Acumen Pharmaceuticals, Inc. 10-Q

Item 4. Controls and Procedures. Evaluation of Disclosure Controls and Procedures 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) as of September 30, 2021. Based on the evaluation of our disclosure controls and procedures, our management concluded that, as of September 30, 2021, our disclosure controls and procedures were not effective because our internal controls over financial reporting were not adequate due to the material weakness described below. Notwithstanding this material weakness, management concluded that the unaudited condensed consolidated financial statements contained in this Quarterly Report on Form 10-Q fairly present, in all material respects, our financial condition, results of operations and cash flows for the periods presented in conformity with U.S. GAAP. Material Weakness As previously disclosed, we previously identified a material weakness in our internal control over financial reporting that existed as of December 31, 2020 in connection with the preparation and audit of our consolidated financial statements as of December 31, 2020 and 2019 and for the years then ended. A material weakness is a deficiency, or combination of deficiencies, in internal control over financial reporting, such that there is a reasonable possibility that a material misstatement of a company’s annual or interim consolidated financial statements will not be prevented or detected on a timely basis. We determined that we had a material weakness because we did not design controls to address segregation of duties related to roles and responsibilities in our accounting department, including with respect to account reconciliation and receipt/disbursement duties, independent review of journal entries and access to the accounting systems, primarily due to the limited number of personnel in this function. This material weakness did not result in a misstatement to our financial statements; however, it could result in a misstatement of account balances or disclosures that would result in a material misstatement to the annual or interim consolidated financial statements for future periods that would not be prevented or detected. We have devised a plan to remediate this material weakness, including by hiring additional accounting staff and upgrading our accounting systems. In the fourth quarter of 2021, we hired an Associate Vice President, Corporate Controller and Treasurer. In addition, we plan to transition certain externally provided accounting services to internal staff, though there is no guarantee that these remediation efforts will be successful or that we will not experience additional material weaknesses in the future. As management continues to evaluate and work to improve its internal control over financial reporting, management may determine it is necessary to take additional measures to address the material weakness. Our remediation initiatives are ongoing and, as such, management has concluded that the material weakness cannot be considered remediated as of September 30, 2021. Until the relevant controls have been operating for a sufficient period of time and management has concluded, through testing, that these controls are operating effectively, the material weakness described above will continue to exist. Changes in Internal Control Over Financial Reporting Other than the remediation efforts described above, there have been no other changes in our internal control over financial reporting, as such term is defined in Rules 13a-15(f) and 15d-15(f) promulgated under the Securities Exchange Act of 1934, as amended, that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting. 32 Table of Contents PART II—OTHER INFORMATION