10-K/A: System1 Files Amended 10-K to Include Director, Executive Compensation Details

Sentiment:

10-K/A Amendment 25 April 2025 4:55 PM

System1, Inc. files an amendment to its 2024 annual report on Form 10-K to include information on directors, executive compensation, and related matters previously intended to be incorporated by reference from a proxy statement.

Delay expectedThe company does not expect to file its definitive proxy statement by April 30, 2025, as originally planned.

Summary

System1, Inc. is filing Amendment No. 1 on Form 10-K/A to its Annual Report on Form 10-K for the year ended December 31, 2024.
The amendment includes information regarding 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) of Part III of the Original Report.
The company is amending the report because it does not expect to file its definitive proxy statement by April 30, 2025, as originally planned.
Item 15 of Part IV has been amended to include new certifications by the principal executive officer and principal financial and accounting officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
The amendment does not modify or update the Original Report in any other way and should be read in conjunction with it.
The board of directors consists of Michael Blend, Ryan Caswell, John Civantos, Tanmay Kumar, Caroline Horn, Taryn Naidu, Charles Ursini, Moujan Kazerani, and Frank Martire Jr.
Key executive officers include Michael Blend (CEO), Charles Ursini (President & COO), Brian Coppola (Chief Ad Operations Officer), Tridivesh Kidambi (CFO), Elizabeth Sestanovich (Chief People Officer), and Daniel Weinrot (General Counsel).
The company's independent directors are Mmes. Horn and Kazerani and Messrs. Caswell, Civantos, Kumar, Martire and Naidu.
Deloitte serves as the independent registered public accounting firm for the fiscal year ending December 31, 2024, replacing PwC.
The audit committee pre-approves all audit, audit-related, tax, and other services performed by the independent auditors.

Sentiment

Score: 7

Explanation: The document is a routine regulatory filing, primarily factual in nature. The restatement of financials in 2022 is a negative, but the company has since changed auditors and is addressing the material weaknesses. The sentiment is neutral to slightly positive.

Positives

The company is committed to enhancing its corporate governance practices.
The Board of Directors has an active role in overseeing the management of risks.
The company maintains a 401(k) retirement savings plan for its employees, including executive officers.
The company has adopted a code of ethics and business conduct that applies to all employees and directors.
The audit committee pre-approves all audit and non-audit services performed by the independent auditors.

Negatives

The company had to restate its condensed consolidated financial statements for the Predecessor period and each of the quarterly periods in the year ended December 31, 2022 due to material weaknesses in internal control over financial reporting.
A corresponding Form 4 for each Messrs. Kidambi, Coppola and Weinrot and Ms. Sestanovich to reflect the non-sale disposition of shares in connection with the net settlement of certain previously restricted stock unit awards upon vesting due to a timely notification issue in October 2024.

Risks

The company's future compensation programs may differ materially from the currently planned programs.
The company's success depends on its ability to sustain strong corporate governance practices.
The company faces risks related to credit, liquidity, and operations.
The company faces risks related to accounting matters, financial reporting, and cybersecurity.
The company faces risks associated with the independence of the board of directors and potential conflicts of interest.

Future Outlook

The discussion in Item 11 may contain forward-looking statements that are based on our current plans, considerations, expectations and determinations regarding future compensation programs. Actual compensation programs that we adopt in the future may differ materially from the currently planned programs summarized in this discussion.

Industry Context

This filing is a routine update to comply with SEC regulations regarding disclosure of executive compensation and corporate governance, which is standard practice for publicly traded companies.

Comparison to Industry Standards

The director compensation program, including annual awards and committee awards, is generally in line with industry standards for publicly traded companies of similar size and complexity.
The use of restricted stock units (RSUs) as a primary form of equity compensation for directors is a common practice.
The specific amounts awarded for committee chairpersons and members vary depending on the company and the specific committee, but the relative differences in compensation are typical.
The indemnification agreements with directors and executive officers are standard practice to attract and retain qualified individuals.

Related Party Transactions

On November 30, 2023 we completed the sale of Total Security Limited, formerly known as Protected.net Group Limited (Protected), to Just Develop It Limited, one of our significant shareholders, which is principally owned and managed by certain members of the Protected management team.
In connection with a transition service agreement, we agreed to provide certain services for which full reimbursement of cost was provided through November 30, 2024.
We were reimbursed $4.3 million in costs through the end of the transition service agreement.

Stakeholder Impact

The disclosures in this amendment provide greater transparency to shareholders regarding executive compensation and corporate governance.
The company's commitment to strong corporate governance practices is intended to build long-term value for stockholders.
The company's compensation policies are designed to incentivize and retain key employees.

Next Steps

The company will continue to engage with stockholders throughout the year.
The company will continue to review and evaluate its corporate governance practices.

Key Dates

Date	Description
2000	Daniel Weinrot started his career as a corporate associate at Latham & Watkins LLP in Los Angeles.
2001	Mr. Blend was vice president, corporate development for Jawbone from 2001 to 2003.
2002	Ms. Sestanovich was the chief executive officer and group publisher of the LA Weekly & OC Weekly from 2002 to 2013.
2003	Mr. Martire served as chairman of the board and Chief Executive Officer of Metavante since January 2003.
2004	Mr. Civantos worked at Court Square Capital Partners from April 2004 to March 2019.
2004	Ms. Horn served as an Executive Recruiting Manager and Executive Recruiter for Global Leadership for Google, Inc. (NYSE: GOOGL) from September 2004 to April 2012.
2006	Mr. Blend joined Leaf Group Ltd. when Leaf Group acquired his data company, Hotkeys, in 2006.
2006	Mr. Weinrot was deputy general counsel at Las Vegas Sands Corp from 2006 to 2010.
2007	Mr. Kidambi was vice president, finance at Leaf Group Ltd. from 2007 to 2014.
December 2010	Ms. Kazerani has been a Founding Partner of Stibel Investments since co-founding it in December 2010.
September 2010	Ms. Kazerani served as General Counsel, Chief Compliance Officer & Head of HR and Culture at Dun & Bradstreet Credibility Corporation and later as Leader of Global Corporate Strategy for D&B from September 2010 to July 2017.
November 2006	Ms. Kazerani served as General Counsel & Secretary at Zag.com which launched and merged with TrueCar, Inc. from November 2006 to September 2010.
2012	Ms. Horn has been a Partner of Andreessen Horowitz since April 2012.
2013	Mr. Blend has served as System1s chief executive officer since February 2021, and chairman of our Board of Directors (including our predecessor entities, OpenMail/S1 Holdco) since September 2013.
November 2013	Ms. Kazerani has been a Founding Partner of Bryant Stibel since co-founding it in November 2013.
2014	Ms. Horn has served as an advisor at Strava since April 2014.
2014	Mr. Naidu served as the CEO and a member of the Board of Directors of Rightside Group Ltd. upon its business separation from Leaf Group Ltd. in 2014.
2014	Mr. Kidambi was the executive vice president, finance & analytics of TV Time from October 2015 to 2016, chief financial officer of EZ Texting from 2014 to 2015.
2014	Ms. Sestanovich was the founding partner and principal of Summit Advisors, a management consulting and advisory firm, from 2014 to 2016.
2014	Mr. Ursini served as the Companys first chief executive officer from its initial founding as OpenMail in 2014 until 2019.
October 2015	Mr. Coppola was vice president and then executive vice president of product from October 2015 to June 2019.
2016	Mr. Kidambi has been System1s chief financial officer since 2016.
2016	Ms. Sestanovich has been System1s chief people officer since June 2021, and previously served as System1s chief operations officer beginning in August 2016.
2018	Mr. Blend was the EY National Entrepreneur of the Year for Media, Entertainment & Communications in 2018, together with System1s other co-founder, Charles Ursini.
January 2018	Mr. Weinrot has been System1s general counsel since January 2018.
March 2019	Mr. Civantos served as a Managing Partner and was a member of the Investment Committee at Court Square Capital Partners until March 2019.
June 2019	Mr. Coppola has been System1s chief ad operations officer since April 2025, and previously served as System1s chief product officer from June 2019 to April 2025.
September 2020	Mr. Caswell has served as the President of Cannae Holdings, Inc. (NYSE: CNNE), a publicly traded holding company, since February 2023, and previously served as its Senior Vice President of Corporate Finance from September 2020 to February 2023.
August 2020	Mr. Civantos served as Co-Head of Private Capital Group at MSD Partners, L.P. From August 2020 to March 2022.
June 2021	Ms. Sestanovich has been System1s chief people officer since June 2021.
February 2021	Michael Blend has served as System1s chief executive officer since February 2021.
January 2022	Caroline Horn has served as a member of our Board of Directors since January 2022 in connection with the closing of the Business Combination.
January 2022	Moujan Kazerani has been a member of our Board of Directors since January 2022.
January 2022	Frank R. Martire, Jr. has been a member of our Board of Directors since January 2022.
February 2022	John Civantos has been a member of our Board of Directors since February 2022.
March 2022	Mr. Civantos has been a Senior Partner at Avance Investment Management since April 2022.
March 2022	Mr. Mezzacca was issued a one-time award of 1,391,312 shares of our Class A Common Stock as payment in respect of a portion of the earnout due in connection with the Companys acquisition of CouponFollow in March 2022.
January 27, 2022	Shareholders Agreement, dated as of January 27, 2022 (the Shareholders Agreement), by and among the (i) Company, (ii) Trasimene Trebia, L.P. and BGPT Trebia LP (the Trebia Sponsors), (iii) Cannae Holdings, Inc. (Cannae Holdings and, together with the Trebia Sponsors, the Trebia Investors), (iv) Michael Blend, (v) Chuck Ursini, (vi) Nick Baker and (vii) Just Develop It Ltd. (JDI and, together with Messrs. Blend, Ursini and Baker, the Founder Shareholders).
August 2023	Tanmay Kumar has served as a member of our Board of Directors since August 2023.
August 2023	Taryn Naidu has served as a member of our Board of Directors since August 2023.
February 2023	Mr. Caswell has served as the President of Cannae Holdings, Inc. (NYSE: CNNE), a publicly traded holding company, since February 2023.
April 2024	Ryan Caswell has been a member of our Board of Directors since April 2024.
April 2024	Charles Ursini has been a member of our Board of Directors since April 2024.
February 20, 2024	Effective February 20, 2024, in consideration of the fact that Mr. Kidambi (along with our other executive officers who receive base compensation) had not received an increase in base compensation since January 2022, the base salary for Mr. Kidambi was increased from $350,000 to $450,000.
March 6, 2024	Mr. Mezzacca was issued a one-time award of 1,391,312 shares of our Class A Common Stock as payment in respect of a portion of the earnout due in connection with the Companys acquisition of CouponFollow in March 2022.
June 4, 2024	On June 4, 2024, the Audit Committee of the Board of Directors of the Company approved managements recommendation to appoint Deloitte as the Companys independent registered public accounting firm for the Companys fiscal year ending December 31, 2024, and to dismiss PwC as the Companys independent registered public accounting firm, effective immediately.
July 1, 2024	Only July 1, 2024, Messrs. Blend, Ursini and Kidambi were granted stock appreciation right awards of 2,500,000, 2,500,000 and 700,000, respectively.
July 18, 2024	On July 18, 2024, Mr. Kidambi was granted awards of 100,000 restricted stock units.
April 25, 2025	Date of the filing of the amendment.
April 30, 2025	The company does not currently expect to file its definitive proxy statement by April 30, 2025.

Keywords

executive compensation, corporate governance, directors, financial reporting, audit committee, internal control, System1, Form 10-K/A

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