Item 4. Controls and Procedures
Item 4. Controls and Procedures.
Management’s Evaluation of Disclosure Controls and Procedures
We maintain disclosure controls and procedures that are designed to provide reasonable assurance that information required to be disclosed by us in the reports that we file or submit under the Securities Exchange Act of 1934, as amended, or the Exchange Act , is (i) recorded, processed, summarized and reported within the time periods specified in the SEC rules and forms and (ii) accumulated and communicated to our management, including our principal executive officer and principal financial officer, as appropriate to allow timely decisions regarding required disclosure.
Based on an evaluation under the supervision and with the participation of our management, our principal executive officer and principal financial officer have concluded that our disclosure controls and procedures as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act, were not effective as of March 31, 2025 due to the material weakness in internal control over financial reporting described below.
As previously disclosed in our Annual Report on Form 10-K, that was filed with the SEC on March 13, 2025, or 2024 Form 10-K , as of December 31, 2024, our management identified a material weakness in our internal control over financial reporting. Specifically, we did not effectively document controls that operated with a sufficient level of precision to evaluate the completeness, accuracy and reasonableness of the product sales forecast, which is used in the evaluation of excess inventory, including the calculation of excess firm purchase commitments and the classification of current and non-current inventory, or the Remaining Control Deficiencies .
Remediation Efforts of the Material Weakness — Inventories
Our management has taken and plans to continue to take actions to remediate the Remaining Control Deficiencies in our internal control over financial reporting.
We have begun the following remediation plan: increasing the level of precision of our review controls that support the completeness, accuracy and reasonableness of the sales forecast used to support our inventory evaluations, including the identification and consideration of contrary evidence that could detect a potential error in the sales forecast.
As management continues to evaluate and work to improve our internal control over financial reporting, management may determine it is necessary to take additional measures to address the material weakness. Until the 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
Except for the ongoing efforts to remediate the material weakness as noted in the preceding paragraphs, there have been no changes in our internal control over financial reporting (as defined by Rule 13a-15(f) or 15d-15(f) under the Exchange Act)
Akebia Therapeutics, Inc. | Form 10-Q | Page 39
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during the period covered by this Quarterly Report on Form 10-Q that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.
PART II—OTHER INFORMATION
Text extracted from the filing as submitted to EDGAR. Formatting, tables and exhibits are simplified for reading; the original document is authoritative for anything you rely on.