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Item 9A. Controls and Procedures

2024-02-26 compared with 2023-03-01 · 57 added, 62 removed, 137 unchanged (46% of the section changed)

2 unchanged sentences

The Company maintains disclosure controls and procedures (as defined in Rule 13a-15(e) under the Exchange Act) that are designed to ensure that information required to be disclosed in the Company’s reports 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, and that such information is accumulated and communicated to the Company’s management, including the principal executive officer and the principal financial officer, as appropriate, to allow timely decisions regarding required disclosure.

Our CEO and CFO concluded that, as of December 31, 2022, our disclosure controls and procedures were effective.

The Company’s management, with the participation of the Company’s Chief Executive Officer and Chief Financial Officer, evaluated the effectiveness of the Company’s disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act) at the end of the period covered by this Annual Report.

Based on that evaluation, our Chief Executive Officer and Chief Financial Officer concluded that, as of December 31, 2023, our disclosure controls and procedures were effective.

Management’s Annual Report on Internal Control over Financial Reporting

Ziff Davis’ management is responsible for establishing and maintaining adequate internal control over financial reporting (as defined in Rules 13a-15(f) and15d-15(f) under the Exchange Act) for Ziff Davis.

In order to evaluate the effectiveness of internal control over financial reporting, as required by Section 404 of the Sarbanes-Oxley Act, management has conducted an assessment, including testing, using the criteria in Internal Control – Integrated Framework, issued by the Committee of Sponsoring Organizations of the Treadway Commission (“COSO”) using the 2013 framework.

In order to evaluate the effectiveness of internal control over financial reporting, as required by Section 404 of the Sarbanes-Oxley Act, under the supervision and with the participation of our management, including our Chief Executive Officer and Chief Financial Officer, we conducted an evaluation of the effectiveness of our internal control over financial reporting using the criteria in Internal Control – Integrated Framework, issued by the Committee of Sponsoring Organizations of the Treadway Commission (“COSO”) using the 2013 framework.

Our system of internal control over financial reporting 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.

1 unchanged sentence

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.

Based on its assessment, management has concluded that Ziff Davis’s internal control over financial reporting was effective as of December 31, 2022.

Because of the timing of acquisitions in 2022, pursuant to applicable SEC staff guidance, management was not required to and therefore did not assess the effectiveness of internal control over financial reporting of all of the 2022 acquisitions (see Note 4 - Business Acquisitions in the accompanying consolidated financial statements).

These acquisitions combined constituted 5.4% of total assets as of December 31, 2022 and 2.4% of revenues for the year then ended.

Remediation of Material Weakness

During the year ended December 31, 2021, we determined that we did not design and maintain effective controls over the accounting for certain elements related to the Consensus Cloud Solutions, Inc.

(“Consensus”) Spin-off.

The control activities were not designed to allow the Company to timely identify and account for (i) a debt exchange with a third-party lender that resulted in a loss on extinguishment of existing debt, (ii) the unrealized gain on the Company’s remaining 19.9% investment in Consensus, and (iii) the completeness and accuracy of certain amounts classified in discontinued operations in the consolidated financial statements.

Although this control weakness did not result in any material misstatement of our consolidated financial statements for the periods presented, it is reasonably possible that it could have led to a material misstatement of account balances or disclosures.

Accordingly, management had concluded that this control weakness constituted a material weakness.

Management has completed the execution of its remediation plan and remediated the material weakness in internal control over financial reporting that was reported as of December 31, 2021.

During 2022, our management enhanced and revised the design of existing controls and procedures over our accounting for significant non-recurring transactions.

These controls relate to the research, analysis and documentation supporting our management’s evaluations, judgments, and conclusions that are required in order to account for significant unusual transactions.

We enhanced our approach to and the execution of the research, analysis, and documentation related to these matters.

Our process of consulting third-party experts was also enhanced and we continue to include outreach to and coordination with experts with the relevant knowledge and experience to assist our management with the evaluation of our accounting for significant non-recurring transactions.

During the fourth quarter of 2022, we completed our testing of the operating effectiveness of the implemented controls and found them to be effective.

As a result, we have concluded the material weakness has been remediated as of December 31, 2022.

Our internal controls over financial reporting as of December 31, 2022 have been audited by BDO USA, LLP, an independent registered public accounting firm, as stated in the attestation report which is included herein.

Based on our evaluation, management concluded that Ziff Davis’s internal control over financial reporting was effective as of December 31, 2023.

Our internal control over financial reporting as of December 31, 2023 have been audited by KPMG LLP, the Company’s independent registered public accounting firm, as stated in their audit report which is included herein.

Changes in Internal Control Over Financial Reporting

Other than in respect of the remediation activities described above, there have been no changes in our internal control over financial reporting (as defined in Rule 13a-15(f) under the Exchange Act) which occurred during the fourth quarter of our fiscal year ended December 31, 2022 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

During the quarter ended March 31, 2023, we migrated our Digital Media reportable segment onto the Company’s existing Enterprise Resource Planning (“ERP”) system.

Consequently, certain business process controls have been modified to incorporate the controls contained within the ERP system.

We do not believe this implementation has had or will have a material adverse effect on our internal control over financial reporting.

There have been no changes in our internal control over financial reporting (as defined in Rule 13a-15(f) under the Exchange Act) which occurred during the fourth quarter of our fiscal year ended December 31, 2023 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

(d) Report of Independent Registered Public Accounting Firm

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

Shareholders and Board of Directors

To the Stockholders and Board of Directors

Ziff Davis, Inc.:

New York, New York

Opinion on Internal Control over Financial Reporting

We have audited Ziff Davis, Inc.’s (the “Company’s”) internal control over financial reporting as of December 31, 2022, based on criteria established in Internal Control – Integrated Framework (201 3) issued by the Committee of Sponsoring Organizations of the Treadway Commission (the “COSO criteria”).

In our opinion, 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 consolidated balance sheets of the Company as of December 31, 2022 and 2021, the related consolidated statements of operations, comprehensive income, 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 March 1, 2023 expressed an unqualified opinion thereon.

We have audited Ziff Davis, Inc.

and subsidiaries' (the Company) internal control over financial reporting as of December 31, 2023, based on criteria established in Internal Control - Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission.

In our opinion, the Company maintained, in all material respects, effective internal control over financial reporting as of December 31, 2023, based on criteria established in Internal Control - Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission.

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the consolidated balance sheet of the Company as of December 31, 2023, the related consolidated statement of operations, comprehensive income, cash flows, and stockholders' equity for the year then ended, and the related notes (collectively, the consolidated financial statements), and our report dated February 26, 2024 expressed an unqualified opinion on those consolidated financial statements.

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 Item 9A, Management’s Annual Report on Internal Control over Financial Reporting.

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 U.S.

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 of internal control over financial reporting in accordance with the standards of 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, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk.

Our audit of internal control over financial reporting included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk.

Our audit also included performing such other procedures as we considered necessary in the circumstances.

We believe that our audit provides a reasonable basis for our opinion.

As indicated in the accompanying Item 9A, Management’s Annual 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 2022 acquisitions, which are included in the consolidated balance sheets of the Company as of December 31, 2022, and the related consolidated statements of operations, comprehensive income, stockholders’ equity, and cash flows for the year then ended.

These acquisitions combined constituted 5.4% of total assets as of December 31, 2022, and 2.4% of revenues for the year then ended.

Management did not assess the effectiveness of internal control over financial reporting of the 2022 acquisitions because of the timing of these acquisitions.

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 the 2022 acquisitions.

Definition and Limitations of Internal Control Over Financial Reporting

5 unchanged sentences

/s/ BDO USA, LLP

Los Angeles, California

March 1, 2023

/s/ KPMG, LLP

New York, New York

February 26, 2024

Other Information

During the quarter ended December 31, 2023, no director or officer of the Company adopted or terminated a “Rule 10b5-1 trading arrangement” or “non-Rule 10b5-1 trading arrangement”, as each term is defined in Item 408(a) of Regulation S-K.

Certain of our officers have made elections to participate in, and are participating in, our employee stock purchase plan and 401(k) plan and have made, and may from time to time make, elections to have shares withheld to cover withholding taxes or pay the exercise price of options, which may be designed to satisfy the affirmative defense conditions of Rule 10b5-1 under the Exchange Act or may constitute non-Rule 10b5-1 trading arrangements (as defined in Item 408(c) of Regulation S-K).

Disclosure Regarding Foreign Jurisdictions that Prevent Inspections

Not applicable.

Information required under Item 10, Directors, Executive Officers and Corporate Governance, Item 11, Executive Compensation, Item 12, Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters, Item 13, Certain Relationships and Related Transactions, and Director Independence and Item 14, Principal Accountant Fees and Services, is hereby incorporated by reference to the information to be set forth in our proxy statement for the 2022 annual meeting of stockholders to be filed with the SEC within 120 days after the end of our fiscal year ended December 31, 2022.

Information required under Item 10., Directors, Executive Officers and Corporate Governance, Item 11., Executive Compensation, Item 12., Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters, Item 13., Certain Relationships and Related Transactions, and Director Independence and Item 14., Principal Accountant Fees and Services, is hereby incorporated by reference to the information to be set forth in our definitive proxy statement for the 2024 annual meeting of stockholders to be filed with the SEC within 120 days after the end of our fiscal year ended December 31, 2023.

Exhibits and Financial Statement Schedules

1 unchanged sentence

The following financial statements are filed as a part of this Annual Report on Form 10-K:

Report of Independent Registered Public Accounting Firm (BDO USA, LLP;

Report of Independent Registered Public Accounting Firm (BDO USA, P.C.;

Los Angeles, California;

PCAOB ID # 243 )

Report of Independent Registered Public Accounting Firm (KPMG, LLP;

New York, New York;

PCAOB ID # 185 )

Consolidated Balance Sheets

4 unchanged sentences

Notes to Consolidated Financial Statements

(a) (2) Financial Statement Schedule.

The following financial statement schedule is filed as part of this Annual Report on Form 10-K:

Schedule II-Valuation and Qualifying Accounts

All other schedules are omitted because they are not required or the required information is shown in the financial statements or notes thereto.

(a) (2) Financial Statement Schedules.

Financial statement schedules are omitted because they are not required or the required information is shown in the financial statements or notes thereto.

(a) (3) Exhibits.

9 unchanged sentences

dated as of October 7, 2021 (incorporated by reference to Exhibit 3.1 to Ziff Davis’ Current Report on Form 8-K filed on October 8, 2021.

Fifth Amended and Restated By-Laws (incorporated by reference to Exhibit 3.4 to Ziff Davis’ Quarterly Report on Form 10-Q filed on November 9, 2021 (File No.

S ixth Amended and Restated By-Laws

Specimen of Common Stock Certificate (Incorporated by reference to Exhibit 4.1.2 to Ziff Davis’ Current Report on Form 8-K filed on December 7, 2011 (File No.

7 unchanged sentences

J2 Global, Inc.

2007 Stock Option Plan (incorporated by reference to Exhibit A to Ziff Davis’ Definitive Proxy Statement on Schedule 14A filed on September 18, 2007 (File No.

J2 Global, Inc.

2015 Stock Option Plan (incorporated by reference to Annex A to Ziff Davis’ Definitive Proxy Statement on Schedule 14A filed on March 26, 2015 (File No.

4 unchanged sentences

Form of Performance Stock Unit Agreement Pursuant to J2 Global, Inc.

2015 Stock Option Plan ( i ncorporated by reference to Exhibit 10.2 to Ziff Davis’ Quarterly Report on Form 10-Q filed on May 10, 2021 (File No.

2015 Stock Option Plan (incorporated by reference to Exhibit 10.2 to Ziff Davis’ Quarterly Report on Form 10-Q filed on May 10, 2021 (File No.

Amended and Restated J2 Global, Inc.

11 unchanged sentences

and Layth Taki, effective as of September 27, 2022 (incorporated by reference to Exhibit 10.1 to Ziff Davis’ Quarterly Report on From 10-Q filed on November 9, 2022 (File No.

Separation and Release of Claims Agreement between Steve Dunn and Ziff Davis, Inc.

(incorporated by reference to Exhibit 10.2 to Ziff Davis’ Quarterly Report on From 10-Q filed on November 9, 2022 (File No.

Second Amended and Restated Limited Partnership Agreement, dated as of January 19, 2018, by and among OCV I GP, LLC and J2 Global, Inc.

(incorporated by reference to Exhibit 10.9 to Ziff Davis’ Current Report on Form 10-K filed on March 1, 2018 (File No.

Credit Agreement, dated as of April 7, 2021, among J2 Global, Inc., the Lenders from time to time party thereto and MUFG Union Bank, N.A., as Administrative Agent and Collateral Agent (incorporated by reference to Exhibit 10.1 to Ziff Davis’ Quarterly Report on Form 10-Q filed on August 9, 2021 (File No.

Credit Agreement, dated as of April 7, 2021, among J2 Global, Inc., the Lenders from time to time party thereto and MUFG Union Bank, N.A., as Administrative Agent and Collateral Agent (incorporated by r eference to Exhibit 10.1 to Ziff Davis’ Quarterly Report on Form 10-Q filed on August 9, 2021 (File No.

First Amendment to Credit Agreement, dated as of June 2, 2021, by and among J2 Global, Inc., the subsidiaries of J2 Global, Inc.

12 unchanged sentences

(incorporated by reference to Exhibit 10.1 to Ziff Davis’ Current Report on Form 8-K filed on October 8, 2021.

First Amendment to Transition Services Agreement, dated as of Oc tober 6, 2022 , by and between Ziff Davis, Inc.

and Consensus Cloud Solutions, Inc.

First Amendment to Transition Services Agreement, dated as of October 6, 2022, by and between Ziff Davis, Inc.

and Consensus Cloud Solutions, In c .

(incorporated by reference to Exhibit 10.

20 to Ziff Davis’ Annual Report on Form 10-K filed on March 1 , 202 3 (File No.

Second Amendment to Transition Services Agreement, dated as of January 3, 2023, by and between Ziff Davis, Inc.

and Consensus Cloud Solutions, Inc.

(incorporated by reference to Exhibit 10.2 1 to Ziff Davis’ Annual Report on Form 10-K filed on March 1, 2023 (File No.

Tax Matters Agreement, dated as of October 7, 2021, by and between Ziff Davis, Inc.

16 unchanged sentences

List of subsidiaries of Ziff Davis, Inc.

Consent of Independent Registered Public Accounting Firm – BDO USA, LLP

Consent of Independent Registered Public Accounting Firm – KPMG , LLP

Consent of Independent Registered Public Accounting Firm – BDO USA, P.

Certification by Principal Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

1 unchanged sentence

Certification of Principal Executive Officer and Principal Financial Officer pursuant to 18 U.S.C.

Ziff Davis, Inc.

Clawback Policy

101.INS XBRL Instance Document

8 unchanged sentences

Form 10-K Summary

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, on March 1, 2023.

Ziff Davis, Inc.

4 unchanged sentences

Signature Title Date

/s/ VIVEK SHAH Chief Executive Officer and a Director March 1, 2023

/s/ VIVEK SHAH Chief Executive Officer and a Director February 26, 2024

Vivek Shah (Principal Executive Officer)

/s/ BRET RICHTER Chief Financial Officer March 1, 2023

/s/ BRET RICHTER Chief Financial Officer February 26, 2024

(Principal Financial Officer)

/s/ LAYTH TAKI Chief Accounting Officer March 1, 2023

/s/ SARAH FAY Director March 1, 2023

/s/ TRACE HARRIS Director March 1, 2023

/s/ LAYTH TAKI Chief Accounting Officer February 26, 2024

/s/ SARAH FAY Director February 26, 2024

/s/ JANA BARSTEN

Director February 26, 2024

/s/ TRACE HARRIS Director February 26, 2024

/s/ WILLIAM B.

KRETZMER Director March 1, 2023

/s/ JONATHAN F.

MILLER Director March 1, 2023

TAYLOR Director March 1, 2023

KRETZMER Director February 26, 2024

/s/ KIRK MCDONALD

Director February 26, 2024

Kirk McDonald

TAYLOR Director February 26, 2024

/s/ NEVILLE R.

Director February 26, 2024

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