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Evaluation of Disclosure Controls and Procedures
−Removed: We maintain disclosure controls and procedures (as such term is defined in Rule 13a-15(e) and 15d-15(e) under the Exchange Act) that are designed to ensure that information required to be disclosed in our reports under the Exchange Act is processed, recorded, summarized and reported within the time periods specified in the SEC’s rules and regulations and that such information is accumulated and communicated to management, including ESRT's Chief Executive Officer, its President, and its Executive Vice President, Chief Financial Officer & Chief Accounting Officer, as appropriate, to allow for timely decisions regarding required disclosure.
+Added: We maintain disclosure controls and procedures (as such term is defined in Rule 13a-15(e) and 15d-15(e) under the Exchange Act) that are designed to ensure that information required to be disclosed in our reports under the Exchange Act is processed, recorded, summarized and reported within the time periods specified in the SEC’s rules and regulations and that such information is accumulated and communicated to management, including ESRT's Chief Executive Officer and its Chief Financial Officer, as appropriate, to allow for timely decisions regarding required disclosure.
In designing and evaluating the 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, and management is required to apply its judgment in evaluating the cost-benefit relationship of possible controls and procedures.
−Removed: As of March 31, 2024, the end of the period covered by this report, we carried out an evaluation, under the supervision and with the participation of ESRT management, including ESRT's Chief Executive Officer, its President, and its Chief Financial Officer & Chief Accounting Officer, regarding the effectiveness of our disclosure controls and procedures at the end of the period covered by this report.
−Removed: Based on the foregoing, ESRT's Chief Executive Officer, its President, and its Chief Financial Officer & Chief Accounting Officer concluded, as of that time, that our disclosure controls and procedures were effective in ensuring that information required to be disclosed by us in reports filed or submitted under the Exchange Act (i) is processed, recorded, summarized and reported within the time periods specified in the SEC’s rules and forms and (ii) is accumulated and communicated to our management, including ESRT's Chief Executive Officer, its President, and its Chief Financial Officer & Chief Accounting Officer, as appropriate to allow for timely decisions regarding required disclosure.
+Added: Subsequent to the end of the period covered by this report, we carried out an evaluation, under the supervision and with the participation of management, including our Chief Executive Officer and our Chief Financial Officer, regarding the effectiveness of our disclosure controls and procedures at the end of the period covered by this report.
+Added: Based on the foregoing, our Chief Executive Officer and our Chief Financial Officer concluded, as of that time, that our disclosure controls were not effective at a reasonable level of assurance as of June 30, 2024 because of a material weakness identified in the design of certain ITGCs.
+Added: A material weakness (as defined in Rule 12b-2 under the Exchange Act) 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.
+Added: As previously reported in our Form 10-K/A for the year ended December 31, 2023 and our Form 10-Q/A for the fiscal quarter ended March 31, 2024, each filed on the date hereof, subsequent to the end of the period covered by this report, we identified a material weakness in the design of information technology ("IT") general controls ("ITGCs") related to IT systems and applications relevant to preparation of our financial statements.
+Added: In particular, the Company's ITGCs included:
+Added: (i) controls to approve and monitor changes within information systems and related applications, but the monitoring controls were not designed to ensure a complete population of changes were subject to the control procedures across all relevant IT components and (ii) the controls to approve and monitor user access to information systems and related applications, but the monitoring controls were not designed to review the appropriateness of permissions granted to approved users.
+Added: As a result, business process controls (automated and manual) that are dependent on the ineffective ITGCs, or that rely on data produced from systems impacted by the ineffective ITGCs, were also deemed ineffective.
+Added: Despite the finding of the material weakness, management has concluded that our condensed consolidated financial statements and related notes thereto included herein fairly present in all material respects the financial condition, results of operations and cash flows of the Company as of, and for, the periods presented.
+Added: Remediation of the Material Weakness in Internal Control Over Financial Reporting
+Added: The Company is in the process of implementing changes associated with the design, implementation and monitoring of ITGCs in the areas of logical access and change management for IT applications that support the Company’s financial statement preparation and reporting processes to ensure that internal controls are designed and operating effectively.
+Added: Our remediation plans will include:
+Added: • Enhancing the current change monitoring control to use an appropriate system source to help ensure a complete population of changes are reviewed to detect if any changes were made outside the Company’s established change control process across all relevant IT components.
+Added: • Adding controls to manage the appropriate assignment and maintenance of permission configurations within access groups and the users they are assigned to.
+Added: • Increasing the frequency of periodic re-evaluation of user access privileges.
+Added: • Training of relevant personnel on the design and operation of our ITGCs over financial reporting.
+Added: We believe that these actions, collectively, will remediate the material weakness identified.
+Added: However, we will not be able to conclude that we have completely remediated the material weakness until the applicable controls are fully implemented and operated for a sufficient period of time and management has concluded, through formal testing, that the remediated controls are operating effectively.
+Added: We will continue to monitor the design and effectiveness of these and other processes, procedures, and controls and will make any further changes management deems appropriate.
Changes in Internal Control Over Financial Reporting
−Removed: No changes to our internal control over financial reporting were identified in connection with the evaluation referenced above that occurred during the period covered by this report that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.
+Added: Except for the unremediated material weaknesses noted above, there were no changes to our internal control over financial reporting that were identified in connection with the evaluation referenced above that occurred during the period covered by this report that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.
OTHER INFORMATION
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See “Financial Statements – Note 9 Commitments and Contingencies” for a description of legal proceedings.
−Removed: As of March 31, 2024, there have been no material changes to the risk factors.
−Removed: See the section entitled "Risk Factors" of our Annual Report on Form 10-K for the year ended December 31, 2023 and any additional factors that may be contained in any filing we make with the SEC.
Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.