Eloxx Pharmaceuticals, Inc. 10-Q

Item 4. Controls and Procedures Limitations on Effectiveness of Controls and Procedures We maintain disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act) that are designed to ensure that information required to be disclosed in the reports that we file or submit under the Exchange Act is (1) recorded, processed, summarized, and reported within the time periods specified in the SEC’s rules and forms and (2) accumulated and communicated to our management, including our principal executive officer and principal financial officer, to allow timely decisions regarding required disclosure. In designing and evaluating our disclosure controls and procedures, management recognizes that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving the desired control objectives. In addition, the design of disclosure controls and procedures must reflect that there are resource constraints and management is required to apply judgment in evaluating the benefits of possible controls and procedures relative to their costs. Management’s Evaluation of Disclosure Controls and Procedures Our management, with the participation of our Chief Executive Officer and Interim Chief Financial Officer, evaluated the effectiveness of our disclosure controls and procedures as of June 30, 2026. Based on that evaluation, our Chief Executive Officer and Interim Chief Financial Officer concluded that, due to the material weakness described below, our disclosure controls and procedures were not effective as of June 30, 2026. The Company identified the following material weakness in its internal control over financial reporting during the year ended December 31, 2025, which had not been remediated as of June 30, 2026: The material weakness resulted from inconsistent execution of certain financial reporting controls, primarily within the financial close and reconciliation processes. Specifically, controls related to timely preparation and review of account reconciliations and period-end review procedures were not consistently performed or documented at a level sufficient to support the completeness and accuracy of financial reporting. These deficiencies also affected certain review controls over complex accounting analyses and technical accounting documentation prepared during the period. Notwithstanding the material weakness, management believes the unaudited condensed consolidated financial statements in this report present fairly, in all material respects, our financial position, results of operations, and cash flows in conformity with U.S. GAAP. Remediation Status Management is fully committed to addressing the material weakness in our internal controls and has implemented several key initiatives to strengthen them. During the quarter ended June 30, 2026, management continued to execute on its remediation plan. Remediation activities during the quarter included, among other actions:  Increasing accounting and financial reporting resources through the addition of qualified personnel and the continued use of external advisors;  Continuing to execute a consistent full monthly and quarterly financial close process; and  Initiating steps to enhance documentation standards, approval protocols, and oversight procedures. Management continues to work toward strengthening management review controls over complex and judgmental accounting areas and enhancing the timely preparation and review of reconciliations of significant financial statement accounts. 28 Changes in Internal Control over Financial Reporting There have been no changes in our internal control over financial reporting that occurred during the quarter ended June 30, 2026, that materially affected, or are reasonably likely to materially affect, our internal control over financial reporting, except as disclosed in "Remediation Status" above. 29 PART II. OTHER INFORMATION