Item 9A. Controls and Procedures
Item 9A. Controls and Procedures.
Evaluation of Disclosure Controls and Procedures
Under the supervision and with the participation of our management, including our Chief Executive Officer and Chief Financial Officer, we evaluated the effectiveness of the design and operation of our disclosure controls and procedures pursuant to Rule 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended (the “Exchange Act”) as of the end of the period covered by this report. Our disclosure controls and procedures are designed to ensure that information required to be disclosed in the reports we file or submit under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms, and that such information is accumulated and communicated to our management, including the Chief Executive Officer and the Chief Financial Officer, to allow timely decisions regarding required disclosures. Any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving the desired control objective and management necessarily applies its judgment in evaluating the cost-benefit relationship of possible controls and procedures. Based on that evaluation, our Chief Executive Officer and Chief Financial Officer have concluded that our disclosure controls and procedures were effective at a reasonable assurance level as of December 31, 2021.
Management’s Annual Report on Internal Control over Financial Reporting
Internal control over financial reporting refers to the process designed by, or under the supervision of, our Chief Executive Officer and Chief Financial Officer, and effected by our Board of Directors, management and other personnel, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with U.S. generally accepted accounting principles, and includes those policies and procedures that:
(1) Pertain to the maintenance of records that in reasonable detail accurately and fairly reflect the transactions and dispositions of the assets of the Company;
(2) Provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with U.S. generally accepted accounting principles, and that receipts and expenditures of the Company are being made only in accordance with authorizations of management and directors of the Company; and
(3) Provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of the Company’s assets that could have a material effect on the financial statements.
Internal control over financial reporting cannot provide absolute assurance of achieving financial reporting objectives because of its inherent limitations. Internal control over financial reporting is a process that involves human diligence and compliance and is subject to lapses in judgment and breakdowns resulting from human failures. Internal control over financial reporting also can be circumvented by collusion or improper management override. Because of such limitations, there is a risk that material misstatements may not be prevented or detected on a timely basis by internal control over financial reporting. However, these inherent limitations are known features of the financial reporting process. Therefore, it is possible to design into the process safeguards to reduce, though not eliminate, this risk. Management is responsible for establishing and maintaining adequate internal control over financial reporting for the Company.
Management has used the 2013 framework set forth in the report entitled “Internal Control-Integrated Framework” published by the Committee of Sponsoring Organizations of the Treadway Commission to evaluate the effectiveness of the Company’s internal control over financial reporting. Management has concluded that the Company’s internal control over financial reporting was effective as of December 31, 2021 at the reasonable assurance level. Our independent registered public accounting firm, Ernst & Young LLP, has issued an attestation report on the Company’s internal control over financial reporting as of December 31, 2021, which is included below.
Changes in Internal Control over Financial Reporting
There was not any change in our internal control over financial reporting (as such term is defined in Rules 13a-15(f) under the Exchange Act) during the three months ended December 31, 2021 that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.
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Report of Independent Registered Public Accounting Firm
To the Stockholders and the Board of Directors of 10x Genomics, Inc.
Opinion on Internal Control over Financial Reporting
We have audited 10x Genomics, Inc.’s internal control over financial reporting as of December 31, 2021, based on criteria established in Internal Control—Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (2013 framework) (the COSO criteria). In our opinion, 10x Genomics, Inc. (the Company) maintained, in all material respects, effective internal control over financial reporting as of December 31, 2021, based on the COSO criteria.
We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the consolidated balance sheets of the Company as of December 31, 2021 and 2020, the related consolidated statements of operations and comprehensive loss, convertible preferred stock and stockholders’ equity (deficit) and cash flows for each of the three years in the period ended December 31, 2021, and the related notes and our report dated February 18, 2022 expressed an unqualified opinion thereon.
Basis for Opinion
The Company's management is responsible for maintaining effective internal control over financial reporting and for its assessment of the effectiveness of internal control over financial reporting included in the accompanying Management’s Annual Report on Internal Control over Financial Reporting. Our responsibility is to express an opinion on the Company’s internal control over financial reporting based on our audit. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.
We conducted our audit in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether effective internal control over financial reporting was maintained in all material respects.
Our audit included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, testing and evaluating the design and operating effectiveness of internal control based on the assessed risk, and performing such other procedures as we considered necessary in the circumstances. We believe that our audit provides a reasonable basis for our opinion.
Definition and Limitations of Internal Control Over Financial Reporting
A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company’s internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements.
Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.
/s/ Ernst & Young LLP
San Jose, California
February 18, 2022
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Item 9B. Other Information.
On February 17, 2022, Brad Crutchfield and 10x Genomics, Inc. (the “Company”) entered into a Transition and Separation Agreement (the “Agreement”) pursuant to which Mr. Crutchfield will depart the Company after a transition period. Mr. Crutchfield has agreed to continue to serve as the Company’s Chief Commercial Officer until a replacement is appointed, after which Mr. Crutchfield will continue to provide transition services to the Company through December 31, 2022 unless Mr. Crutchfield’s employment is terminated prior to such time. Mr. Crutchfield’s departure is not due to any disagreement with the Company’s management team, operations, financial statements, policies or procedures.
Pursuant to the Agreement, while he is employed by the Company Mr. Crutchfield is entitled to payment of his current base salary and to continue to participate in the employee benefit plans generally available to the Company’s employees and Mr. Crutchfield’s outstanding equity awards will continue to vest. Mr. Crutchfield shall also be entitled to a bonus amount equal to twenty eight percent of his current base salary in lieu of an annual performance bonus for the full year 2022 contingent on the Company’s achievement of 2022 revenue goals and Mr. Crutchfield’s satisfactorily completion of transition services under the Agreement (the “Bonus”). If the Company terminates Mr. Crutchfield’s employment without cause prior to December 31, 2022, the Company shall continue to pay Mr. Crutchfield’s current base salary through December 31, 2022, the vesting of Mr. Crutchfield’s equity awards shall accelerate as if Mr. Crutchfield were employed through December 31, 2022, Mr. Crutchfield shall be eligible to earn the Bonus and the Company shall directly pay or reimburse Mr. Crutchfield for COBRA health insurance premiums up to December 31, 2022. Such payments and benefits are conditioned upon Mr. Crutchfield continuing to comply with certain obligations applicable to him and, upon execution and termination, delivery and non-revocation of a general release of claims.
The above description of the Agreement is not complete and is qualified in its entirety by reference to the text of the Agreement, which is attached hereto as Exhibit 10.29 and is incorporated herein by reference.
Item 9C. Disclosure Regarding Foreign Jurisdictions that Prevent Inspections.
Not applicable.
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PART III
Item 10. Directors, Executive Officers and Corporate Governance.
We have adopted a written code of business conduct and ethics that applies to our directors, officers and employees, including our principal executive officer, principal financial officer, principal accounting officer, controller, or persons performing similar functions. A current copy of the code is posted on the Governance section of our investor relations website, which is located at www.investors.10xgenomics.com. If we make any substantive amendments to, or grant any waivers from, the code of business conduct and ethics for our principal executive officer, principal financial officer, principal accounting officer, controller or persons performing similar functions, or any officer or director, we will disclose the nature of such amendment or waiver on our website or in a Current Report on Form 8-K.
The remaining information required under this item is incorporated herein by reference to our definitive proxy statement (the “Proxy Statement”) pursuant to Regulation 14A under the Securities Exchange Act of 1934, as amended, which Proxy Statement is expected to be filed with Securities and Exchange Commission not later than 120 days after the close of our fiscal year ended December 31, 2021.
Item 11. Executive Compensation.
The information required by this item will be set forth in the Proxy Statement and is incorporated herein by reference.
Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters.
The information required by this item will be set forth in the Proxy Statement and is incorporated herein by reference.
Item 13. Certain Relationships and Related Transactions, and Director Independence.
The information required by this item will be set forth in the Proxy Statement and is incorporated herein by reference.
Item 14. Principal Accounting Fees and Services.
The information required by this item will be set forth in the Proxy Statement and is incorporated herein by reference.
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PART IV
Item 15. Exhibits, Financial Statement Schedules.
(a) The following documents are filed as part of this Annual Report:
(1) Financial Statements
The financial statements filed as part of this Annual Report are included in Part II, Item 8 of this Annual Report.
(2) Financial Statement Schedules
Financial statement schedules have been omitted in this Annual Report because they are not applicable, not required under the instructions or the information requested is set forth in the financial statements or related notes thereto.
(3) List of Exhibits required by Item 601 of Regulation S-K
Incorporated by Reference
Exhibit
Number Exhibit Title Form File No. Exhibit Filing Date
3.1 Amended and Restated Certificate of Incorporation of the Registrant.
8‑K 001‑39035 3.1 9/16/2019
3.2 Amended and Restated Bylaws of the Registrant.
8‑K 001‑39035 3.1 3/26/2020
4.1 Form of Stock Certificate for Class A common stock of the Registrant.
S‑l 333‑233361 4.2 8/19/2019
4.2 Description of the Registrant’s Securities.
10.1 Agreement for Purchase and Sale, dated August 10, 2020, between the Registrant and Equity One (West Coast Portfolio) LLC.
10-Q 001-39035 10.7 8/12/2020
10.2 Amendment to Agreement for Purchase and Sale, dated October 15, 2020, between Registrant and Equity One (West Coast Portfolio) LLC.
10-Q 001-39035 10.3 11/12/2020
10.3 ReadCoor Merger Agreement.
10-K 333-39035 10.6 2/26/2021
10.4+ Amended and Restated 2012 Stock Plan and forms of award agreements thereunder.
S-1/A 333-233361 10.10 9/3/2019
10.5+ 2019 Omnibus Incentive Plan and forms of award agreements thereunder.
S-1/A 333-233361 10.11 9/3/2019
10.6+ 2019 Employee Stock Purchase Plan and forms of agreements.
10-Q 001-39035 10.4 11/12/2019
10.7+ Amended and Restated Non-Employee Director Compensation Policy.
8-K 001-39035 10.1 6/2/2021
10.8+ Form of At‑Will Employment, Confidential Information, Invention Assignment, and Arbitration Agreement.
S‑l 333‑233361 10.16 8/19/2019
10.9+ Form of Indemnification Agreement between the Registrant and each of its directors and executive officers.
S‑l/A 333‑233361 10.17 9/3/2019
10.10+ Employment Offer Letter by and between the Registrant and Eric S. Whitaker.
S‑l 333‑233361 10.14 8/19/2019
10.11+ Employment Offer Letter by and between the Registrant and Justin McAnear.
S‑l 333‑233361 10.15 8/19/2019
10.12+ Employment Offer Letter by and between the Registrant and Ruth De Backer.
10-K/A 001-39035 10.9 4/23/2021
10.13 Lease Agreement dated August 2, 2018, between the Registrant and 6200 Stoneridge Mall Road investors LLC.
S‑l 333‑233361 10.3 8/19/2019
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Incorporated by Reference
Exhibit
Number Exhibit Title Form File No. Exhibit Filing Date
10.14 First Amendment to Lease Agreement, dated May 20, 2019, between the Registrant and 6200 Stoneridge Mall Road Investors LLC.
S‑l 333‑233361 10.4 8/19/2019
10.15 Second Amendment to Lease Agreement, dated July 24, 2020, between the Registrant and 6200 Stoneridge Mall Road Investors LLC.
10‑Q 001‑39035 10.6 8/12/2020
10.16 Third Amendment to Lease Agreement, dated June 10, 2021, between the Registrant and 6200 Stoneridge Mall Road Investors LLC.
8-K 001-39035 10.1 6/15/2021
10.17 Lease Agreement, dated November 6, 2020, between the Registrant and 6200 Stoneridge Mall Road Investors LLC.
10-Q 001-39035 10.4 11/12/2020
10.18+ Form of Restricted Stock Unit Award under the 2019 Omnibus Incentive Plan.
10‑K 333‑39035 10.7 2/26/2021
10.19+ Form of Incentive Stock Option Award (US Participants) under the 2019 Omnibus Incentive Plan.
10‑K 333‑39035 10.8 2/26/2021
10.20+ Form of Nonqualified Stock Option Award (Board of Directors) under the 2019 Omnibus Incentive Plan.
10‑K 333‑39035 10.9 2/26/2021
10.21+ Form of Nonqualified Stock Option Award (US Participants) under the 2019 Omnibus Incentive Plan.
10‑K 333‑39035 10.10 2/26/2021
10.22+ Form of Nonqualified Stock Option Award (Non‑US Participants) under the 2019 Omnibus Incentive Plan.
10‑K 333‑39035 10.11 2/26/2021
10.23# License Agreement, dated September 26, 2013, between the Registrant and the President and Fellows of Harvard College.
S‑l 333‑233361 10.5 8/19/2019
10.24# Amendment No. 1 to License Agreement, dated October 25, 2018, between the Registrant and President and Fellows of Harvard College.
S‑l 333‑233361 10.6 8/19/2019
10.25# Exclusive (Equity) Agreement dated October 15, 2015, between Epinomics, Inc, and The Board of Trustees of the Leland Stanford Junior University.
S‑l 333‑233361 10.7 8/19/2019
10.26 Amendment No. 1 to the License Agreement, dated February 1, 2017, between Epinomics and The Board of Trustees of the Leland Stanford Junior University.
S‑l 333‑233361 10.8 8/19/2019
10.27# Amendment No. 2 to the License Agreement, dated July 27, 2018, between the Registrant and The Board of Trustees of the Leland Stanford Junior University.
S‑l 333‑233361 10.9 8/19/2019
10.28 Settlement and Patent Cross License Agreement, dated July 26, 2021, by and between the Registrant and Bio-Rad Laboratories, Inc.
8-K 001-39035 10.1 7/27/2021
10.29+ Transition and Separation Agreement between Bradford J. Crutchfield and 10x Genomics., Inc. dated February 17, 2022.
23.1 Consent of Independent Registered Public Accounting Firm .
24.1 Power of Attorney (included in the signature page to this Annual Report) .
31.1 Certification of Principal Executive Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 .
31.2 Certification of Principal Financial and Accounting Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 .
32.1* Certification of Principal Executive Officer Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 .
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Incorporated by Reference
Exhibit
Number Exhibit Title Form File No. Exhibit Filing Date
32.2* Certification of Principal Financial and Accounting Officer Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 .
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 Label Linkbase Document.
101.PRE XBRL Taxonomy Extension Presentation Linkbase Document.
104 Cover Page Interactive Data File - the Cover Page Interactive Data File does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document.
+ Management contract or compensatory plan or arrangement.
# Portions of this exhibit have been omitted pursuant to Item 601 of Regulation S-K promulgated under the Securities Act because the information (i) is not material and (ii) would be competitively harmful if publicly disclosed.
* This certification is deemed not filed for purposes of Section 18 of the Exchange Act, or otherwise subject to the liability of that section, nor shall it be deemed incorporated by reference into any filing under the Securities Act or the Exchange Act.
Item 16. Form 10-K Summary.
None.
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Signatures
Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
10x Genomics, Inc.
Date: February 18, 2022 By:
/s/ Serge Saxonov
Serge Saxonov
Chief Executive Officer and Director
(Principal Executive Officer)
KNOW ALL BY THESE PRESENTS, that each person whose signature appears below hereby constitutes and appoints Serge Saxonov and Justin J. McAnear, and each of them, his or her true and lawful agent, proxy and attorney-in-fact, 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 all that said attorneys-in-fact and agents, or any of them, or their or his substitutes, may lawfully do or cause to be done by virtue thereof.
Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.
Signature Title Date
/s/ Serge Saxonov Chief Executive Officer and Director February 18, 2022
Serge Saxonov (Principal Executive Officer)
/s/ Benjamin J. Hindson President and Director February 18, 2022
Benjamin J. Hindson
/s/ Justin J. McAnear Chief Financial Officer February 18, 2022
Justin J. McAnear (Principal Accounting and Financial Officer)
/s/ John R. Stuelpnagel Chairman of the board of directors February 18, 2022
John R. Stuelpnagel
/s/ Sridhar Kosaraju Director February 18, 2022
Sridhar Kosaraju
/s/ Mathai Mammen Director February 18, 2022
Mathai Mammen
/s/ Kim Popovits Director February 18, 2022
Kim Popovits
/s/ Bryan E. Roberts Director February 18, 2022
Bryan E. Roberts
/s/ Shehnaaz Suliman Director February 18, 2022
Shehnaaz Suliman
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