” ) and Chief Financial Officer ( “ CFO ” ), the effectiveness of our disclosure controls and procedures, as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act as of the end of the period covered by this report. Based on that evaluation, our CEO and CFO concluded that, as of December 31, 2022, due to the material weaknesses in our internal control over financial reporting described below, our disclosure controls and procedures were not effective to ensure that the information required to be disclosed in the reports required to be filed or submitted under the Securities Exchange Act is (i) recorded, processed, summarized, and reported within the time periods specified in the SEC’s rules and forms, and (ii) accumulated and communicated to our management, including our CEO and CFO, as appropriate, to allow timely decisions regarding required disclosure. Management’s Report on Internal Control over Financial Reporting Management is responsible for establishing and maintaining adequate internal control over financial reporting as defined in Rules 13a-15(f) and 15d-15(f) under the Securities Exchange Act. Management, including our CEO and CFO, assessed the effectiveness of our internal control over financial reporting as of December 31, 2022. In making this assessment, management used the criteria described in Internal Control - Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission ("COSO"). Based on this assessment, management has concluded that we did not maintain effective internal control over financial reporting as of December 31, 2022 because of the material weaknesses described below. We have identified material weaknesses in our internal control over financial reporting as of December 31, 2022. 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. The material weaknesses identified were as follows: • We did not design and maintain an effective control environment commensurate with our financial reporting requirements. Specifically, we lacked a sufficient number of professionals with an appropriate level of accounting knowledge, training and experience to appropriately analyze, record and disclose accounting matters timely and accurately. Additionally, the limited personnel resulted in an inability to consistently establish appropriate authorities and responsibilities in pursuit of financial reporting objectives, as demonstrated by, among other things, insufficient segregation of duties in our finance and accounting functions. • We did not design and maintain effective controls in response to the risks of material misstatement. Specifically, changes to existing controls or the implementation of new controls have not been sufficient to respond to changes to the risks of material misstatement to financial reporting. These material weaknesses contributed to the following additional material weaknesses: • We did not design and maintain effective controls to timely analyze and record the financial statement effects from acquisitions. Specifically, we did not design and maintain effective controls over the (i) application of U.S. GAAP to such transactions, including accounting for post-combination compensation arrangements, (ii) review of the inputs and assumptions used in the measurement of assets acquired and liabilities assumed, including discounted cash flow analysis to value acquired intangible assets at an appropriate level of precision, (iii) the tax impacts of acquisitions to the financial statements, and (iv) 133 conforming of U.S. GAAP and accounting policies of acquired entities to that of the Company. In addition, we did not design and maintain effective controls relating to the oversight and ongoing recording of the financial statement results of the acquired businesses. • We did not design and maintain formal accounting policies, procedures and controls to achieve complete, accurate and timely financial accounting, reporting and disclosures, including controls over the preparation and review of business performance reviews, account reconciliations and journal entries, and (ii) maintaining appropriate segregation of duties. Additionally, we did not design and maintain controls over the classification and presentation of accounts and disclosures in the consolidated financial statements, including the statement of cash flows. • We did not design and maintain effective controls over the completeness and accuracy of accrued liabilities, stock-based compensation and equity transactions. • We did not design and maintain effective controls over the accuracy and valuation of goodwill, including the allocation of goodwill to reporting units and the identification and measurement of goodwill impairment. These material weaknesses resulted in the restatement of the Company's condensed consolidated financial statements: as of March 31, 2022 and for the predecessor period from January 1, 2022 to January 26, 2022 and for the successor period from January 27, 2022 to March 31, 2022; as of June 30, 2022 and for the predecessor period from January 1, 2022 to January 26, 2022 and for the successor periods for the three months ended June 30, 2022 and from January 27, 2022 to June 30, 2022; and as of September 30, 2022 and for the predecessor period from January 1, 2022 to January 26, 2022 and for the successor periods for the three months ended September 30, 2022 and from January 27, 2022 to September 30, 2022. These material weaknesses also resulted in immaterial misstatements to substantially all of the S1 Holdco, LLC accounts, which were recorded prior to the issuance of the consolidated financial statements as of December 31, 2021, 2020, 2019 and 2018 and for the years then ended; as of March 31, 2021 and 2020 and for the three-month periods then ended; as of June 30, 2021 and 2020 and for the six-month periods then ended; and as of September 30, 2021 and 2020 and for the nine-month periods then ended. • We did not design and maintain effective controls over the accounting for complex financial instruments, including the impact of these instruments on earnings per share. This material weakness also resulted in a material misstatement of the Trebia warrant liabilities, change in the fair value of the Trebia warrant liabilities, forward purchase agreement liabilities, change in the fair value of the forward purchase agreement liabilities, classification of redeemable shares of Class A common stock issued in connection with Trebia’s initial public offering, additional paid-in-capital, accumulated deficit, earnings per share, and related financial disclosures of Trebia Acquisition Corp. as of December 31, 2020 and for the period from February 11, 2020 (inception) through December 31, 2020, as of September 30, 2020 and for three month period ended September 30, 2020 and for the period from February 11, 2020 (inception) through September 30, 2020, as of June 30, 2020 and for three month period ended June 30, 2020 and for the period from February 11, 2020 (inception) through June 30, 2020, as of March 31, 2021 and for three month period ended March 31, 2021. This material weakness also resulted in material adjustments relating to the Trebia forward purchase agreement liabilities and repurchases of common stock impacting the accumulated deficit and additional paid-in capital in the opening balance sheet as of January 27, 2022 and the earnings per share computations for the quarter ended June 30, 2022 of the Company. Additionally, these material weaknesses could result in a misstatement of substantially all of our accounts or disclosures that would result in a material misstatement to the annual or interim consolidated financial statements that would not be prevented or detected. • We did not design and maintain effective controls over information technology (“IT”) general controls for information systems that are relevant to the preparation of our financial statements. Specifically, we did not design and maintain: i. program change management controls to ensure that IT program and data changes affecting financial IT applications and underlying accounting records are identified, tested, authorized, and implemented appropriately; 134 ii. user access controls to ensure appropriate segregation of duties and that adequately restrict user and privileged access to financial applications, programs, and data to appropriate Company personnel; iii. computer operations controls to ensure that critical batch jobs are monitored and data backups are authorized and monitored; and iv. testing and approval controls for program development to ensure that new software development is aligned with business and IT requirements. These IT deficiencies did not result in a material misstatement to the financial statements; however, the deficiencies, when aggregated, could impact the effectiveness of IT-dependent controls (such as automated controls that address the risk of material misstatement to one or more assertions, along with the IT controls and underlying data that support the effectiveness of system-generated data and reports) that could result in misstatements potentially impacting all financial statement accounts and disclosures that would not be prevented or detected. Accordingly, we have determined these IT deficiencies in the aggregate constitute a material weakness. This Annual Report does not include an attestation report of the Company’s independent registered public accounting firm due to a transition period established by SEC rules and regulations for newly public companies. We are not required to have, or to engage our independent registered public accounting firm to perform, an audit of the effectiveness of our internal controls over financial reporting for as long as we are an “emerging growth company” pursuant to the provisions of the JOBS Act. Remediation plan for the material weaknesses We are in the process of, and we are focused on, designing and implementing effective measures to improve our internal control over financial reporting and remediate the material weaknesses. Our remediation efforts to address the identified material weaknesses are ongoing. Our efforts include a number of actions: • Hiring additional senior level accounting personnel with applicable technical accounting knowledge, training and experience in accounting matters, supplemented by third-party resources; • Designing and implementing controls to formalize roles and review responsibilities to align with our team’s skills and experience and designing and implementing controls over segregation of duties; • Engaging an accounting advisory firm to assist with the documentation, evaluation, remediation and testing of our internal control over financial reporting based on the criteria established in Internal Control - Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission; • Engaging third-party experts to assist with the preparation of technical accounting analyses and valuations associated with business combinations; • Designing and implementing controls related to accounting for acquisitions and other technical accounting and financial reporting matters, including controls over the preparation and review of accounting memoranda addressing these matters, valuations and key assumptions utilized in the valuations, tax impacts, and ongoing recording of the financial statement results of the acquired businesses; • Designing and implementing formal accounting policies, procedures and controls supporting our period-end financial reporting process, including controls over the preparation and review of account reconciliations and journal entries, business performance reviews, foreign exchange gains/losses for intercompany transactions, and classification and presentation of accounts and disclosures, including the statement of cash flows; • Designing and implementing controls over the completeness and accuracy of accrued liabilities, stock-based compensation and equity transactions; • Designing and implementing controls related to accounting for complex financial instruments, including the earnings per share impacts; • Designing and implementing controls over the accuracy and valuation of goodwill, including the allocation of goodwill to reporting units and the identification and measurement of goodwill impairment; • Implementing an enhanced enterprise resource planning software for automation and enforcing segregation of duties across the organization; and • Designing and implementing IT general controls, including controls over change management, the review and update of user access rights and privileges, controls over batch jobs and data backups, and program development approvals and testing. 135 While we believe that these efforts will improve our internal control over financial reporting, remediation of the material weaknesses will require validation and testing of the design and operating effectiveness of internal controls over a sustained period of financial reporting cycles. Therefore, these material weaknesses have not been remediated as of December 31, 2022. Changes in Internal Control over Financial Reporting There have been no changes to our internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) that occurred during the fiscal quarter ended December 31, 2022 which have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting. Item 9B. Other Information On June 1, 2023, the Company further modified the 2023 Award of the Protected Incentive Plan, deferring the last quarterly cash installment of $10,000 such that $5,000 was due on May 30, 2023, $5,000 is due on July 1, 2023, and providing additional cash bonus payments of up to $10,000, $6,000 due on October 1, 2023 (the "October Payment") and $1,000 due on the first of each month of November 2023 through February 2024 (together the "Remaining Payments"). All of the payments due under this modification are conditioned upon the members of the Protected senior management (i) entering into employment agreements that include certain protective covenants in favor of Protected and (ii) remaining employed by Protected (other than as a result of a termination without cause) through all applicable payment dates. The October Payment and the Remaining Payments are conditioned upon the Protected business (x) not exceeding certain trailing three-month customer acquisition marketing spending caps or (y) achieving certain monthly (or trailing twelve-month) minimum EBITDA thresholds. This summary is qualified in its entirety by reference to the full text of the First Amendment, which is filed as Exhibit 10.18 to this Annual Report on Form 10-K and is incorporated herein by reference. Item 9C. Disclosure Regarding Foreign Jurisdictions that Prevent Inspections Not applicable. 136 Part III Item 10. Directors, Executive Officers and Corporate Governance Directors The following table and biographical information sets forth certain information the director nominees. Such information is current as of April 20, 2023. The information presented below for each director nominee includes the specific experience, qualifications, attributes and skills that led us to the conclusion that such director should be nominated to serve on our Board of Directors in light of our business. Name Age Position Director Since Michael Blend 55 Director 2013 John Civantos 55 Director 2022 Frank R. Martire, Jr. 75 Director 2022 Moujan Kazerani 47 Director 2022 Christopher Phillips 37 Director 2022 Dexter Fowler 37 Director 2022 Caroline Horn 53 Director 2022 Jennifer Prince 50 Director 2022 Michael Blend is System1’s co-founder and has served as System1’s chief executive officer since February 2021, and chairman of our Board of Directors since September 2013. Prior to System1, Mr. Blend was President/COO of Leaf Group Ltd., which he joined when Leaf Group acquired his data company, Hotkeys, in 2006. Prior to Hotkeys, Mr. Blend was vice president, corporate development for Jawbone from 2001 to 2003 and for Wedding Channel (acquired by The Knot) from 1999 to 2001. Mr. Blend currently serves on the board of directors of Nutrisystem, Inc. and Protected.net, and has previously served on the board of directors of leading digital marketing and technology companies, including Dynata, Data Axle, among others. Mr. Blend was also the chairman of the board of Stuff Media from 2016 until it was acquired by iHeart Media in 2018. Mr. Blend was the EY National Entrepreneur of the Year for Media, Entertainment & Communications in 2018, together with System1’s other co-founder, Charles Ursini. Mr. Blend received his JD from The University of Chicago, and holds a bachelor’s degree in mathematics from Duke University. We believe Mr. Blend is qualified to serve on the System1 Board of Directors because of his extensive business and leadership experience in the digital advertising and technology industries. John Civantos has been a member of our Board of Directors since February 2022. Mr. Civantos has been a Senior Partner at Avance Investment Management since April 2022. From August 2020 to March 2022, Mr. Civantos served as Co-Head of Private Capital Group at MSD Partners, L.P. Prior to MSD Partners, Mr. Civantos served as a Managing Partner and was a member of the Investment Committee at Court Square Capital Partners, a U.S. middle market private equity firm, where he worked from April 2004 to March 2019. At Court Square Capital Partners, Mr. Civantos was primarily involved in the firm’s efforts investing in the Business Services and Technology sectors. Mr. Civantos received his BA from Duke University and his MBA from the Wharton School of the University of Pennsylvania. He also holds an M.A. in International Affairs from the Johns Hopkins School of Advanced International Studies. We believe Mr. Civantos is qualified to serve on the System1 Board of Directors because of his extensive financial experience. Frank R. Martire, Jr. has been a member of our Board of Directors since January 2022. Mr. Martire has served as the Executive Chairman of NCR Corporation since May 2018. Previously, Mr. Martire served as Executive Chairman of FIS from January 2017 to May 2018, Executive Chairman of FIS from January 2015 to Decemebr 2016, and chairman of the board and Chief Executive Officer of FIS from April 2012 to January 2016. Mr. Martire joined FIS as President and Chief Executive Officer after its acquisition of Metavante in October 2009, where he had served as chairman of the board and Chief Executive Officer since January 2003. Mr. Martire served as 137 President and Chief Operating Officer of Call Solutions, Inc. from 2001 to 2003 and president and Chief Operating Officer, Financial Institution Systems and Services Group of Fiserv from 1991 to 2001. He has also served on the boards of Cannae Holdings, Inc. since November 2017 and Foley Trasimene since May 2020. Mr. Martire received a master's degree in finance from the University of New Haven and a bachelor's degree in economics from Sacred Heart University. Mr. Martire was nominated for appointment to the Board as one of Cannae Holdings’ two permitted designees to serve on the Company’s Board pursuant to the Shareholders Agreement, dated as of January 27, 2022 (the “Shareholders Agreement”), by and among the (it) Company, (ii) Trasimene Trebia, L.P. and BGPT Trebia LP (the “Trebia Sponsors"), (iii) Cannae Holdings, Inc. (“Cannae Holdings” and, together with the Trebia Sponsors, the “Trebia Investors”), (iv) Michael Blend, (v) Chuck Ursini, (vi) Nick Baker and (vii) Just Develop It Ltd. (“JDI” and, together with Messrs. Blend, Ursini and Baker, the “Founder Shareholders”). We believe Mr. Martire is qualified to serve on the System1 Board because of his extensive leadership experience at public companies. Moujan Kazerani has been a member of our Board of Directors since January 2022. She has been a Founding Partner of Stibel Investments since co-founding it in December 2010, and Bryant Stibel since co-founding it in November 2013. Previously, Ms. Kazerani served as General Counsel, Chief Compliance Officer & Head of HR and Culture at Dun & Bradstreet Credibility Corporation and later as Leader of Global Corporate Strategy for D&B from September 2010 to July 2017. Prior to D&B, Ms. Kazerani served as General Counsel & Secretary at Zag.com which launched and merged with TrueCar, Inc. from November 2006 to September 2010 and advised on the company’s compensation and audit committees of the board. Ms. Kazerani started her career as a corporate associate at Gibson, Dunn & Crutcher LLP. Ms. Kazerani currently serves on the board of directors of RingDNA, and Tailwind International Acquisition Corp. where she also serves on its audit committee. She received her JD from The UCLA School of Law and holds a bachelor’s degree in psychology from U.C. Berkeley. We believe Ms. Kazerani is qualified to serve on the System1 Board because of her substantial operational and executive experience. Christopher Phillips has been a member of our Board of Directors since January 2022. He is a co-founder of Protected.net and has served as its Chief Executive Officer since May 2016 and served as a director from May 2016 until Protected.net's acquisition by System1 in January 2022. In addition, he has been the Chief Executive Officer of Just Develop It since he co-founded it in 2008. Previously, Mr. Phillips was Chief Executive Officer and Director of WZUK, a global provider of websites and web hosting. He held both positions from April 2014 until the company was sold to Endurance International Group in July 2017. From January 2011 to January 2015, Mr. Phillips served as Chief Executive Officer of JDI Backup, a leading provider of cloud storage services. We believe Mr. Phillips is qualified to serve on the System1 Board because of his business and leadership experience. Dexter Fowler has served as a member of our Board of Directors since January 2022. Mr. Fowler was an American professional baseball outfielder who played in 14 Major League Baseball (MLB) seasons, most recently with the Los Angeles Angels, before retiring in 2023. Prior to the Angels, Mr. Fowler played for the St. Louis Cardinals from April 2017 to October 2020, for the Chicago Cubs from April 2015 to October 2016 and before that for the Houston Astros from April 2014 to October 2014. Mr. Fowler began his MLB career with the Colorado Rockies in 2004. Mr. Fowler also represented the United States in the 2008 Summer Olympics, as a member of the United States national baseball team. Mr. Fowler also served on the board of directors of Austerliz Acquisition Corporation I, a publicly traded special purpose acquisition company. We believe Mr. Fowler is qualified to serve on the System1 Board of Directors because of his professional experience and experience in serving public company boards of directors. Caroline Horn has served as a member of our Board of Directors since January 2022. Ms. Horn has been a Partner of Andreessen Horowitz since April 2012 where she provides strategic advice to portfolio founders and CEOs on how to assess, hire, develop and retain the best executive talent. Additionally, Ms. Horn has served as an advisor at Strava since April 2014 where she provides strategic advice on hiring and people related issues. Previously, Ms. Horn served as an Executive Recruiting Manager and Executive Recruiter for Global Leadership for Google, Inc. (NYSE: GOOGL) from September 2004 to April 2012. Ms. Horn holds a bachelor’s degree in Anthropology from Dartmouth College. We believe Ms. Horn is qualified to serve on the System1 Board of Directors because of her leadership experience and expertise in company scaling and technology sectors. Jennifer Prince has served as a member of our Board of Directors since January 2022. Ms. Prince is the Chief Commercial Officer of the Los Angeles Rams, an American football team in the National Football League, a 138 position that she has held since December 2021. From December 2020 through December 2021 Ms. Prince served as the global VP and head of global content partnerships for Twitter, where she led the social network’s worldwide efforts engaging with media entities and individual creators since 2013. Prior to Twitter, Ms. Prince was head of industry for film and television at Google and head of media and entertainment at YouTube from April 2011 to August 2013. Ms. Prince was also SVP of advertising at Demand Media from June 2007 to April 2011. Ms. Prince currently serves on the board of directors of Versus Systems Inc., Hershey Entertainment & Resorts Company and Ghostcast Inc. Ms. Prince holds a bachelor’s degree in communications from U.C. Santa Barbara. We believe Ms. Prince is qualified to serve on the System1 Board of Directors because of her substantial leadership experience and media expertise. Executive Officers Below is biographical information for each of our current executive officers as of April 20, 2023, other than Michael Blend and Christopher Phillips (whose biographical information are shown above). Each executive officer serves at the discretion of the Board of Directors and the Chief Executive Officer. Name Age Position Michael Blend 55 Chief Executive Officer and Chairman Christopher Phillips 37 Chief Executive Officer of Protected.net Group Limited Brian Coppola 50 Chief Product Officer Tridivesh Kidambi 41 Chief Financial Officer Jennifer Robinson 45 Chief Technology Officer Elizabeth Sestanovich 59 Chief People Officer Daniel Weinrot 49 General Counsel and Corporate Secretary Brian Coppola has been System1’s chief product officer since June 2019, and previously served as System1’s vice president and then executive vice president of product since October 2015. Prior to System1, Mr. Coppola was the senior vice president of product at Amobee from 2013 to 2015, which he joined via SingTel’s acquisition of Adconion Direct in 2014. Mr. Coppola holds a bachelor’s degree in finance from Loyola Marymount University. Tridivesh Kidambi has been System1’s chief financial officer since 2016. Prior to System1, Mr. Kidambi was the executive vice president, finance & analytics of TV Time from October 2015 to 2016, chief financial officer of EZ Texting from 2014 to 2015, and vice president, finance at Leaf Group Ltd. from 2007 to 2014. Mr. Kidambi currently serves on the board of directors of Protected.net. Mr. Kidambi received his MBA from Claremont Graduate University’s Drucker School of Management, and holds a bachelor’s degree in economics and mathematics from Claremont McKenna College. Jennifer Robinson has been System1’s chief technology officer since May 2021. Prior to System1, Ms. Robinson was executive vice president, product & technology at Zefr, Inc., a contextual advertising company powered by patented machine learning technology from 2019 to 2021, where she led the product and tech organization. Prior to Zefr, Ms. Robinson was the chief technology officer at AwesomenessTV (now a ViacomCBS company) from 2015 to 2018, where she led technology strategy and development. Ms. Robinson received her MBA from NYU’s Stern School of Business, and holds a bachelor’s degree in computer science from The University of Chicago. Elizabeth Sestanovich has been System1’s chief people officer since June 2021, and previously served as System1’s chief operations officer beginning in August 2016. Prior to System1, Ms. Sestanovich was the founding partner and principal of Summit Advisors, a management consulting and advisory firm, from 2014 to 2016, and the chief executive officer and group publisher of the LA Weekly & OC Weekly from 2002 to 2013. Ms. Sestanovich also held senior management positions at Carsdirect.com and The Los Angeles Times from 1993 to 2002. Ms. Sestanovich received her Master’s in psychology and organizational behavior from Pepperdine University, and holds a bachelor’s degree in psychology with a minor in economics from UCLA. 139 Daniel Weinrot has been System1’s general counsel since January 2018. Prior to System1, Mr. Weinrot was general counsel and deputy general counsel at Leaf Group Ltd., a diversified digital media and marketplaces company, from 2010 to 2018, and deputy general counsel at Las Vegas Sands Corp, a leading international developer of integrated casino resorts, from 2006 to 2010. Mr. Weinrot started his career as a corporate associate at Latham & Watkins LLP in Los Angeles in 2000. Mr. Weinrot received his J.D. from The UCLA School of Law, and holds a bachelor’s degree in political economy from U.C. Berkeley. Delinquent Section 16(A) Reports Section 16(a) of the Exchange Act requires our executive officers and directors and persons who beneficially own more than 10% of our Common Stock to file initial reports of beneficial ownership and reports of changes in beneficial ownership with the SEC. Such persons are required by SEC regulations to furnish us with copies of all Section 16(a) forms filed by such person. Based solely on our review of such forms furnished to us, and written representations from certain reporting persons, we believe that all filing requirements applicable to our executive officers, directors and greater-than-10% stockholders during the fiscal year ended December 31, 2022, except (i) due to administrative errors, each of the following filed one late Form 4 to correct the nature of ownership and amount of securities acquired in connection with the consummation of the Merger: Michael Blend (one transaction), Moujan Kazerani (two transactions), Brian Coppola (three transactions), Paul Filsinger (three transactions) Tridives h Kidambi (four transactions), Jennifer Robinson (one transaction), Elizabeth Sestanovich (one transaction) Christopher Phillips (three transactions) and Just Develop It Limited (one transaction) and (ii) due to administrative delays in obtaining EDGAR filing codes, each of the following individuals filed one late Form 3 in connection with the consummation of the Merger: Stanley Blend, Lone Star Friends Trust and JDI & AFH Limited. Material Changes to the Procedures by which Security Holders May Recommend Nominees to the Board of Directors On February 23, 2023, the Board approved and adopted amended and restated bylaws (the “Bylaws”). The Bylaws address the universal proxy rules adopted by the SEC by clarifying that no person may solicit proxies in support of a director nominee other than the Board’s nominees unless such person has complied with Rule 14a-19 under the Exchange Act, as amended, including the applicable notice and solicitation requirements. Additionally, the Bylaws enhance procedural mechanics and disclosure requirements in connection with stockholder nominations of directors and submissions of proposals regarding other business at stockholder meetings, including requiring additional background information and disclosures regarding proposing stockholders, proposed nominees and business, and other persons related to a stockholder’s solicitation of proxies. Code of Ethics and Conduct We have adopted a code of ethics and business conduct that applies to all employees, including employees of our subsidiaries, as well as each member of our Board of Directors. The code of ethics and business conduct is available at our website at https://ir.system1.com/governance/governance-documents/default.aspx . We intend to satisfy any disclosure requirement under Item 5.05 of Form 8-K regarding an amendment to, or waiver from, a provision of this code of ethics by posting such information on our website, at the address specified above. Audit committee Our audit committee consists of Frank R. Martire, Jr., Moujan Kazerani and Jennifer Prince, with Mr. Frank R. Martire, Jr. serving as chair. Rule 10A-3 of the Exchange Act and the NYSE rules require that our Audit Committee be composed entirely of independent members. Our Board of Directors has affirmatively determined that Mr. Martire, Jr., Mrs. Kazerani and Ms. Prince each meet the definition of “independent director” for purposes of serving on the Audit Committee under Rule 10A-3 of the Exchange Act and the NYSE rules. Each member of our Audit Committee also meets the financial literacy requirements of NYSE listing standards. In addition, our Board of Directors has determined that Mr. Martire qualifies as an “audit committee financial expert,” as such term is defined in Item 407(d)(5) of Regulation S-K. Our audit committee held 7 meetings in 2022. 140 Our audit committee is responsible for, among other things: • selecting and hiring our independent auditors, and approving the audit and non-audit services to be performed by our independent auditors; • assisting the board of directors in evaluating the qualifications, performance, and independence of our independent auditors; • assisting the board of directors in monitoring the quality and integrity of our financial statements and our accounting and financial reporting; • assisting the board of directors in monitoring our compliance with legal and regulatory requirements; • assisting the board of directors in monitoring the performance of our internal audit function; • monitoring the performance of our internal audit function; • reviewing with management and our independent auditors our annual and quarterly financial statements; • establishing procedures for the receipt, retention, and treatment of complaints received by us regarding accounting, internal accounting controls, or auditing matters and the confidential, anonymous submission by our employees of concerns regarding questionable accounting or auditing matters; and • preparing the audit committee report that the rules and regulations of the SEC require to be included in our annual proxy statement. Our audit committee also reviews the related party transaction policy described under “Certain Relationships and Related Party Transactions.” Our audit committee operates under a written charter which is available on our website at https://ir.system1.com/governance/governance-documents/default.aspx. Compensation committee Our compensation committee operates under a written charter which is available on our website at https://ir.system1.com/governance/governance-documents/default.aspx. Nominating and corporate governance committee Our nominating and corporate governance committee operates under a written charter which is available on our website at https://ir.system1.com/governance/governance-documents/default.aspx. Corporate Governance Guidelines Our Board adopted written corporate governance guidelines (the “Corporate Governance Guidelines”) to ensure that the Board had the necessary authority and practices in place to review and evaluate our business operations as needed and to make decisions independent of our management. The guidelines acknowledge the leadership exercised by the Board’s standing committees and their chairs and are intended to serve as a flexible framework within which the Board may conduct its business. The Corporate Governance Guidelines set forth the practices the Board followed with respect to board composition and selection, board meetings and involvement of senior management, Chief Executive Officer performance evaluations and succession planning, and board committees and compensation. The Nominating and Corporate Governance Committee assisted our Board in implementing and adhering to the Corporate Governance Guidelines. The Corporate Governance Guidelines had been reviewed at least annually by the Nominating and Corporate Governance Committee, and changes were recommended to our Board as warranted. The Corporate Governance Guidelines are available on our website at https://ir.system1.com/governance/governance-documents/default.aspx. Board Leadership Structure The Board of Directors does not have a policy regarding the separation of the roles of Chief Executive Officer and Chairman of the Board of Directors, as the Board of Directors believes it is in the best interests of the Company to 141 make that determination based on the position and direction of the Company and the membership of the Board of Directors. The Board of Directors has determined that having the Company’s current Chief Executive Officer serve as Chairman is the best use of the Chief Executive Officer’s extensive knowledge of the Company and its industry and serves to foster greater communication between the Company’s management and the Board of Directors. The Company does not have a lead independent director. Instead, all of the independent directors play an active role on the Board of Directors. The independent directors make up a majority of the Board of Directors, and a majority of the independent directors are or have been leaders in industry with a history of exercising critical thought and sound judgment. At executive sessions of the independent directors no presiding director is appointed and each of the independent directors is given the opportunity to raise issues, make comments or express views. Item 11. Executive Compensation EXECUTIVE AND DIRECTOR COMPENSATION This section discusses the material components of the executive compensation program for our executive officers who are named in the “2022 Summary Compensation Table” below. In 2022, our “named executive officers” and their positions were as follows: • Michael Blend, Chief Executive Officer • Tridivesh Kidambi, Chief Financial Officer • Chris Phillips, Chief Executive Officer of Protected.net Group Limited (“Protected UK”) Mr. Phillips is employed by our subsidiary, Protected UK, as its Chief Executive Officer. Mr. Blend did not receive any cash compensation from us during 2021 or 2022. This discussion may contain forward-looking statements that are based on our current plans, considerations, expectations and determinations regarding future compensation programs. Actual compensation programs that we adopt in the future may differ materially from the currently planned programs summarized in this discussion. 2022 Summary Compensation Table The following table sets forth information concerning the compensation of our named executive officers for the years ended December 31, 2021 and 2022. Name and Principal Position Year Salary ($) Bonus ($)(1) Stock Awards ($)(2) Non-Equity Incentive Plan Compensation ($) All Other Compensation ($)(3) Total ($) Michael Blend 2022 — — 8,488,436 — 27,167 8,515,603 Chief Executive Officer 2021 — — — — — — Tridivesh Kidambi 2022 344,423 579,984 3,515,352 — 58,772 4,498,531 Chief Financial Officer 2021 300,000 — — 75,000 53,585 428,585 Chris Phillips 2022 100,000 (4) 20,000,000 6,372,500 — — 26,472,500 Chief Executive Officer, Protected UK (1) Amounts reflect (i) a one-time discretionary cash bonus paid to Mr. Kidambi in 2022 in recognition of his efforts in connection with the Merger; (ii) a liquidation event bonus paid to Mr. Kidambi as a result of the Merger pursuant to a letter agreement with him; and (iii) a cash bonus paid to Mr. Phillips (through Just Develop It Limited, a company controlled by Mr. Phillips (“JDI”)) related to the restructuring of the earn-out payable in connection with the Company’s acquisition o f Protected UK. For additional information on the amounts described in this Note 1, see “ 2022 Cash Incentive Compensation—One-Time Bonuses ” below. 142 (2) Amounts reflect (i) for Mr. Kidambi, the incremental compensation expense incurred by the Company as a result of the modifi cation of the vesting schedule of the Openmail Series F Units held by him in connection with the Merger; (ii) for Messrs. Blend and Kidambi, the grant-date fair market value of fully-vested shares of Class A comm on stock issued during 2022 in respect of such executive officer’s backstop obligations in connection with the Merger and (iii) for each named executive officer, the full grant-date fair value of restricted stock units granted during 2022 computed in accordance with ASC Topic 718, rather than the amounts paid to or realized by the named individual. We provide information regarding the assumptions used to calculate the value of all stock awards made to our named executive officers in Note 19 to our consolidated financial statements included in our 2022 Annual Report on Form 10-K. For additional information, see “ Equity Compensation ” and “ Equity Issuances in connection with Business Combination ” below. (3) For fiscal year 2022, all other compensation consisted of: (a) For Mr. Blend, Company payment of his health and welfare benefit plan premiums in the amount of $27,167. (b) For Mr. Kidambi, an employer-match contribution to our 401(k) plan in the amount of $9,807; a fitness/technology stipend in the amount of $360; and cash distributions in respect of Openmail Series B Units and Series F Units in the amount of $17,396 and $31,209, respectively. (4) In 2022, Mr. Phillips received his base salary in GBP, which was converted into USD for purposes of this 2022 Summary Compensation Table based on the exchange rate on December 31, 2022 , which was 1.2099. 2022 Salaries Each of our named executive officers (other than Mr. Blend) receives a base salary to compensate for services rendered to our company. The base salary payable to each named executive officer is intended to provide a fixed component of compensation reflecting and accounting for the executive’s skill set, experience, role and responsibilities. Effective January 28, 2022, the base salary for Mr. Kidambi was increased from $300,000 to $350,000 to bring his salary in-line with market salaries for similarly-situated executives. Effective January 1, 2022, Mr. Phillips’ base salary was decreased from $1,200,000 to $100,000. The aggregate base salary amounts earned by our named executive officers for 2022 are set forth above in the Summary Compensation Table in the column entitled “Salary”. 2022 Cash Incentive Compensation 2022 Annual Cash Incentive Compensation Mr. Kidambi is eligible to earn an annual cash incentive under our annual incentive program targeted at $300,000 based on our operating and financial performance, including our annual pro-forma billings-based adjusted EBITDA performance, as well as individual performance. Messrs. Blend and Phillips do not currently (and did not in 2022) participate in our annual cash incentive program. No bonuses were earned or paid to Mr. Kidambi for fiscal year 2022 under our annual incentive program. One-Time Bonuses On February 4, 2022, we paid a one-time bonus to Mr. Kidambi in the amount of $500,000, in recognition of his efforts in connection with the closing of the Merger. Additionally, on February 18, 2022, we paid a one-time bonus to Mr. Kidambi in the amount of $79,984, pursuant to a letter agreement by and between Mr. Kidambi and the Company. Pursuant to such letter agreement, Mr. Kidambi was entitled to receive a cash bonus upon a liquidation event (which included the Merger) equal to the notional interest accrued on distributions in respect of certain of his Openmail units that were waived by him pursuant to the letter, subject to his continued employment through the liquidation event. 143 Further, we paid a one-time bonus to Mr. Phillips ( through JDI) in the amount of $20,000,000 related to the restructuring of an earnout from the Company’s acquisition of Protected UK. This bonus was paid in two equal installments on each of August 30, 2022 and November 29, 2022. Equity Compensation During 2022, we granted awards of restricted stock units covering Company common stock to each of our named executive officers, as described below. Michael Blend’s and Chris Phillip’s Awards On January 27, 2022, each of Mr. Blend and Chris Phillips (through an issuance to JDI) was granted an award of 725,000 restricted stock units which was scheduled to vest and become payable in shares of our common stock only if a “Class D Conversion Event” occurred on or prior to the fifth anniversary of the closing of the Merger. These awards vested in full on March 17, 2022, the date on which a Class D Conversion Event occurred. For purposes of these awards, a Class D Conversion Event was defined as the earlier of: (a) the first day on which the volume weighted average price of our common stock equaled or exceeded $12.50 per share (as adjusted for share splits, share capitalizations, reorganizations, recapitalizations and the like) for any twenty New York Stock Exchange trading days within a period of thirty consecutive New York Stock Exchange trading days; or (b) a change of control of the Company (as defined in the applicable award agreement) if the valuation of our common stock in such change of control equaled or exceeded $12.50 per share (as adjusted for share splits, share capitalizations, reorganizations, recapitalizations and the like). If a Class D Conversion Event did not occur on or prior to the fifth anniversary of the closing of the Merger, then the awards would have been forfeited. These restricted stock units were issued in tandem with dividend equivalents, which represented the right to receive the equivalent value of dividends paid on shares of the common stock underlying such RSUs. Dividend equivalents are credited as of the dividend record dates that occur during the period that the restricted stock units remain outstanding, and paid if and when the restricted stock units to which the dividend equivalents relate vested and the underlying shares of our common stock were issued. Tridivesh Kidambi’s Award On May 10, 2022, Mr. Kidambi was granted an award of 100,000 restricted stock units. The award of restricted stock units was originally scheduled to vest (or vested, as applicable) as to: (i) five percent (5%) on the first anniversary of the vesting commencement date, (ii) three and seventy-five thousands percent (3.75%) on the next four (4) quarterly anniversaries of the vesting commencement date, and (iii) ten percent (10%) on the next eight (8) quarterly anniversaries of the vesting commencement date thereafter, in each case, subject to Mr. Kidambi’s continued service through the applicable vesting date. In February 2023, the vesting schedule of the award was amended so that the restricted stock units are now scheduled to vest (or did vest, as applicable), as to: (A) five percent (5%) on the first anniversary of the vesting commencement date, (B) eleven and twenty-five thousandths percent (11.25%) on the next four (4) quarterly anniversaries of the vesting commencement date, and (C) six and twenty-five thousandths percent (6.25%) on the next eight (8) quarterly anniversaries of the vesting commencement date thereafter, in each case, subject to Mr. Kidambi’s continued service through the applicable vesting date. Equity Issuances in connection with the Merger In connection with their respective backstop obligations in the Merger, each of Messrs. Blend (through an issuance to Lone Star Friends Trust) and Kidambi were issued 235,104 shares and 16,965 shares, respectively, of fully vested Class A common stock of the Company upon the closing of the Merger. For additional information regarding such backstop obligations, see Note 3. Other Elements of Compensation Retirement Plans 144 We currently maintain a 401(k) retirement savings plan for our employees, including our named executive officers, who satisfy certain eligibility requirements. We expect that our named executive officers will continue to be eligible to participate in the 401(k) plan on the same terms as other full-time employees. The Internal Revenue Code allows eligible employees to defer a portion of their compensation, within prescribed limits, on a pre-tax basis through contributions to the 401(k) plan. Currently, we match contributions made by participants in the 401(k) plan up to a specified percentage of the employee contributions, and these matching contributions are fully vested as of the date on which the contribution is made. We believe that providing a vehicle for tax-deferred retirement savings through our 401(k) plan, and making fully vested matching contributions without any minimum prior service period, adds to the overall desirability of our executive compensation package and further incentivizes our employees, including our named executive officers, in accordance with our compensation policies. Employee Benefits and Perquisites Health/Welfare Plans. All of our full-time employees, including our named executive officers, are eligible to participate in our health and welfare plans, which also cover their respective eligible dependents, including: • medical, dental and vision benefits; • medical and dependent care flexible spending accounts; • short-term and long-term disability insurance; and • life insurance. We believe the perquisites described above are necessary and appropriate to provide a competitive compensation package to our named executive officers. No Tax Gross-Ups We do not make gross-up or similar payments to cover any of our named executive officers’ personal income taxes that may pertain to compensation or perquisites paid or provided by our company, including with respect to any taxes that may arise under or by operation of Internal Revenue Code Sections 280G or 409A. OUTSTANDING EQUITY AWARDS AT FISCAL YEAR-END The following table summarizes the number of shares of common stock underlying outstanding equity incentive plan awards held by Mr. Kidambi as of December 31, 2022. Neither Mr. Blend nor Mr. Phillips held any equity awards as of December 31, 2022. Stock Awards Name Grant Date Vesting Commencement Date Number of Shares or Units of Stock That Have Not Vested (#) Market Value of Shares or Units of Stock That Have Not Vested ($)(1) Tridivesh Kidambi 2/1/2019 2/1/2019 109,955(2) $515,689 5/10/2022 1/28/2022 100,000(3) $469,000 6/17/2022 2/15/2021 3,684(4) $17,278 (1) Amounts shown were determined by multiplying the number of shares or units shown in the table by the closing price of our common stock on December 30, 2022 (the last trading day of our last completed fiscal year) of $4.69 per share. 145 (2) Represents Openmail Series F Units that were converted in connection with the Merger into the right to receive shares of Class A and Class C common stock of the Company, and which vested 50% upon the closing of the Merger and vested or are scheduled to vest (as applicable) with respect to the remaining 50% in eight equal installments on each of the first eight quarterly anniversaries of the closing thereafter, subject to the executive’s continued employment through the applicable vesting date. (3) Represents restricted stock units that, as of December 31, 2022, were originally scheduled to vest as to (i) five percent (5%) on the first anniversary of the vesting commencement date, (ii) three and seventy-five thousands percent (3.75%) on the next four (4) quarterly anniversaries of the vesting commencement date, and (iii) ten percent (10%) on the next eight (8) quarterly anniversaries of the vesting commencement date thereafter, in each case, subject to the executive's continued service through the applicable vesting date. In February 2023, the vesting schedule of such award was amended such that these restricted stock units are now scheduled to vest (or did vest, as applicable) as to (i) five percent (5%) on the first anniversary of the vesting commencement date, (ii) eleven and twenty-five thousandths percent (11.25%) on the next four (4) quarterly anniversaries of the vesting commencement date, and (iii) six and twenty-five thousandths percent (6.25%) on the next eight (8) quarterly anniversaries of the vesting commencement date thereafter, in each case, subject to the executive's continued service through the applicable vesting date. (4) Represents restricted stock units that are scheduled to vest (or did vest, as applicable) as to twenty-five percent (25%) on each of the first four anniversaries of the vesting commencement date, subject to the executive's continued service through the applicable vesting date. Executive Compensation Arrangements During 2022, we were party to an employment agreement with Mr. Kidambi, the terms of which are summarized below. Messrs. Blend and Phillips were not a party to employment agreements with us during 2022. Tridivesh Kidambi Employment Agreement In 2022, we were party to an employment agreement with Mr. Kidambi, which was entered into by our predecessor entity in October 2016 and pursuant to which Mr. Kidambi serves as our Chief Financial Officer. Mr. Kidambi’s employment agreement sets forth the initial terms and conditions of his employment, including his initial base salary and signing bonus. Under his employment agreement, if Mr. Kidambi’s employment with us is terminated without “cause” (as defined therein) or by Mr. Kidambi for “good reason” (as defined therein), he will be eligible for the following severance benefits: (i) continued payment of his then-current base salary for 3 months and (ii) company-subsidized COBRA premiums for up to 6 months. Director Compensation The following individuals served as our non-employee directors in 2022: John Civantos, William Foley, Dexter Fowler, Caroline Horn, Moujan Kazerani, Frank Martire, and Jennifer Prince. We maintain a Director Compensation Program for non-employee directors of the Company (the “Non-Employee Director Compensation Program”), which became effective as of February 25, 2022 and is further discussed below under “—Director Compensation Program”. The Non-Employee Director Compensation Program provides for grants of equity awards to our non-employee directors, commencing with the Company’s annual stockholders meeting for 2023 and, accordingly, our non-employee directors were not compensated under the Non-Employee Director Compensation Program for services provided during 2022. However, we did award restricted stock units covering shares of our Class A Common Stock to our non-employee directors in fiscal year 2022. Twenty percent of the restricted stock units subject to each such award vested (or will vest, as applicable) on each quarterly anniversary of January 28, 2022 (or, for Mr. Civantos, February 25, 2022), subject to the applicable non-employee director’s continued service through the applicable vesting date. Additionally, we reimbursed our non-employee directors for their reasonable expenses incurred in attending meetings of the Board and its committees, as well as for certain expenses incurred in connection with attending corporate governance programs. 146 The table below summarizes the compensation we paid to our non-employee directors during the year ended December 31, 2022: Name Stock Awards ($)(1) Total ($) John Civantos $233,775 $233,775 William Foley $249,360 $249,360 Dexter Fowler $263,210 $263,210 Caroline Horn $270,140 $270,140 Moujan Kazerani $304,780 $304,780 Frank Martire $332,480 $332,480 Jennifer Prince $304,770 $304,770 (1) Amounts reflect the full grant-date fair value of restricted stock units granted during 2022 computed in accordance with ASC Topic 718, rather than the amounts paid to or realized by the named individual. We provide information regarding the assumptions used to calculate the value of all stock awards made to our directors in Note 19 to our consolidated financial statements included in our 2022 Annual Report on Form 10-K. The aggregate unvested restricted stock units held as of December 31, 2022 by each non-employee director who was serving as of December 31, 2022 were as follows: John Civantos – 9,000; William Foley – 9,600; Dexter Fowler – 10,134; Caroline Horn – 10,400; Moujan Kazerani – 11,736; Frank Martire – 12,802; and Jennifer Prince – 11,736. Director Compensation Program Going forward, eligible directors are entitled to receive equity compensation for service on the Board under the Non-Employee Director Compensation Program as follows: 1. Annual Awards. Commencing with the Company’s annual stockholders meeting for 2023, the Company will grant an award of restricted stock units with a grant date fair value of $180,000 to each eligible director who is serving on the Board as of the date of the Company’s annual stockholders meeting or who is initially elected or appointed to serve on the Board at such annual meeting and, in either case, who will continue to serve on the Board immediately following such annual meeting. 2. Initial Awards. For eligible directors initially elected or appointed to serve on the Board after the Company’s annual stockholders meeting for the 2023 calendar year (and other than on the date of an annual meeting), the Company will grant an award of restricted stock units with a grant date fair value of $180,000, multiplied by a fraction, (a) the numerator of which is the difference between 365 and the number of days from the immediately preceding annual stockholders meeting date through the appointment or election date and (b) the denominator of which is 365. 3. Committee Awards. Commencing with the Company’s annual stockholders meeting for 2023, for eligible directors serving on a committee of the Board, the Company will grant awards of restricted stock units as follows (prorated for any partial year of service): a. Audit Committee Awards. The Company will grant an award of restricted stock units with a grant date fair value of $50,000 to the eligible director who serves as Chairperson of the Audit Committee and an award of restricted stock units with a grant date fair value of $20,000 to each eligible director who serves as a member of the Audit Committee (other than the Chairperson of the Audit Committee). b. Compensation Committee Awards. The Company will grant an award of restricted stock units with a grant date fair value of $20,000 to the eligible director who serves as Chairperson of the Compensation Committee and an award of restricted stock units with a grant date fair value of $10,000 to each eligible director who serves as a member of the Compensation Committee (other than the Chairperson of the Compensation Committee). 147 c. Nominating and Corporate Governance Committee Awards. The Company will grant an award of restricted stock units with a grant date fair value of $15,000 to the eligible director who serves as Chairperson of the Nominating and Corporate Governance Committee and an award of restricted stock units with a grant date fair value of $10,000 to each eligible director who serves as a member of the Nominating and Corporate Governance Committee (other than the Chairperson of the Nominating and Corporate Governance Committee). The number of shares subject to any award will be determined by dividing the value of such award (subject to proration as provided in the terms of the Non-Employee Director Compensation Program) by the closing price for the Company’s Class A Common Stock, par value $0.0001 per share (the “Class A Common Stock”), on the New York Stock Exchange (or any applicable securities exchange on which the Company’s Class A Common Stock is then-listed) on the applicable grant date (or on the immediately preceding trading day if the applicable grant date is not a trading day). Each award shall vest as to twenty-five percent (25%) of the award on each of the first three (3) quarterly anniversaries of the applicable grant date, and as to the remaining twenty-five percent (25%) of the award on the earlier to occur of (x) the one-year anniversary of the applicable grant date and (y) the date of the next annual meeting of stockholders following the grant date, subject to the applicable eligible director’s continued service on the Board (or a committee of the Board, as applicable). All awards of the Non-Employee Director Compensation Program will be granted under, and shall be subject to the terms and provisions of, the Award Plan. 148 Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters The following table sets forth information known to us with respect to beneficial ownership of our common stock as of April 20, 2023 for (i) each member of our Board, (ii) each holder of 5.0% or greater of our common stock, (iii) our Named Executive Officers and executive officers, and (iv) all executive officers and directors as a group. Beneficial ownership is determined in accordance with the rules and regulations of the SEC. Shares subject to options that are exercisable within 60 days following April 20, 2023 are deemed to be outstanding and beneficially owned by the optionee for the purpose of computing share and percentage ownership of that optionee, but are not deemed to be outstanding for the purpose of computing the percentage ownership of any other person. The percentage of shares beneficially owned is based on 93,252,365 shares of Class A Common Stock and 21,512,757 shares of Class C Common Stock outstanding as of April 20, 2023. Except as affected by applicable community property laws, all persons listed have sole voting and investment power for all shares shown as beneficially owned by them. Name of Beneficial Owner Shares of Class A Common Stock+ Class A Common Stock Beneficial Ownership Percentage Voting Power Percentage++ Directors and Executive Officers Michael Blend (1) 760,000 * * Brian Coppola (2) 417,897 * * Tridivesh Kidambi (3) 1,204,952 1.3 % 1.0 % Jen Robinson (4) 65,938 * * Beth Sestanovich (5) 317,957 * * Daniel Weinrot (6) 154,455 * * John Civantos (7) 288,646 * * Dexter Fowler (8) 25,333 * * Caroline Horn (9) 26,000 * * Moujan Kazerani (10) 90,534 * * Frank R. Martire, Jr. (11) 4,482,879 4.8 % 3.9 % Christopher Phillips (12) 18,672,586 20.0 % 16.3 % Jennifer Prince (13) 29,333 * * All Directors and Executive Officers (13 Individuals) 26,436,510 28.3 % 23.0 % Greater than 5% Holders Cannae Holdings, LLC (14) 27,122,794 29.1 % 23.6 % Stanley Blend (15) 16,411,892 17.6 % 14.3 % Nicholas Baker (16) 7,699,449 8.3 % 6.7 % Notes : * Represents beneficial ownership of less than 1%. + Represents shares of Class A Common Stock that the stockholders shown (i) beneficially own as of April 20, 2023 or (ii) have the right to acquire within 60 days upon exercise of (a) warrants, stock options and restricted stock units (“RSUs”) held by the stockholder or (b) the stockholder’s redemption right of any Class B Units in S1 Holdco held by such stockholder as described in the immediately subsequent footnote below. The shares included in this column are deemed to be outstanding in calculating the percentage ownership of Class A Common Stock of such stockholder, but are not deemed to be outstanding as to any other stockholder. ++ Includes shares that the stockholders shown have the right to acquire as of April 20, 2023 or within 60 days thereafter as described in immediately preceding footnote above. Assumes redemption of all Class B Units by all members of S1 Holdco (and cancellation of the corresponding shares of Class C Common Stock of the Company) for shares of Class A Common Stock, which would have resulted in an additional 21,512,757 shares 149 of Class A Common Stock outstanding as of April 20, 2023. Holders of Class B Units of S1 Holdco are entitled to have their Class B Units of S1 Holdco exchanged or redeemed for Class A Common Stock on a one-for-one basis or, at the election of the Company, a cash payment in an amount per Class B Unit of S1 Holdco redeemed and calculated based on the volume weighted average market price of a share of Class A Common Stock at the time of redemption. The Class B Units of S1 Holdco do not have voting rights, but holders of Class B Units of S1 Holdco own a corresponding number of shares of Class C Common Stock of the Company, which have voting rights and vote together with the shares of Class A Common Stock. (1) Consists of 35,000 Public Warrants exercisable for 35,000 shares of Class A Common Stock at an exercise price of $11.50 per share and 725,000 shares of Class A Common Stock, in each case held directly by Mr. Blend. Excludes (i) 58,766 shares of Class A Common Stock and 327,681 shares of Class A Common Stock issuable upon the exchange or redemption of 327,681 Class B Units of S1 Holdco (and cancellation of the corresponding shares of Class C Common Stock of the Company), in each case, held by OpenMail2, LLC (“OpenMail2”) and (ii) 1,045,077 shares of Class A Common Stock and 251,379 Class B Units of S1 Holdco (and the corresponding shares of Class C Common Stock of the Company), in each case, directly held by the Blend Family Foundation. OpenMail2 is jointly controlled by Michael Blend, Charles Ursini and Tridivesh Kidambi as members of the board of managers thereof and they may be deemed to jointly control the voting and dispositive power over the shares held by OpenMail2. The directors of the Blend Family Foundation are Michael Blend, Sandra Blend and Stanley Blend. The terms of the Public Warrants are set forth in the Warrant Agreement filed with the SEC on June 22, 2020 as Exhibit 4.1 to the Issuer’s Current Report on Form 8-K. (2) Consists of (i) 114,360 shares of Class A Common Stock and 288,126 shares of Class A Common Stock issuable upon the exchange or redemption of 288,126 Class B Units of S1 Holdco (and cancellation of the corresponding shares of Class C Common Stock of the Company) held directly by Mr. Coppola, (ii) 2,812 shares of Class A Common Stock issuable from vested RSUs awarded to the securityholder and (iii) 1,916 shares of Class A Common Stock and 10,683 shares of Class A Common Stock upon the exchange of 10,683 Class B Units of S1 Holdco (and cancellation of the corresponding shares of Class C Common Stock of the Company) issuable within 60 days, in each case from OpenMail2. (3) Consists of (i) 15,000 Public Warrants exercisable for 15,000 shares of Class A Common Stock at an exercise price of $11.50 per share held directly by Mr. Kidambi, (ii) 525,293 shares of Class A Common Stock and 617,903 shares of Class A Common Stock issuable upon the exchange or redemption of 617,903 Class B Units of S1 Holdco (and cancellation of the corresponding shares of Class C Common Stock of the Company), in each case held directly by Mr. Kidambi, (iii) 15,518 shares of Class A Common Stock held by Mr. Kidambi’s spouse (who is also an employee of the Company), (iv) an aggregate of 3,750 shares of Class A Common Stock issuable within 60 days from vested RSUs awarded collectively to Mr. Kidambi and Mr. Kidambi’s spouse and (v) 4,180 shares of Class A Common Stock and 23,309 shares of Class A Common Stock upon the exchange of 23,309 Class B Units of S1 Holdco (and cancellation of the corresponding shares of Class C Common Stock of the Company) issuable within 60 days, in each case from OpenMail2. (4) Consists of (i) 52,289 shares of Class A Common Stock held directly by Ms. Robinson and (ii) 13,649 shares of Class A Common Stock issuable within 60 days from vested RSUs awarded to the securityholder. (5) Consists of (i) 74,192 shares of Class A Common Stock and 235,789 shares of Class A Common Stock issuable upon the exchange or redemption of 235,789 Class B Units of S1 Holdco (and cancellation of the corresponding shares of Class C Common Stock of the Company) held by Ms. Sestanovich, (ii) 2,250 shares of Class A Common Stock issuable within 60 days from vested RSUs awarded to the securityholder and (iii) 871 shares of Class A Common Stock and 4,856 shares of Class A Common Stock upon the exchange of 4,856 Class B Units of S1 Holdco (and cancellation of the corresponding shares of Class C Common Stock of the Company) issuable within 60 days, in each case from OpenMail2. (6) Consists of (i) 57,860 shares of Class A Common Stock and 88,390 shares of Class A Common Stock issuable upon the exchange or redemption of 88,390 Class B Units of S1 Holdco (and cancellation of the corresponding shares of Class C Common Stock of the Company) held by Mr. Weinrot, (ii) 2,250 shares of Class A Common Stock issuable within 60 days from vested RSUs awarded to the securityholder and (iii) 906 shares of Class A Common Stock and 5,050 shares of Class A Common Stock issuable upon the exchange of 5,050 Class B Units 150 of S1 Holdco (and cancellation of the corresponding shares of Class C Common Stock of the Company) issuable within 60 days, in each case from OpenMail2. (7) Consists of (i) 90,534 shares of Class A Common Stock held directly by Mr. Civantos, (ii) 100,000 Public Warrants exercisable for 100,000 shares of Class A Common Stock at an exercise price of $11.50 per share held directly by Mr. Civantos, (iii) 4,500 shares of Class A Common Stock issuable within 60 days from vested RSUs awarded to the securityholder and (iv) 75,612 shares of Class A Common Stock securities held by the John Civantos 2011 Family Trust, which shares held by the trust Mr. Civantos disclaims beneficial interest in such securities except to any pecuniary interest therein. (8) Consists of (i) 20,267 shares of Class A Common Stock held directly by Mr. Fowler and (ii) 5,067 shares of Class A Common Stock issuable within 60 days from vested RSUs awarded to the securityholder. (9) Consists of (i) 20,800 shares of Class A Common Stock held directly by Ms. Horn and (ii) 5,200 shares of Class A Common Stock issuable within 60 days from vested RSUs awarded to the securityholder. (10) Consists of (i) 43,967 shares of Class A Common Stock and 40,700 shares of Class A Common Stock issuable upon exercise of 40,700 Public Warrants, in each case held directly by Mr. Kazerani, the spouse of Ms. Kazerani, (ii) 5,867 shares of Class A Common Stock issuable within 60 days from vested RSUs awarded to the securityholder and (iii) 12,000 shares of Class A Common Stock held by Ms. Kazerani’s in-laws, over which shares Ms. Kazerani’s spouse has voting and dispositive power pursuant to a power of attorney granted to him. (11) Consists of (i) 25,600 shares of Class A Common Stock held directly by Mr. Martire, (ii) 4,450,879 shares of Class A Common Stock directly held by BGPT Trebia LP (the "BGPT Sponsor"), (iii) 6,400 shares of Class A Common Stock issuable within 60 days from vested RSUs awarded to the security holder, and (iv) 616,250 shares of Class A Common Stock from the automatic conversion of 616,250 shares of Class D Common Stock held by the BGPT Sponsor. Under the Company's Certificate of Incorporation, the BGPT Sponsor’s shares of Class D Common Stock automatically converted into Class A Common Stock on a one-for-one basis on March 17, 2022, the first trading day that the volume-weighted average price of Class A Common Stock equaled or exceeded $12.50 per share for 20 trading days within a period of 30 consecutive trading days. The sole general partner of BGPT Sponsor is Bridgeport Partners GP LLC and the sole limited partner of BGPT Sponsor is Bridgeport Partners LP. Each of Frank R. Martire, Jr. and Frank Martire, III serve as a managing member of Bridgeport Partners GP LLC and therefore may be deemed to beneficially own the 4,450,879 shares of Class A Common Stock, and ultimately exercises voting and dispositive power over such shares held by BGPT Sponsor. Each of Frank R. Martire, Jr. and Frank Martire, III disclaims beneficial ownership of these shares and warrants except to the extent of any pecuniary interest therein. (12) Consists of shares of Class A Common Stock held directly by Just Develop It Limited. The principal address of Just Develop It Limited is Larch House, Parklands Business Park, Denmead, Hampshire, X0 P07 6XP, United Kingdom. (13) Consists of (i) 23,466 shares of Class A Common Stock held directly by Ms. Prince and (ii) 5,867 shares of Class A Common Stock issuable within 60 days from vested RSUs awarded to the securityholder. (14) Consists of shares of Class A Common Stock held directly by Cannae Holdings, LLC (“CHL”). CHL is a wholly-owned subsidiary of Cannae Holdings, Inc. ("CHI"). The address of the principal business office of CHI is 1701 Village Center Circle, Las Vegas, Nevada 89134. Class A Common Stock ownership is based on information known as of March 14, 2023, the date of the reporting person's most recent Schedule 13D filing as of the record date. (15) Consists of (i) 6,728,498 shares of Class A Common Stock and 8,452,999 shares of Class A Common Stock issuable upon the exchange or redemption of 8,452,999 Class B Units of S1 Holdco (and the corresponding shares of Class C Common Stock of the Issuer), in each case, directly held by Lone Star Friends Trust, over which Mr. Blend is the trustee with sole voting and dispositive power (ii) 592,514 shares of Class A Common Stock and 251,379 shares of Class A Common Stock issuable upon the exchange or redemption of 251,379 Class B Units of S1 Holdco (and the corresponding shares of Class C Common Stock of the Issuer) directly held by the Dante Jacob Blend Trust, for which Mr. Blend is the trustee, (iii) 592,514 shares of Class A Common Stock and 251,379 shares of Class A Common Stock issuable upon the exchange or redemption of 251,379 Class B Units of S1 Holdco (and the corresponding shares of Class C Common Stock of the Issuer) directly held by the Nola Delfina Blend Trust, for which Mr. Blend is the trustee, and (iv) 45,367 shares directly held by Mr. Blend in his individual capacity. 151 (16) Consists of (i) 7,208,087 shares held directly by Mr. Baker and (ii) 491,362 shares held directly by Honix Capital Limited, a limited private company registered in England and Wales (“Honix”). Mr. Baker is the sole director and controlling stockholder of Honix and has the sole voting and dispositive power over the securities held by Honix. Class A Common Stock ownership is based on information known as of September 9, 2022, the date of the reporting person's most recent Schedule 13D filing as of the record date. Equity Compensation Plan Information The following table provides information as of as of December 31, 2022, with respect to the shares of the Company’s Common Stock that may be issued under the Company’s existing compensation plans. Number of Securities to be Issued Upon Exercise of Outstanding Options, Warrants and Rights Weighted Average Exercise Price of Outstanding Options, Warrants and Rights Number of Securities Remaining Available for Future Issuance Under Equity Compensation Plans (1) Equity compensation plans approved by security holders — — 3,186,531 Equity compensation plans not approved by security holders — — — Totals — — 3,186,531 _____________________ (1) Consists of shares available for future issuance under our 2022 Incentive Award Plan. The number of shares available for issuance under the 2022 Incentive Award Plan will be annually increased on January 1 of each calendar year (beginning in 2023 and ending in 2032) by an amount equal to the lesser of (i) 2.5% of the total number of shares of Common Stock outstanding on the final day of the immediately preceding calendar year and (ii) such smaller number of shares as is determined by our Board. Item 13. Certain Relationships and Related Transactions, and Director Independence Certain Relationships and Related Transactions (Dollars in thousands, except for per share amounts) Trebia Transactions On July 13, 2021 BGTP Trebia LP, a Delaware limited partnership (the "BGPT Sponsor") and Trasimene Trebia, LP, a Delaware limited partnership (the "Trasimene Sponsor", and together with the BGPT Sponsor, the "Sponsors") made available to the Company a loan of up to $500,000 pursuant to two promissory notes issued to the Company from the BGPT Sponsor in the amount of $212,500 (the “BGPT Note”) and to Trasimene Sponsor $287,500 (the “Trasimene Note”). The Company is entitled to submit drawdown requests to the Sponsor from time to time and the proceeds from any amounts borrowed under the note will be used for on-going operational expenses and certain other expenses. The notes are unsecured, non-interest bearing and mature on the earlier of: (i) May 31, 2022, or (ii) the date on which the Company consummates a Business Combination. On July 13, 2021, the Company drew-down $106,250 under the BGPT Note and $143,750 under the Trasimene Note. On August 9, 2021, the Company drew-down an additional $75,000 under the BGPT Note. As of December 31, 2021, the outstanding balance under the promissory notes was $450,000. Upon the closing of the Merger, the outstanding Notes were satisfied and extinguished. The Company was party to an administrative services agreement pursuant to which Trebia will pay BGPT Sponsor a total of $10,000 per month, until the earlier of the completion of the Merger and the liquidation of the trust assets, for office space, utilities, administrative and support services. For the year ended December 31, 2021 and the period between February 11, 2020 and December 21, 2020, the Company had incurred $120,000 and $65,000 in fees for these services, respectively. After the completion of the Merger, this agreement was terminated. Investment in Protected by Lone Investment Holdings On October 16, 2018, S1 Holdco and its subsidiaries purchased a 50.1% interest in Protected for $55,000. At the time of the transaction, an investment vehicle known as Lone Investment Holdings ("LIH") was a shareholder and creditor of Protected. LIH owned 7.7% of the equity of Protected, and also was a creditor for $10,500, with respect to shareholder loans for which Protected was the obligor. LIH’s shareholders primarily consist of members of the Company’s management team. As a result of the Merger, LIH’s shareholder loan to Protected was repaid, with interest, and LIH also received $1,158 in proceeds from the sale of its equity. 152 Loan to Former Chief Executive Officer During 2021, S1 Holdco extended a loan of $1,500 to Ian Weingarten, its former Chief Executive Officer, in connection with his separation agreement. In January 2022, in conjunction with the consummation of the Merger, the loan was repaid in full. Services with Paysafe Protected.net utilizes multiple payment processors in order to process credit card payments from its subscription customers, including Paysafe Financial Services Limited (“Paysafe”). In March 2021 Paysafe completed a merger with Foley Trasimene Acquisition Corp. II (“Foley Trasimene”), a special purpose acquisition company sponsored by entities affiliated with William Foley, who was also a sponsor of Trebia Acquisition Corp. and was a member of the Company’s Board of Directors during 2022. Protected.net’s payment processing agreement with Paysafe was negotiated before the announcements of both (i) the Merger as well as (ii) the business combination between Paysafe and Foley Trasimene. The amount due from Paysafe was $2,447 as of December 31, 2022 (Successor). Agreements with JDI Property Holdings The Company has agreements with JDI Property Holdings Limited (“JDIP”), an entity controlled by Christopher Phillips, a director of the Company, which allows for the Company to occupy desks at JDIP’s property in such a place as JDIP specifies from time to time in exchange for GBP 52 per month. The agreements with JDIP expire on October 31, 2026. Additionally, the Company utilizes a JDIP credit card and the Company reimburses JDIP monthly. The amount owed to JDIP was insignificant as of December 31, 2022 (Successor). Waiver of Payments to Director and Greater-than-5% Stockholder On August 30, 2022, the Company, Protected.net and Just Develop It Limited (“JDI”), an entity controlled by a director of the Company, entered into a Conditional Consent, Waiver and Acknowledgement (the “Waiver”) pursuant to which JDI agreed to waive its right to the Year 3 Stock Bonus Pool, as such term is defined in the Business Combination Agreement, dated as of June 28, 2021 (as amended, the “Business Combination Agreement”) by and among the Company, S1 Holdco, Protected and the other parties signatory thereto in connection with the Merger, consisting of $50,000 of Class A common stock payable in January 2024 and as set forth in Section 12.11(a) of the Business Combination Agreement in exchange for $40,000 in cash payable in four (4) quarterly installments of $10,000 each, commencing on August 30, 2022 and on each three (3) month anniversary thereafter. In connection with entering into the Waiver, the Company entered into one (1) year contractual lockup agreements with each of Christopher Phillips, a member of the Board of Directors of the Company and the controlling shareholder of JDI (on behalf of himself and JDI), pursuant to which Mr. Phillips and JDI agreed not to sell each their shares of Class A common stock for one year from September 1, 2022 through August 30, 2023 (the “Lockup Period”); provided that Mr. Phillips and JDIL may sell Class A common stock, among other exceptions, at any time during the Lockup Period at prices equal to or in excess of $11.00 per share. Revolving Note from Company Co-Founders On April 10, 2023, Orchid Merger Sub II, LLC (“Orchid Sub”), a wholly-owned subsidiary of the Company, entered into a $20,000 revolving note (the “Revolving Note”) with Lone Star Friends Trust (acting by and through its trustee, Stanley Blend, “Lone Star”) and CEE Holding Trust (acting by and through its trustee, Jackson Hole Trust Company, “CEE”, and together with Lone Star, collectively, the “Lenders” and each, a “Lender”), which are trusts established for the benefit of Michael Blend (Chief Executive Officer, co-founder and stockholder) and Charles Ursini (co-founder and stockholder), respectively, in a private transaction approved by the independent and non-interested members of the the Board. Each Lender provided a $10,000 commitment for an aggregate principal of $20,000 under the Revolving Note to Orchid Sub on a several but not joint basis (each, a “Commitment” and, collectively, the “Commitments”). Any borrowed loan amounts outstanding under the Revolving Note accrue interest at the rate per annum equal to the Secured Overnight Financing Rate (“SOFR”) as administered by the Federal Reserve Bank of New York plus 153 3.15%. Orchid Sub may borrow amounts under the Revolving Note in increments of $100, and may prepay any amounts borrowed at any time without penalty or interest (other than applicable breakage costs, if any). The final maturity date under the Revolving Note is July 10, 2024. The Lenders are also entitled to (i) an unused commitment fee equal to 1.0% per annum of the actual daily amount of total unfunded Commitments under the Revolving Note during the period from the closing date to the maturity date, payable quarterly in arrears and (ii) a closing fee equal to 12.0% of each Lender’s Commitment under the Revolving Note, payable within 180 days of April 10, 2023. In addition, Orchid Sub agreed to reimburse the Lenders for their reasonable and documented costs expenses incurred in connection with the negotiation, documentation and execution of the Revolving Note. Indemnification agreements We have entered into indemnification agreements with each of our directors and executive officers. These indemnification agreements, our Charter and our Bylaws require us to indemnify our directors to the fullest extent not prohibited by Delaware law. Subject to certain limitations, our Bylaws also require us to advance expenses incurred by our directors and officers. There is no pending litigation or proceeding naming any of our directors or officers to which indemnification is being sought, and we are not aware of any pending or threatened litigation that may result in claims for indemnification by any director or officer. Employment of a Family Member One employee of the Company, who is the spouse of an executive officer, received total compensation of $528 , which includes proceeds from the Merger, during 2022. Policies and procedures for related party transactions We have adopted a related-party transaction policy setting forth the policies and procedures for the review and approval or ratification of transactions involving us and “related persons.” For the purposes of this policy, “related persons” includes our executive officers and directors or their immediate family members, stockholders owning five percent or more of our outstanding common stock and their immediate family members and entities in which any of the foregoing persons is a partner or principal or in a similar position or in which such person has a ten percent or greater beneficial ownership interest. The policy covers, with certain exceptions set forth in Item 404 of Regulation S-K under the Securities Act, any transaction, arrangement or relationship, or any series of similar transactions, arrangements or relationships in which we were or are to be a participant, where the amount involved exceeds $120,000 and a related person had or will have a direct or indirect material interest, including, without limitation, purchases of goods or services by or from the related person or entities in which the related person has a material interest, indebtedness, guarantees of indebtedness and employment by us of a related person. In reviewing and approving any such transactions, our audit committee is tasked to consider all relevant facts and circumstances, including, but not limited to, whether the transaction is on terms comparable to those that could be obtained in an arm’s length transaction with an unrelated party and the extent of the related person’s interest in the transaction. All related-party transactions may only be consummated if our audit committee has approved or ratified such transaction in accordance with the guidelines set forth in the policy. Any member of the audit committee who is a related person with respect to a transaction under review will not be permitted to participate in the deliberations or vote respecting approval or ratification of the transaction. However, such director may be counted in determining the presence of a quorum at a meeting of the audit committee that considers the transaction. Director Independence New York Stock Exchange (“NYSE”) listing standards require that a majority of our Board be independent. An “independent director” is defined generally as a person other than an officer or employee of the company or its subsidiaries or any other individual having a relationship which in the opinion of the company’s board of directors, would interfere with the director’s exercise of independent judgment in carrying out the responsibilities of a director. 154 In making these determinations, the Board has considered information provided by the directors and management with regard to the business and personal activities, relationships and related party transactions of each director. Our Board has determined that Mmes. Horn, Kazerani and Prince and Messrs. Civantos, Fowler, and Martire are “independent directors” as defined in the NYSE listing standards and applicable SEC rules. Our independent directors will have regularly scheduled meetings at which only independent directors are present. Item 14. Principal Accountant Fees and Services Independent Registered Public Accounting Firm Fees Our audit committee has selected PwC to serve as our independent registered public accounting firm to audit the consolidated financial statements of System1, Inc. for the fiscal year ending December 31, 2023. PwC has served as our auditor since 2020. A representative of PwC is expected to be present virtually at the annual meeting to respond to appropriate questions and make a statement if he or she so desires. The following table sets forth the aggregate fees billed by PwC for the fiscal years ended December 31, 2022 and December 31, 2021: Fee Category 2022 2021 Audit Fees (1) $ 8,613,000 $ 1,100,000 Audit Related Fees — — Tax Fees (2) 233,629 — All Other Fees (3) 4,150 4,150 Total $ 8,850,779 $ 1,104,150 (1) Audit Fees consisted of professional services rendered for the audit of our annual consolidated financial statements; the review of our quarterly consolidated financial statements; review of Form S-1s, comfort letters, consents, and assistance with and review of other documents filed with the SEC; and other accounting and financial reporting consultation and research work billed as audit fees or necessary to comply with the standards of the Public Company Accounting Oversight Board (United States). (2) Tax fees consisted of fees for tax compliance, advice, and planning services and consisted primarily of restructuring advice, review of transfer pricing, and international tax advice related to equity compensation. (3) All Other Fees are related to license fees for accounting research software. Pre-Approval of Audit and Non-Audit Services The audit committee pre-approves all audit, audit-related, tax, and other services performed by our independent auditors. The audit committee pre-approves specific categories of services up to pre-established fee thresholds. Unless the type of service had previously been pre-approved, the audit committee must approve that specific service before the independent auditors may perform it. In addition, separate approval is required if the amount of fees for any pre-approved category of service exceeds the fee thresholds established by the audit committee. The audit committee has delegated to the chair of the committee pre-approval authority with respect to permitted services, provided that the chair must report any pre-approval decisions to the committee at its next scheduled meeting. All fees described below were pre-approved by the audit committee. 155 Part IV Item 15. Exhibits and Financial Statement Schedules (a) We have filed the following documents as part of this Annual Report on Form 10-K: 1. Consolidated Financial Statements Refer to Index to Consolidated Financial Statements in “ Item 8. Financial Statements and Supplementary Data ” herein. 2. Financial Statement Schedules No financial statement schedules are provided because the information called for is not required or is shown in the financial statements of the notes thereto. 3. Exhibits Exhibits required to be filed as part of this report are: Incorporated by Reference Filed or Furnished Herewith Exhibit No. Description Form File No. Exhibit Filing Date 2.1(a) Business Combination Agreement, dated as of June 28, 2021, by and among Trebia Acquisition Corp., S1 Holdco, LLC, System1 SS Protect Holdings, Inc., and the other parties that are signatory thereto. 8-K 001-39331 2.1 6/29/2021 0 2.1(b) Amendment No. 1 to the Business Combination Agreement, dated as of November 30, 2021, by and among Trebia Acquisition Corp., S1 Holdco, LLC, System1 SS Protect Holdings, Inc., and the other parties that are signatory thereto. S-4 333-260714 2.2 12/1/2021 2.1(c) Amendment No. 2 to the Business Combination Agreement, dated January 10, 2022, by and among S1 Holdco, LLC, a Delaware limited liability company, System1 SS Protect Holdings, Inc., a Delaware corporation and the other parties signatory thereto. 8-K 001-39331 10.1 1/20/2022 2.1(d) Amendment No. 3 to the Business Combination Agreement, dated January 25, 2022, by and among S1 Holdco, LLC, a Delaware limited liability company, System1 SS Protect Holdings, Inc., a Delaware corporation and the other parties signatory thereto. 8-K 001-39331 10.1 1/26/2022 3.1 Certificate of Incorporation of System1, Inc. 8-K 001-39331 3.1 2/2/2022 3.2 Second Amended and Restated Bylaws of System1, Inc. 8-K 001-39331 3.1 3/1/2023 4.1 Warrant Agreement, dated June 19, 2020, by and between Trebia Acquisition Corp. and Continental Stock Transfer & Trust Company, as warrant agent. 8-K 001-39331 4.1 6/2/2020 4.2 Description of Registrant’s Securities Registered Pursuant to Section 12 of the Securities Exchange Act of 1934 X 10.1^ System1, Inc. 2022 Incentive Award Plan. 8-K 001-39331 10.2 2/20/2022 10.2 Amended and Restated Backstop Facility Agreement, dated January 10, 2022, by and between Trebia Acquisition Corp. and Cannae Holdings, Inc. 8-K 001-39331 10.3 1/10/2022 10.3 Conditional Consent, Waiver and Acknowledgement, dated as of August 30, 2022, by and among System1, Inc., Protected.net Group Limited and Just Develop It Limited. 8-K 001-39331 10.1 8/30/2022 156 10.4 Lock-Up Agreement, dated as of August 30, 2022, by and between System1, Inc. and Christopher Phillips. 8-K 001-39331 10.2 8/30/2022 10.5 Lock-Up Agreement, dated as of August 30, 2022, by and between System1, Inc. and Nicholas Baker. 8-K 001-39331 10.3 8/30/2022 10.6 Transition and Advisory Services Agreement, dated as of November 2, 2022, by and among System1, Inc. and Paul Filsinger. 8-K 001-39331 10.4 11/2/2022 10.7# Credit and Guaranty Agreement, dated as of January 27, 2022, among Orchid Finco LLC, System1 Midco, LLC, Orchid Merger Sub II, LLC and the subsidiaries from time to time party thereto, S1 Holdco, LLC, Bank of America, N.A. and the lenders from time to time party thereto. X 10.8 Amended and Restated Revolving Note, dated May 16, 2023, by and among Orchid Merger Sub II, LLC, Lone Star Friends Trust and CEE Holding Trust . X 10.9 Registration Rights Agreement, dated January 27, 2022, by and among System1, Inc. and the other parties that are signatory thereto. S-1 333-262608 10.3 2/9/2022 10.10 Registration Rights Agreement, dated June 19, 2020, among the Company, the Sponsors and certain other security holders named therein. 8-K 001-39331 10.2 06/22/2020 10.11 Form of Indemnification Agreement 8-K 001-39331 10.4 3/2/2022 10.12^ Employment Agreement, dated as of September 19, 2016, between Tridivesh Kidambi and OpenMail LLC. X 10.13^ Employment Agreement, dated as of August 28, 2016, between Elizabeth Sestanovich and OpenMail LLC. X 10.14^ Employment Agreement, dated as of September 15, 2015, between Brian Coppola and OpenMail LLC. X 10.15^ Employment Agreement, dated as of February 8, 2018, between Daniel Weinrot and OpenMail LLC. X 10.16^ Employment Agreement, dated as of May 2, 2021, between Jennifer Robinson and System1, LLC. X 10.17 Form of Stockholders Agreement S-4/A 333-260714 10.3 12/16/2021 10.18 First Amendment to Conditional Consent, Waiver and Acknowledgement X 21.1 Subsidiaries of Registrant X 23.1 Consent of PricewaterhouseCoopers LLP. (predecessor) X 23.2 Consent of PricewaterhouseCoopers LLP. (successor) X 31.1* Certification of principal executive officer pursuant to Rules 13a-15(e) and 15d-15(e), as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 X 31.2* Certification of principal financial and accounting officer pursuant to Rules 13a-15(e) and 15d-15(e), as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 X 32.1** Certification of principal executive officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 X 157 32.2** Certification of principal financial and accounting officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 X 101.INS* 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. 101.SCH* XBRL Taxonomy Extension Schema Document. 101.CAL* XBRL Taxonomy Extension Calculation Linkbase Document. 101.DEF* XBRL Taxonomy Extension Definition Linkbase Document. 101.LAB* XBRL Taxonomy Extension Labels Linkbase Document. 101.PRE* XBRL Taxonomy Extension Presentation Linkbase Document. 104* Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101) * Filed herewith. ** This certification shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, or otherwise subject to the liability of that section, nor shall it be deemed to be incorporated by reference into any filing under the Securities Act of 1933 or the Securities Exchange Act of 1934. ^ Indicates management contract or compensatory plan. # Schedules and exhibits have been omitted pursuant to Item 601(a)(5) of Regulation S-K. The Registrant will furnish copies of any such schedules and exhibits to the SEC upon request. Item 16. Form 10-K Summary None. 158 Signatures Pursuant to the requirements of the Securities Act of 1933, the registrant has duly caused this Registration Statement to be signed on its behalf by the undersigned hereunto duly authorized, on this 5th day of June, 2023. SYSTEM1, INC. Date: June 5, 2023 By: /s/ Michael Blend Michael Blend Chief Executive Officer and Director (Principal Executive Officer) Signatures KNOW ALL PERSONS BY THESE PRESENTS, that each person whose signature appears below constitutes and appoints Michael Blend and Trividesh Kidambi, jointly and severally, as his or her true and lawful attorneys-in-fact and agents, with full power of substitution and resubstitution, for him or her and in 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 Securities and Exchange Commission, granting unto said attorneys-in-fact and agents, and each of them, full power and authority to do and perform each and every act and thing requisite and necessary to be done in connection therewith, as fully to all intents and purposes as he or she might or could do in person, hereby ratifying and confirming that all said attorneys-in-fact and agents, or any of them or their or his or her substitute or substitutes, may lawfully do or cause to be done by virtue hereof. Pursuant to the requirements of the Securities Act of 1933, this Registration Statement has been signed by the following persons in the capacities held on the dates indicated. 159 Signature Title Date /s/ Michael Blend Chief Executive Officer, Director June 5, 2023 Michael Blend (Principal Executive Officer) /s/ Tridivesh Kidambi Chief Financial Officer June 5, 2023 Tridivesh Kidambi (Principal Financial and Accounting Officer) /s/ John Civantos Director June 5, 2023 John Civantos /s/ Dexter Fowler Director June 5, 2023 Dexter Fowler /s/ Caroline Horn Director June 5, 2023 Caroline Horn /s/ Moujan Kazerani Director June 5, 2023 Moujan Kazerani /s/ Frank R. Martire, Jr. Director June 5, 2023 Frank R. Martire, Jr. /s/ Christopher Phillips Director June 5, 2023 Christopher Phillips /s/ Jennifer Prince Director June 5, 2023 Jennifer Prince 160