Aebi Schmidt Holding AG 10-Q

Item 4. Controls and Procedures. Evaluation of Disclosure Controls and Procedures Our management, with the participation of our Chief Executive Officer and Chief Financial Officer, has evaluated the effectiveness of our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act), as of the end of the period covered by this Quarterly Report. Based on that evaluation as of June 30, 2026 , our Chief Executive Officer and Chief Financial Officer concluded that our disclosure controls and procedures were not effective due to the material weaknesses in internal control over financial reporting described below. Previously Identified Material Weakness in Internal Control over Financial Reporting As previously disclosed in Aebi Schmidt’s Annual Report on Form 10-K for the year ended December 31, 2025, management identified material weaknesses in internal control over financial reporting. A material weakness is a deficiency, or a combination of deficiencies, in internal control over financial reporting such that there is a reasonable possibility that a material misstatement of Aebi Schmidt’s annual or interim consolidated financial statements will not be prevented or detected on a timely basis. Aebi Schmidt’s management identified the following material weaknesses in its internal control over financial reporting: i. A lack of designing and maintaining an effective control environment commensurate with Aebi Schmidt’s financial reporting requirements due to an insufficient number of professionals with an appropriate level of internal controls and technical U.S. GAAP knowledge, experience, and training to appropriately analyze, record, and disclose accounting matters, including complex, non-routine transactions accurately and timely. ii. A lack of maintaining formal accounting policies and procedures and designing and maintaining controls related to significant accounts and disclosures to achieve complete, accurate, and timely financial accounting, reporting, and disclosures. iii. A lack of consistently establishing appropriate authorities and responsibilities related to the segregation of duties in Aebi Schmidt's finance and accounting functions. iv. A failure to design and maintain effective information technology (“IT”) general controls over user access, change management, and segregation of duties for SAP information systems in Europe that are relevant to the preparation of its financial statements. v. A failure to design and maintain effective IT general controls over user access, change management, and segregation of duties for the remaining information systems that are relevant to the preparation of its financial statements. The above control deficiencies did not result in a material misstatement to the financial statements. However, the IT general control deficiencies could affect the maintenance of effective segregation of duties, as well as the effectiveness of IT-dependent controls (such as automated controls that address the risk of material misstatement to one or more assertions, along with the IT controls and underlying data that support the effectiveness of system-generated data and reports), which could result in misstatements that potentially impact all financial statement accounts and disclosures that would not be prevented or detected. Remediation Plan Aebi Schmidt’s management has a remediation plan to remediate the material weaknesses and will continue to evaluate the effectiveness of these remediation efforts. The remediation plan includes the following actions: Page 38 of 43 Index a. Enhancing the Company’s accounting and finance organization by hiring additional personnel with appropriate U.S. GAAP technical accounting and SEC financial reporting requirements expertise. b. Providing targeted training to existing personnel on U.S. GAAP technical accounting, internal control over financial reporting, and SEC financial reporting requirements. c. Designing and implementing a formal financial reporting control framework, including strengthening management review controls and documentation standards. d. Designing and implementing IT general and application controls for all systems that materially impact financial reporting, including user access, change management, and segregation of duties controls. Management will continue to evaluate the effectiveness of these remediation efforts and will not consider the material weaknesses remediated until applicable controls are operational for a sufficient period, and management concludes through testing that these controls are operating effectively. Changes in Internal Control over Financial Reporting There have been no changes in our internal control over financial reporting (as such term is defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act) that occurred during the fiscal quarter ended June 30, 2026 that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting. Inherent Limitations on Effectiveness of Controls An effective internal control system, no matter how well designed, has inherent limitations, including the possibility of human error or overriding of controls, and therefore can provide only reasonable assurance with respect to reliable financial reporting. Because of its inherent limitations, our internal control over financial reporting may not prevent or detect all misstatements, including the possibility of human error, the circumvention or overriding of controls, or fraud. Effective internal controls can provide only reasonable assurance with respect to the preparation and fair presentation of financial statements. Page 39 of 43 Index PART II—OTHER INFORMATION