GALECTIN THERAPEUTICS INC 10-Q

Item 4. Controls and Procedures Evaluation of Disclosure Controls and Procedures Our management, with the participation of the Chief Executive Officer and Chief Financial Officer, evaluated the effectiveness of our disclosure controls and procedures (as defined in Rule 13a-15(e) promulgated under the Securities Exchange Act of 1934) and concluded that, as of September 30, 2022, our disclosure controls and procedures were not effective due to a material weakness in internal control over financial reporting described below. During the course of preparing and reviewing the Company’s interim financial statements for the period ended September 30, 2022, we identified a computational error in an accrual relating to research and development costs. This error was corrected in the financial statements as of and for the period ended September 30, 2022. Our Chief Executive Officer and our Chief Financial Officer concluded that we did not maintain effective internal control over the determination and reporting of a research and development accrual. Specifically, we did not perform a sufficiently precise review to ensure the accuracy of an accrual related to research and development costs. We have determined that this deficiency constitutes a "material weakness" in our internal control over financial reporting. We have advised our audit committee of this deficiency in our internal control over financial reporting, and the fact that this deficiency constitutes a "material weakness." A material weakness in internal control over financial reporting 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 our annual or interim financial statements will not be prevented or detected on a timely basis by our internal controls. Upon identification of this material weakness, we performed additional procedures to remediate this material weakness. Specifically, we have implemented additional reviews of research and development accruals and have enhanced documentation of processes. Management believes that these efforts will effectively remediate the material weakness. Therefore, notwithstanding the identified material weaknesses, management believes that our condensed consolidated financial statements included in this quarterly report on Form 10-Q present fairly, in all material respects, our financial position, results of operations and cash flows for the periods presented in conformity with accounting principles generally accepted in the United States. Our management, including our Chief Executive Officer and Chief Financial Officer, does not expect that our disclosure controls and procedures or our internal controls will prevent all error and all fraud. A control system, no matter how well conceived and operated, can provide only reasonable, not absolute, assurance that the objectives of the control system are met. Further, the design of a control system must reflect the fact that there are resource constraints, and the benefits of controls must be considered relative to their costs. Because of the inherent limitations in all control systems, no evaluation of controls can provide absolute assurance that all control issues and instances of fraud, if any, within the Company have been detected. Changes in Internal Control Over Financial Reporting Except as noted in the preceding paragraphs, there have not been any change in our internal control over financial reporting during the quarter ended September 30, 2022 that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting. 24 Table of Contents PART II — OTHER INFORMATION Item 1. Legal Proceedings None. Item 1A. Risk Factors The information set forth in this report should be read in conjunction with the risk factors set forth in Item 1A, “Risk Factors,” of Part I of our Annual Report on Form 10-K for the year ended December 31, 2021, which could materially impact our business, financial condition or future results. Item 2. Unregistered Sales of Equity Securities and Use of Proceeds None Item 3. Defaults Upon Senior Securities None Item 4. Mine Safety Disclosures Not Applicable