What changed in this filing

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Item 9A. Controls and Procedures

2023-02-27 compared with 2022-02-22 · 49 added, 34 removed, 178 unchanged (32% of the section changed)

1 unchanged sentence

(a) Evaluation of Disclosure Controls and Procedures

Under the supervision and with the participation of our management, including our principal executive officer and principal financial officer, we conducted an evaluation of the effectiveness of the design and operation of our disclosure controls and procedures, as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended ("Exchange Act"), as of the end of the period covered by this report.

In designing and evaluating our disclosure controls and procedures, management recognizes that any disclosure controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving the desired control objectives.

In addition, the design of disclosure controls and procedures must reflect the fact that there are resource constraints and that management is required to apply its judgment in evaluating the benefits of possible controls and procedures relative to their costs.

Based on management’s evaluation, our principal executive officer and principal financial officer concluded that our disclosure controls and procedures are designed to, and are effective to, provide assurance at a reasonable level that the information we are required to disclose in reports that we file or submit under the Exchange Act is recorded, processed, summarized, and reported within the time periods specified in SEC rules and forms, and that such information is accumulated and communicated to our management, including our principal executive officer and principal financial officer, as appropriate, to allow timely decisions regarding required disclosures.

Our management, with the participation of our principal executive officer and principal financial officer, evaluated the effectiveness of our disclosure controls and procedures, as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended ("Exchange Act"), as of December 31, 2022.

Based on our evaluation, our principal executive officer and principal financial officer concluded that, as of December 31, 2022, our disclosure controls and procedures are designed at a reasonable level and are effective to provide reasonable assurance that the information we are required to disclose in reports that we file or submit under the Exchange Act is recorded, processed, summarized, and reported within the time periods specified in SEC rules and forms, and that such information is accumulated and communicated to our management, including our principal executive officer and principal financial officer, as appropriate, to allow timely decisions regarding required disclosures.

(b) Management’s Report on Internal Control Over Financial Reporting

Under the supervision and with the participation of our management, including our principle executive officer and principle financial officer, as defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act.

We conducted an evaluation of the effectiveness of our internal control over financial reporting based on the framework in Internal Control—Integrated Framework (2013) set forth by the Committee of Sponsoring Organizations of the Treadway Commission.

Our 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 Exchange Act.

Our management assessed the effectiveness of our internal control over financial reporting as of December 31, 2022, based on the framework set forth by the Committee of Sponsoring Organizations of the Treadway Commission in Internal Control—Integrated Framework (2013).

Unity Software Inc.

Based on this evaluation, management concluded that our internal control over financial reporting was effective as of December 31, 2021.

Management reviewed the results of its assessment with our Audit Committee.

In November 2022, we completed the acquisition of ironSource.

In accordance with the guidance issued by the SEC, companies are permitted to exclude acquisitions from their final assessment of internal control over financial reporting during the year of acquisition.

As of and for the fiscal year ended December 31, 2022, ironSource’s business constituted approximately 7% of our consolidated assets and 9% of our consolidated revenues.

As part of our ongoing integration activities, we are in the process of incorporating internal controls over significant processes specific to ironSource that management believes are appropriate and necessary to consolidate and report the company's financial results.

We expect to complete the integration activities related to internal control over financial reporting for ironSource during fiscal year 2023 and as a result, have not included ironSource within our assessment of the effectiveness of our internal control over financial reporting as of December 31, 2022.

The effectiveness of our internal control over financial reporting as of December 31, 2022 has been audited by Ernst & Young LLP, an independent registered public accounting firm, as stated in its report, which appears in this Item under the heading "Report of Independent Registered Public Accounting Firm."

Under the supervision and with the participation of our management, including our principal executive officer and principal financial officer, we conducted an evaluation of any changes in our internal control over financial reporting (as such term is defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act) that occurred during our most recently completed fiscal quarter.

Based on that evaluation, our principal executive officer and principal financial officer concluded that there has not been any material change in our internal control over financial reporting during the quarter covered by this report that materially affected, or is reasonably likely to materially affect, our internal control over financial reporting, despite the fact that the majority of our employees are continuing to work remotely due to the COVID-19 pandemic.

We are continually monitoring and assessing the COVID-19 situation on our internal controls to understand the potential impact on their design and operating effectiveness.

Except as described above with respect to ironSource, there were no changes in our internal control over financial reporting identified in connection with the evaluation required as defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act) that occurred during the quarter ended December 31, 2022 that have materially affected, or is reasonably likely to materially affect, our internal control over financial reporting, despite the fact that the majority of our employees are continuing to work remotely due to the COVID-19 pandemic.

(d) Limitations on Effectiveness of Controls and Procedures and Internal Control Over Financial Reporting

Our management, including our principal executive officer and principal financial officer, does not expect that our disclosure controls and procedures or our internal control over financial reporting will prevent all errors and all fraud.

A control system, no matter how well designed and operated, can provide only reasonable, not absolute, assurance that the objectives of the control system are met.

Further, the design of a control system must reflect the fact that there are resource constraints and the benefits of controls must be considered relative to their costs.

Because of the inherent limitations in all control systems, no evaluation of controls can provide absolute assurance that all control issues and instances of fraud, if any, have been detected.

These inherent limitations include the realities that judgments in decision-making can be faulty and that breakdowns can occur because of a simple error or mistake.

Additionally, controls can be circumvented by the individual acts of some persons, by collusion of two or more people, or by management override of the controls.

The design of any system of controls is also based in part upon certain assumptions about the likelihood of future events, and there can be no assurance that any design will succeed in achieving its stated goals under all potential future conditions;

over time, controls may become inadequate because of changes in conditions or the degree of compliance with policies or procedures may deteriorate.

Due to inherent limitations in a cost-effective control system, misstatements due to error or fraud may occur and may not be detected.

In designing and evaluating the disclosure controls and procedures and internal control over financial reporting, our management, including our principal executive officer and principal financial officer, recognizes that any control and procedures, no matter how well designed and operated, can provide only reasonable, not absolute, assurance of achieving the desired control objectives.

Further, the design of disclosure controls and procedures and internal control over financial reporting must reflect the fact that there are resource constraints and the benefits of controls must be considered relative to their costs.

Unity Software Inc.

5 unchanged sentences

(the Company) maintained, in all material respects, effective internal control over financial reporting as of December 31, 2022, 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 2021 consolidated financial statements of the Company and our report dated February 22, 2022 expressed an unqualified opinion thereon.

As indicated in the accompanying Management’s Report on Internal Control Over Financial Reporting, management’s assessment of and conclusion on the effectiveness of internal control over financial reporting did not include the internal controls of ironSource Ltd., which is included in the 2022 consolidated financial statements of the Company and constituted 7% of total assets as of December 31, 2022 and 9% of revenue for the year then ended.

Our audit of internal control over financial reporting of the Company also did not include an evaluation of the internal control over financial reporting of ironSource Ltd.

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, 2022 and 2021, the related consolidated statements of operations, comprehensive loss, stockholders' equity and cash flows for each of the three years in the period ended December 31, 2022, and the related notes and our report dated February 27, 2023 expressed an unqualified opinion thereon.

Basis for Opinion

2 unchanged sentences

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 U.S.

Securities and Exchange Commission and the PCAOB.

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.

7 unchanged sentences

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.

Unity Software Inc.

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements.

32 unchanged sentences

Exhibit Number Description of Exhibit Form File Number Exhibit Filing Date

2.1 Asset Purchase Agreement, dated November 7, 2021, by and among Unity Software Inc., Weta Digital Limited, Film Property Trust, Weta holdings LLC, Joseph Letteri, and Weta Principal Fund LLC

8-K 001-39497 10.1 November 9, 2021

2.1 Agreement and Plan of Merger, dated as of July 13, 2022, by and among Unity, Merger Sub and ironSource.

8-K 001-39497 2.1 July 15, 2022

3.1 Amended and Restated Certificate of Incorporation of the Registrant

13 unchanged sentences

8-K 011-39497 4.2 November 19, 2021

4.6 Indenture, dated as of November 8, 2022, between Unity and U.S.

Bank Trust Company, National Association, as trustee

8-K 011-39497 4.1 November 8, 2022

4.7 Form of 2.0% Convertible Senior Note due 2027 (included in Exhibit 4.6)

8-K 011-39497 4.1 November 8, 2022

10.1† Unity Software Inc.

41 unchanged sentences

8-K 001-39497 10.1 March 17, 2021

10.17 Separation Agreement, dated March 24, 2021, by and between the Unity Technologies SF and Kimberly Jabal

8-K 001-39497 10.1 March 30, 2021

10.17*† Offer Letter, dated February 22, 2022, by and between Unity Technologies SF and Carol Carpenter

10.18*† Offer Letter, dated November 23, 2022, by and between Unity Technologies SF and Anirma Gupta

10.19 Registration Rights Agreement, dated as of November 7, 2022, by and among Unity and the holders listed thereto

8-K 001-39497 10.1 November 7, 2022

10.20 Investment Agreement, dated as of July 13, 2022, by and between Unity, Silver Lake Alpine II, L.P., Silver Lake Partners VI, L.P.

and Sequoia Capital Fund, L.P.

8-K 001-39497 10.3 July 15, 2022

10.21*† Unity Software Inc.

IronSource Share Incentive Plan and related form agreements

21.1* Subsidiaries of the Registrant

10 unchanged sentences

101.PRE* Inline XBRL Taxonomy Extension Presentation Linkbase Document

104 Cover Page Interactive Data File (formatted as inline XBRL and contained in Exhibit 101)

* Filed herewith.

† Indicates management contract or compensatory plan.

Unity Software Inc.

1 unchanged sentence

Exhibit Number Description of Exhibit Form File Number Exhibit Filing Date

104 Cover Page Interactive Data File (formatted as inline XBRL and contained in Exhibit 101)

* Filed herewith.

† Indicates management contract or compensatory plan.

# The certifications attached as Exhibit 32.1 accompany this Annual Report on Form 10-K pursuant to 18 U.S.C.

11 unchanged sentences

Senior Vice President and Chief Financial Officer

(Principal Financial and Accounting Officer)

(Principal Financial Officer)

Unity Software Inc.

10 unchanged sentences

February 27, 2023

Luis Visoso (Principal Financial and Accounting Officer)

Luis Visoso (Principal Financial Officer)

/s/ Mark Barrysmith

Chief Accounting Officer February 27, 2023

Mark Barrysmith

(Principal Accounting Officer)

/s/ Tomer Bar-Zeev Director February 27, 2023

Tomer Bar-Zeev

/s/ Roelof Botha

3 unchanged sentences

Mary Schmidt Campbell, Ph.D.

/s/ Shlomo Dovrat Director February 27, 2023

Shlomo Dovrat

/s/ Egon Durban

3 unchanged sentences

David Helgason

/s/ Alyssa Henry

Director February 22, 2022

/s/ David Kostman Director February 27, 2023

David Kostman

/s/ Michelle Lee Director February 27, 2023

/s/ Barry Schuler

8 unchanged sentences

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

What changed 10-K

Item 9A. Controls and Procedures