Yext, Inc. 10-K

Item 9A. Controls and Procedures 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 (the "Exchange Act"). Disclosure controls and procedures are controls and other procedures that are designed to ensure that information required to be disclosed in our reports filed or submitted under the Exchange Act is recorded, processed, summarized and reported, within the time periods specified in the Securities and Exchange Commission’s rules and forms. Disclosure controls and procedures include controls and procedures designed to ensure that information required to be disclosed in our company’s reports filed under the Exchange Act is accumulated and communicated to management, including our Chief Executive Officer and Chief Financial Officer, to allow timely decisions regarding required disclosure. Based on the evaluation of our disclosure controls and procedures, our Chief Executive Officer and Chief Financial Officer concluded that our disclosure controls and procedures were effective as of January 31, 2023. Management's Report on Internal Control over Financial Reporting Our management is responsible for establishing and maintaining adequate internal control over financial reporting, as such term is defined in Exchange Act Rules 13a-15(f) and 15d-15(f). 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 our internal control over financial reporting as of January 31, 2023 based on the guidelines established in the Internal Control—Integrated Framework (2013 framework) issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Internal control over financial reporting includes policies and procedures that provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external reporting purposes in accordance with U.S. generally accepted accounting principles. Based on the results of our evaluation, we concluded that as of January 31, 2023 we have maintained effective internal control over financial reporting. The effectiveness of our internal control over financial reporting has been audited by Ernst & Young LLP, an independent registered public accounting firm, and as part of the audit, has issued an unqualified opinion on the effectiveness of our internal control over financial reporting as of January 31, 2023, which is included in Item 8 of this Annual Report on Form 10-K. Changes in Internal Control over Financial Reporting In connection with the audit of the fiscal year 2021 consolidated financial statements, we and our independent registered public accounting firm identified a material weakness related to our processes to calculate, record and account for sales commissions. In fiscal year 2022, we remediated the identified deficiencies in internal control over financial reporting identified above as described below: • Improved governance of our incentive compensation plans • Implemented new information technology systems to calculate, record and account for sales commissions • Implemented IT general controls, including logical security and application change management controls for these new information technology systems • Implemented new automated controls to calculate, record and account for sales commissions • Implemented new manual controls and strengthened existing controls across the process to calculate, record and account for sales commissions, including management review controls to detect errors in calculated sales commissions We have tested and evaluated the implementation of these new and revised processes and internal controls to ascertain whether they are designed and operating effectively to provide reasonable assurance that they will prevent or detect a material error in our financial statements and have concluded that our internal control over financial reporting was effective as of January 31, 2022 and January 31, 2023. Except as noted above, there were no changes in our internal control over financial reporting identified in connection with the evaluation required by Rules 13a-15(d) and 15d-15(d) of the Exchange Act that occurred during the three months ended January 31, 2023 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting. Limitations on the Effectiveness of Disclosure Controls and Procedures Our management, including our Chief Executive Officer and Chief Financial Officer, does not expect that our disclosure controls and procedures or internal control over financial reporting will prevent all errors and all fraud. A control system, no matter how well designed and implemented, can provide only reasonable, not absolute, assurance that the control system’s objectives will be met. 81 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 within a company are detected. The inherent limitations include the realities that judgments in decision-making can be faulty and that breakdowns can occur because of simple errors or mistakes. Controls can also be circumvented by the individual acts of some persons, by collusion of two or more people, or by management override of the controls. Because of the inherent limitations in a cost-effective control system, misstatements due to error or fraud may occur and may not be detected. 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. Item 9B. Other Information None. 82 PART III Item 10. Directors, Executive Officers and Corporate Governance Information about our directors and persons nominated to become directors can be found under the caption “Directors and Corporate Governance – Board Composition” in our Proxy Statement for the 2023 Annual Meeting of Stockholders to be filed with the SEC within 120 days of the fiscal year ended January 31, 2023 ("Proxy Statement") and is incorporated herein by reference. Information about our named executive officers is reported under the caption “Executive Officers ” in our Proxy Statement and is incorporated herein by reference. Our Board of Directors has adopted a Code of Business Conduct and Ethics, which establishes the standards of ethical conduct applicable to all directors, officers and employees of our Company, including our Chief Executive Officer, Chief Financial Officer and Chief Accounting Officer. The code addresses, among other things, conflicts of interest, compliance with disclosure controls and procedures and internal controls over financial reporting, corporate opportunities and confidentiality requirements. Our Code of Business Conduct and Ethics is available on the Investor Relations section of our website at investors.yext.com. We intend to disclose any amendments to the code, or any waivers of its requirements, on our website to the extent required by SEC applicable rules and regulations. The inclusion of our website address in this annual report does not include or incorporate by reference into this annual report the information on or accessible through our website. Information about the procedures by which security holders may recommend nominees to our Board of Directors can be found in our Proxy Statement under the caption “Directors and Corporate Governance – Identifying and Evaluating Director Nominees” and is incorporated herein by reference. Information concerning the composition of the audit committee and our audit committee financial expert is contained in our Proxy Statement under the caption “Directors and Corporate Governance – Board Committees and Meetings – Audit Committee” and is incorporated herein by reference. Item 11. Executive Compensation Information about the compensation of our directors and named executive officers, compensation committee interlocks and the compensation committee report can be found in our Proxy Statement under the caption “Directors and Corporate Governance – Compensation of Non-Employee Directors,” “– Compensation Committee Interlocks,” “– Compensation Risk Assessment” and “Executive Compensation” and is incorporated herein by reference. Information about the Compensation Committee Report can be found in our Proxy Statement under the caption "Compensation Committee Report" and is incorporated herein by reference. Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters Information with respect to securities authorized for issuance under equity compensation plans can be found under “Item 5. Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities – Securities Authorized for Issuance under Equity Compensation Plans” and is incorporated herein by reference. Information about the security ownership of certain beneficial owners and of directors and named executive officers, can be found in our Proxy Statement under the caption “Beneficial Ownership of Shares of Common Stock” and is incorporated herein by reference. Item 13. Certain Relationships and Related Transactions, and Director Independence Information with respect to certain relationships and related person transactions and director independence can be found in our Proxy Statement under “Certain Relationships and Related Person Transactions” and “Directors and Corporate Governance – Director Independence” and is incorporated herein by reference. Item 14. Principal Accountant Fees and Services Information with respect to the audit committee's pre-approval policies and procedures for audit and other services and information on our principal accountant fees and services can be found in our Proxy Statement under “Item 2 — Ratification of Independent Registered Public Accounting Firm — Audit and Non-Audit Fees” and “— Policy on Audit Committee Pre-Approval of Audit and Permissible Non-Audit Services of Independent Registered Public Accounting Firm” and is incorporated herein by reference. 83 PART IV Item 15. Exhibits and Financial Statement Schedules (a) The following documents are filed as a part of this Annual Report on Form 10-K: 1. Financial Statements : The information concerning our financial statements, and Report of Independent Registered Public Accounting Firm required by this Item is incorporated by reference herein to the section of this Annual Report on Form 10-K in Item 8, entitled “Consolidated Financial Statements and Supplementary Data.” 2. Financial Statement Schedules : The Financial Statement Schedules have been omitted because they are not applicable or are not required or the information required to be set forth herein is included in the Consolidated Financial Statements or Notes thereto. 3. Exhibits : The documents listed in the accompanying exhibit index are filed or incorporated by reference as part of this Annual Report on Form 10-K. Exhibit Index Incorporated by Reference Number Exhibit Title Form File No. Exhibit Filing Date Filed Herewith 3. 1 Amended and Restated Certificate of Incorporation S-1/A 333-216642 3.2 3/17/2017 3.2 Amended and Restated Bylaws S-1/A 333-216642 3.4 3/17/2017 4.1 Form of Common Stock Certificate S-1/A 333-216642 4.1 3/28/2017 4.2 Fifth Amended and Restated Investors' Rights Agreement, dated May 28, 2014, as subsequently amended, by and among the Registrant and certain security holders of the Registrant. S-1 333-216642 4.2 3/13/2017 4.3 Description of Registrant's Securities registered pursuant to Section 12 of the Securities Exchange Act of 1934 x 10.1 # Form of Indemnification Agreement entered into between the Registrant and its directors and executive officers. S-1/A 333-216642 10.1 3/17/2017 10.2 # 2016 Equity Incentive Plan. S-1 333-216642 10.2 3/13/2017 10.3 # Form of Stock Option Grant Notice and Stock Option Agreement under 2016 Equity Incentive Plan. S-1/A 333-216642 10.3 3/17/2017 10.4 # Form of Restricted Stock Unit Agreement under 2016 Equity Incentive Plan. S-1/A 333-216642 10.4 3/17/2017 10.5 # Form of Restricted Stock Agreement under 2016 Equity Incentive Plan. S-1/A 333-216642 10.5 3/17/2017 10.6 # 2017 Employee Stock Purchase Plan. S-1/A 333-216642 10.6 3/17/2017 10.7 # 2008 Equity Incentive Plan. S-1 333-216642 10.7 3/13/2017 10.8 # Form of Stock Option Grant Notice and Stock Option Agreement under 2008 Equity Incentive Plan. S-1 333-216642 10.8 3/13/2017 10.9 # Form of Restricted Stock Unit Agreement under 2008 Equity Incentive Plan. S-1 333-216642 10.9 3/13/2017 10.10 # Employee Incentive Plan. S-1 333-216642 10.10 3/13/2017 10.1 1# Outside Director Compensation Policy. S-1/A 333-216642 10.13 3/17/2017 10.1 2# Change of Control and Severance Policy. S-1 333-216642 10.14 3/13/2017 10.1 3# Form of Employment Agreement with the executive officers of the Company . S-1/A 333-216642 10.15 3/17/2017 10.14 # Advisor Agreement between the Company and James Steele, dated as of September 30, 2020 8-K 001-38056 10.1 9/3/2020 10.1 5 Agreement of Lease, dated May 24, 2012, by and between the Registrant and 1 Madison Office Fee LLC. S-1 333-216642 10.11 3/13/2017 84 10.1 6 Lease dated May 15, 2014 by and between the Registrant and Credit Suisse (USA) Inc. S-1 333-216642 10.12 3/13/2017 10.17 Surrender Agreement, dated as of the May 29, 2020 between 1 Madison Office Fee LLC, as landlord under the original lease and as sublandlord under the sublease and Yext, Inc., as tenant under the original lease and as subtenant under the sublease. 8-K 001-38056 10.1 6/4/2020 10.18 Sublease dated as of April 23, 2019 by and between Aetna Life Insurance Company and Yext, Inc. 10-Q 001-38056 10.1 5/31/2019 10.19 Credit Agreement, dated as of March 11, 2020, by and among Yext, Inc., as borrower, the lenders from time to time party thereto, and Silicon Valley Bank, as administrative agent, collateral agent, issuing lender and swingline lender. 8-K 001-38056 10.1 3/12/2020 10.20 First Amendment to Credit Agreement and Guarantee and Collateral Agreement, dated as of January 29, 2021, among Yext, Inc., as borrower and Silicon Valley Bank, as administrative agent and lender. 10-K 001-38056 10.2 3/16/2021 10.21 Second Amendment to Credit Agreement, dated as of December 22, 2022, by and among Yext, Inc., Yext Holdings, LLC, the lenders from time to time party thereto, and Silicon Valley Bank, as administrative agent, collateral agent, issuing lender and swingline lender. 8-K 001-38056 10.1 12/27/2022 10.22 Cooperation Agreement, dated September 30, 2022, by and among Yext, Inc., Lead Edge Public Fund, LP, Lead Edge Capital VI, LP, and Lead Edge Capital V, LP. 8-K 001-38056 10.1 10/4/2022 10.23# Employment Agreement between Yext, Inc. and Michael Walrath. 8-K 001-38056 10.1 3/8/2022 10.24# Form of Stand-Alone Inducement Restricted Stock Unit Agreement. 8-K 001-38056 10.2 3/8/2022 21.1 List of subsidiaries of Yext, Inc. x 23.1 Consent of Ernst & Young LLP, independent registered public accounting firm. x 24.1 Power of Attorney (contained in the signature page to this Annual Report on Form 10-K). x 31.1 Certification of Principal Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 . x 31.2 Certification of Principal Financial Officer 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 32.2 Certification of Principal Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.* x 85 101 Interactive Data Files Pursuant to Rule 405 of Regulation S-T formatted in Inline XBRL (Extensible Business Reporting Language): (i) Consolidated Balance Sheets as of January 31, 2023 and 2022, (ii) Consolidated Statements of Operations and Comprehensive Loss for the fiscal years ended January 31, 2023, 2022 and 2021, (iii) Consolidated Statements of Stockholders' Equity as of January 31, 2023, 2022 and 2021 (iv) Consolidated Statements of Cash Flows for the fiscal years ended January 31, 2023, 2022 and 2021 and (v) Notes to Consolidated Financial Statements 104 The cover page from the Company's Annual Report on Form 10-K for the fiscal year ended January 31, 2023, formatted in Inline XBRL (included in Exhibit 101). * These exhibits are furnished with this Annual Report on Form 10-K and are not deemed filed with the Securities and Exchange Commission and are not incorporated by reference in any filing of Yext, Inc. under the Securities Act of 1933, as amended, or the Securities Exchange Act of 1934, as amended, whether made before or after the date hereof and irrespective of any general incorporation language contained in such filings. # Indicates a management contract or compensatory plan or agreement. Item 16. Form 10-K Summary None. 86 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. Date: March 17, 2023 Yext, Inc. By: /s/ Darryl Bond Darryl Bond Chief Financial Officer (Principal Financial Officer) POWER OF ATTORNEY KNOW ALL PERSONS BY THESE PRESENTS, that each person whose signature appears below hereby constitutes and appoints Michael Walrath and Darryl Bond, and each of them, as his or her true and lawful attorney-in-fact and agent with full power of substitution, for him or her in any and all capacities, to sign any and all amendments to this Annual Report on Form 10-K, and to file the same, with all exhibits thereto and other documents in connection therewith, with the SEC, granting unto said attorney-in-fact and agent 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 or she 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 hereof. 87 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 in the capacities and on the dates indicated. Signature Title Date /s/ Michael Walrath Chief Executive Officer and Director March 17, 2023 Michael Walrath (Principal Executive Officer) /s/ Darryl Bond Chief Financial Officer March 17, 2023 Darryl Bond (Principal Financial Officer) /s/ Shane Battier Director March 17, 2023 Shane Battier /s/ Brian Distelburger Director March 17, 2023 Brian Distelburger /s/ Jesse Lipson Director March 17, 2023 Jesse Lipson /s/ Julie Richardson Director March 17, 2023 Julie Richardson /s/ Andrew Sheehan Director March 17, 2023 Andrew Sheehan /s/ Evan Skorpen Director March 17, 2023 Evan Skorpen /s/ Hillary Smith Director March 17, 2023 Hillary Smith /s/ Seth Waugh Director March 17, 2023 Seth Waugh /s/ Tamar Yehoshua Director March 17, 2023 Tamar Yehoshua 88