Item 9A. Controls and Procedures
Item 9A. Controls and Procedures
Evaluation of Disclosure Controls and Procedures
Pursuant to Rule 13a-15(b) of the Exchange Act, our management, including our Chief Executive Officer and our Chief Financial Officer (our principal executive officer and principal financial officer, respectively), has evaluated our disclosure controls and procedures as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act as of December 31, 2024.
Our management does not expect that our disclosure controls and procedures will prevent or detect all errors and all fraud. Disclosure controls and procedures, no matter how well designed, operated and managed, can provide only reasonable assurance that the objectives of the disclosure controls and procedures are met. Because of the inherent limitations of disclosure controls and procedures, no evaluation of such disclosure controls and procedures can provide absolute assurance that all control issues and instances of fraud, if any, have been detected.
Management Report on Internal Control Over Financial Reporting
Our management, including our Chief Executive Officer and Chief Financial Officer, is responsible for establishing and maintaining adequate internal control over financial reporting as defined in Rule 13a-15(f) of the Exchange Act. The Company’s internal control system is designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles in the United States of America. Due to its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Therefore, even those systems determined to be effective can provide only reasonable assurance with respect to financial statement preparation and presentation.
Management assessed the effectiveness of our internal control over financial reporting as of December 31, 2024, using the criteria set forth in Internal Control — Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (2013 framework) . Based on that assessment, our management concluded that our internal control over financial reporting was effective as of December 31, 2024 based on those criteria.
Changes in Internal Control over Financial Reporting
There were no changes to our internal control over financial reporting (as defined in Rules 13a-15(f) and 15d-15(f) of the Exchange Act) during the year ended December 31, 2024 other than items described below related to our remediation actions, that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.
Remediation of Prior Material Weakness in Internal Control Over Financial Reporting
As of December 31, 2023, our management identified and disclosed a material weakness in the design and operation of a management review control over prospective financial information used in the Company’s goodwill impairment assessment, and specifically, not sufficiently performing and documenting the reasonableness of significant assumptions used therein.
During 2024, our management was actively engaged in remediation efforts to address the material weakness noted above. The Company implemented the following improvements:
• The design, including the precision, of the management review control over the significant assumptions used to prepare the prospective financial information used in the Company’s goodwill impairment assessment was updated to ensure the sufficiency of the control procedures. Specifically, the procedures over the significant assumptions are appropriately detailed to allow management to assess the operating effectiveness of the control.
• Sufficient documentation was prepared, reviewed and retained over the Company’s annual goodwill impairment assessment performed as of October 1, 2024.
Based on the actions taken and the testing and evaluation of the effectiveness of our internal control over financial reporting, our management has concluded the material weakness identified in the prior year no longer existed as of December 31, 2024.
The independent registered public accounting firm of Ernst & Young LLP, as auditors of the Company’s consolidated financial statements, has issued an attestation report on the effectiveness of the Company’s internal control over financial reporting, included herein.
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Item 9B. Other Information
None of our directors or executive officers adopted or terminated a “Rule 10b5-1 trading arrangement” or adopted or terminated a “non-Rule 10b5-1 trading arrangement” (as such terms are defined in Item 408 of Regulation S-K) during the quarter ended December 30, 2024.
Item 9C. Disclosure Regarding Foreign Jurisdictions that Prevent Inspections
Not applicable.
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Report of Independent Registered Public Accounting Firm
To the Shareholders and the Board of Directors of Upland Software, Inc.
Opinion on Internal Control Over Financial Reporting
We have audited Upland Software, Inc.’s internal control over financial reporting as of December 31, 2024, 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, Upland Software, Inc. (the Company) maintained, in all material respects, effective internal control over financial reporting as of December 31, 2024, 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, 2024 and 2023, the related consolidated statements of operations, comprehensive loss, equity and cash flows for each of the three years in the period ended December 31, 2024, and the related notes and our report dated March 12, 2025 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 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
Austin, Texas
March 12, 2025
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PART III
Item 10. Directors, Officers and Corporate Governance
We have adopted a code of ethics that applies to the Company’s directors, officers and employees, including the Chief Executive Officer and the Chief Financial Officer and any other persons performing similar functions. The text of our code of ethics, “Code of Business Conduct and Ethics,” has been posted on our website at https://investor.uplandsoftware.com/governance/governance-documents/default.aspx. We will provide a copy of the code of ethics without charge upon request to Corporate Secretary, Upland Software, Inc., 401 Congress Ave., Suite 1850, Austin, Texas 78701.
Additional information required by this item is incorporated by reference from our 2025 Proxy Statement to be filed with the SEC in connection with the solicitation of proxies for the Company’s 2024 Annual Meeting of Stockholders (“2025 Proxy Statement), under the headings “Proposal One: Election of Directors,” “Section 16(a) Beneficial Ownership Reporting Compliance,” “Directors and Corporate Governance” and “Executive Officers.” The 2025 Proxy Statement will be filed with the SEC within 120 days after the end of the calendar year to which this report relates.
Item 11. Executive Compensation
The information required by this item is incorporated by reference from our 2025 Proxy Statement, under the headings “Executive Compensation” and “Directors and Corporate Governance-Compensation Committee Interlocks and Insider Participation.” The 2025 Proxy Statement will be filed with the SEC within 120 days after the end of the calendar year to which this report relates.
Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters
The information required by this item is incorporated by reference from our 2025 Proxy Statement under the headings “Equity Compensation Plan Information” and “Security Ownership of Certain Beneficial Owners and Management.” The 2025 Proxy Statement will be filed with the SEC within 120 days after the end of the calendar year to which this report relates.
Item 13. Certain Relationships, and Related Transactions, and Director Independence
The information required by this item is incorporated by reference from our 2025 Proxy Statement under the headings “Certain Relationships and Related Party Transactions” and “Directors and Corporate Governance-Director Independence.” The 2025 Proxy Statement will be filed with the SEC within 120 days after the end of the calendar year to which this report relates.
Item 14. Principal Accounting Fees and Services
The information required by this item is incorporated by reference from our 2025 Proxy Statement under the heading “Proposal Two: Ratification of Selection of Independent Registered Public Accounting Firm.” The 2025 Proxy Statement will be filed with the SEC within 120 days after the end of the calendar year to which this report relates.
PART IV
Item 15. Exhibits and Financial Statement Schedules
(a) Financial Statements
The financial statements filed as part of this Annual Report on Form 10-K are listed on the “Index to Consolidated Financial Statements” included in “Item 8. Financial Statements and Supplementary Data” h erein.
(b) Financial Statement Schedules
All schedules have been omitted because they are not required or because the required information is otherwise included in the consolidated financial statements or notes thereto set forth under Item 8 above.
(c) Exhibits
See Exhibit Index at the end of this Annual Report on Form 10-K, which is incorporated by reference.
Item 16. Form 10-K Summary
Not applicable.
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EXHIBIT INDEX
Incorporated by Reference
Exhibit
No. Description of Exhibit
Form
File No.
Exhibit
Filing Date
3.1
Amended and Restated Certificate of Incorporation, as currently in effect
10-K 001-36720 3.1 March 30, 2016
3.2
Amended and Restated Bylaws of Upland Software, Inc., effective February 3, 2020
8-K 001-36720 3.1 February 4, 2020
3.3
Certificate of Designation of Preferences, Rights and Limitations of Series A Convertible Preferred Stock
8-K 001-36720 3.1 August 23, 2022
3.4
Certificate of Designations of Series B Junior Participating Preferred Stock of Upland Software, Inc., filed with the Secretary of State of the State of Delaware on May 2, 2023.
8-K 001-36720 3.1 May 3, 2023
3.5
Certificate of Amendment to the Amended and Restated Certificate of Incorporation of Upland Software, Inc.
8-K 001-36720 3.1 June 8, 2023
3.6
Amendment to the Second Amended and Restated Bylaws of Upland Software, Inc.
8-K 001-36720 3.1 March 3, 2025
4.1
Description of Capital Stock
10-K 001-36720 4.1 February 22, 2024
4.2
Tax Benefit Preservation Plan, dated as of May 2, 2023, by and between Upland Software, Inc. and Broadridge Corporate Issuer Solutions, LLC, as rights agent.
8-K 001-36720 4.1 May 3, 2023
4.3
Tax Benefit Preservation Plan, dated as of June 5, 2024, by and between Upland Software, Inc. and Broadridge Corporate Issuer Solutions, LLC, as rights agent.
8-K 001-36720 4.1 June 5, 2024
10.1+
Form of Indemnification Agreement for directors and officers
S-1 333-198574 10.2 October 27, 2014
10.2+
Amended and Restated 2010 Stock Plan, as amended September 2, 2014
S-1 333-198574 10.3.1 September 4, 2014
10.3+
Form of Stock Option Agreement under Amended and Restated 2010 Stock Plan (Standard)
S-1 333-198574 10.4 September 4, 2014
10.3.1+
Form of Stock Option Agreement under Amended and Restated 2010 Stock Plan (Former ComSci, LLC Employees)
S-1 333-198574 10.4.1 September 4, 2014
10.3.2+
Form of Stock Option Agreement under Amended and Restated 2010 Stock Plan (Executive)
S-1 333-198574 10.4.2 September 4, 2014
10.3.3+
Form of Amendment to Stock Option Agreement under Amended and Restated 2010 Stock Plan with Certain Executives
S-1 333-198574 10.4.3 September 4, 2014
10.4+
Form of Restricted Stock Purchase Agreement under Amended and Restated 2010 Stock Plan
S-1 333-198574 10.5 September 4, 2014
10.4.1+
Form of Amendment to Restricted Stock Purchase Agreement under Amended and Restated 2010 Stock Plan
S-1 333-198574 10.5.1 September 4, 2014
10.5+
2014 Equity Incentive Plan
S-1 333-198574 10.6 October 27, 2014
10.6+
Form of Stock Option Award Agreement under 2014 Equity Incentive Plan
S-1 333-198574 10.7 October 27, 2014
10.6.1+
Form of Stock Option Award Agreement under 2014 Equity Incentive Plan (Executive)
S-1 333-198574 10.7.1 October 27, 2014
10.7+
Form of Restricted Stock Purchase Agreement under 2014 Equity Incentive Plan
S-1 333-198574 10.8 October 27, 2014
10.7.1+
Form of Restricted Stock Purchase Agreement under 2014 Equity Incentive Plan (Executive)
S-1 333-198574 10.8.1 October 27, 2014
10.8+
Form of Restricted Stock Unit Award Agreement under 2014 Equity Incentive Plan
S-1 333-198574 10.9 October 27, 2014
10.8.1+
Form of Restricted Stock Unit Award Agreement under 2014 Equity Incentive Plan (Executive)
S-1 333-198574 10.9.1 October 27, 2014
10.9+
Upland Software, Inc. 2024 Omnibus Incentive Plan
8-K 001-36720 10.1 June 5, 2024
10.11.2
Second Amendment to Office Lease between Registrant and CSHV-401 Congress LLC
10-K 001-36720 10.11.2 March 15, 2019
10.20+
Employment Agreement between the Registrant and Michael D. Hill, dated March 28, 2017
10-K 001-36720 10.21 March 30, 2017
10.2 1 +
Employment Agreement between the Registrant and John T. McDonald, dated March 28, 2017
10-K 001-36720 10.23 March 30, 2017
90
Incorporated by Reference
10.22+
Amendment #1 to Employment Agreement between the Registrant and Michael D. Hill, dated March 28, 2017
10-K 001-36720 10.23 March 15, 2019
10.23+
Amendment #1 to Employment Agreement between the Registrant and John T. McDonald, dated March 28, 2017
10-K 001-36720 10.25 March 15, 2019
10.24
Credit Agreement by and among, inter alios, Upland Software, Inc., Credit Suisse AG, Cayman Islands Branch and the lenders party thereto Credit Agreement by and among, inter alios, Upland Software, Inc., Credit Suisse AG, Cayman Islands Branch and the lenders party thereto dated as of August 6, 2019 as of August 6, 2019
8-K 001-36720 10.1 August 7, 2019
10.25
First Incremental Assumption Agreement by and among, inter alios, Upland Software, Inc. and Credit Suisse AG, Cayman Islands Branch, as Agent and 2019 Incremental Lender, dated as of November 26, 2019
8-K 001-36720 10.1 November 26, 2019
10.27+
Amendment #2 to Employment Agreement between the Registrant and Michael D. Hill, dated March 28, 2017
10-K 001-36720 10.29 February 25, 2021
10.28+
Amendment #2 to Employment Agreement between the Registrant and John T. McDonald, dated March 28, 2017
10-K 001-36720 10.31 February 25, 2021
10.29
Amendment No. 1 to Credit Agreement, dated as of February 21, 2023, by and between Upland Software, Inc. and Credit Suisse AG, Cayman Islands Branch, as administrative agent and collateral agent
8-K 001-36720 10.1 February 23, 2023
10.32+
Amendment #3 to Employment Agreement between the Registrant and John T. McDonald, dated January 30, 2024
10.33+
Employment Agreement between the Registrant and Karen Cummings, dated December 16, 2022
10.34+
Amendment #1 to Employment Agreement between the Registrant and Karen Cummings, dated January 30, 2024
10.35
Securities Purchase Agreement, by and between Upland Software, Inc. and Ulysses Aggregator, LP, dated as of July 14, 2022
8-K 001-36720 10.1 July 14, 2022
10.36
Registration Rights Agreement, by and between Upland Software, Inc. and Ulysses Aggregator, LP, dated as of August 23, 2022
8-K 001-36720 10.1 August 23, 2022
10.37+
Executive Employment Agreement between Registrant and Oliver Yates, dated January 9, 2023
10.38+
Executive Employment Agreement between Registrant and Matt Breslin, dated February 6, 2024
19*
Insider Trading Policy
21.1*
List of subsidiaries of Upland Software, Inc.
23.1*
Consent of Ernst & Young LLP, Independent Registered Public Accounting Firm
24.1*
Power of Attorney (included on signature pages hereto)
31.1*
Certification of the Principal Executive Officer Required Under Rules 13a-14(a) and 15d-14(a) of the Securities Act of 1934, as amended, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
31.2*
Certification of the Principal Financial Officer Required Under Rules 13a-14(a) and 15d-14(a) of the Securities Act of 1934, as amended, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
32.1*
Certification of Principal Executive Officer Required Under Rules 13a-14(a) and 15d-14(a) of the Securities Exchange Act of 1934, as amended, and 18 U.S.C. Section 1350 as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
32.2*
Certification of Principal Financial Officer Required Under Rules 13a-14(a) and 15d-14(a) of the Securities Exchange Act of 1934, as amended, and 18 U.S.C. Section 1350 as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
97.1
Policy relating to recovery of erroneously awarded compensation, as required by applicable listing standards adopted pursuant to 17 CFR 240.10D-1
10-K 001-36720 97.1 2/22/2024
91
Incorporated by Reference
101* Inline XBRL Document Set for the consolidated financial statements and accompanying notes in Part II, Item 8, “Financial Statements and Supplementary Data” of this Annual Report on Form 10-K.
104* Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101)
+ Indicates management contract, compensatory plan or arrangement.
* Filed herewith.
(1) The material contained in Exhibit 32.1 and Exhibit 32.2 is not deemed “filed” with the SEC and is not to be incorporated by reference into any filing of the Company under the Securities Act of 1933 or the Securities Exchange Act of 1934, whether made before or after the date hereof and irrespective of any general incorporation language contained in such filing, except to the extent that the Company specifically incorporates it by reference.
92
SIGNATURES
Pursuant to the requirement of Sections 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.
Date: March 12, 2025
Upland Software, Inc.
By: /s/ John T. McDonald
John T. McDonald
Chief Executive Officer and Chairman
POWER OF ATTORNEY
KNOW ALL PERSONS BY THESE PRESENTS, that each person whose signature appears below hereby constitutes and appoints John T. McDonald and Michael D. Hill and each of them, as his true and lawful attorney-in-fact and agent with full power of substitution, for him 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 attorney-in-fact and agent the 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 for all intents and purposes as he might or could do in person, hereby ratifying and confirming all that said attorney-in-fact and agent, or his substitute, 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/ John T. McDonald
Chief Executive Officer and Chairman
March 12, 2025
John T. McDonald
( Principal Executive Officer )
/s/ Michael D. Hill
Chief Financial Officer and Treasurer
March 12, 2025
Michael D. Hill
( Principal Financial Officer and Principal Accounting Officer )
/s/Timothy Mattox
Director
March 12, 2025
Timothy Mattox
/s/ David D. May
Director
March 12, 2025
David D. May
/s/ Stephen E. Courter
Director
March 12, 2025
Stephen E. Courter
/s/ Teresa M. Walsh
Director
March 12, 2025
Teresa M. Walsh
/s/ David H.S. Chung
Director
March 12, 2025
David H.S. Chung
93