RADIANT LOGISTICS, INC 10-Q

Item 4. Controls and Procedures Disclosure Controls and Procedures We maintain disclosure controls and procedures that are designed to ensure that information required to be disclosed in our Exchange Act reports is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms, and that such information is accumulated and communicated to our management, including our Chief Executive Officer (“CEO”) and Chief Financial Officer (“CFO”), as appropriate, to allow timely decisions regarding required disclosure. An evaluation of the effectiveness of our “disclosure controls and procedures” (as such term is defined in Rules 13a-15(e) or 15d-15(e) of the Exchange Act as of December 31, 2020, was carried out by our management under the supervision and with the participation of our CEO and CFO. Based upon that evaluation, our CEO and CFO concluded that, as of December 31, 2020 , our disclosure controls and procedures were effective. Remediation of Material Weakness As of June 30, 2020, we concluded that a material weakness existed in our internal control over financial reporting related to the goodwill and intangible assets impairment review process. The Company identified an error in its evaluation of the annual goodwill impairment test performed as of April 1, 2020 and the interim goodwill and intangible assets impairment evaluation test performed as of June 30, 2020. Specifically, we did not design and maintain effective controls to review in sufficient detail the carrying values of the Company’s reporting units for both the annual and interim goodwill impairment tests. In addition, we did not design and maintain effective controls at the proper precision level to determine whether an impairment evaluation triggering event occurred as of June 30, 2020. 37 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 the Company’s annual or interim consolidated financial statements will not be prevented or detected on a timely basis. This material weakness did not result in a misstatement to the condensed consolidated financial statements. However, this material weakness could result in misstatements that would result in a material misstatement of the condensed consolidated financial statements that would not be prevented or detected. In response to the material weakness described above, we immediately added additional analysis and review in our goodwill and intangible assets impairment process which now includes: i). enhanced procedures and resources related to the identification and evaluation of all possible triggering events that can impact our impairment assessments, particularly during the periods the Company is impacted by the COVID-19 environment; ii). enhanced level of precision at which our internal controls over financial reporting relating to goodwill and intangible asset impairment assessments are performed, specifically in consideration of the factors analyzed in evaluating triggering events and performing management’s qualitative impairment assessment; iii). improved documentation to support the judgments applied to the impairment analyses; iv). additional training to staff involved in the control procedures over the goodwill and intangible assets cycle and assistance from third parties; and v). controls over the calculation of carrying values of reporting units and the review of this calculation. Based on the measures taken and implemented, management has tested the newly implemented control activities and found them to be effective and has concluded that the material weakness described above has been remediated as of December 31, 2020 . Changes in Internal Control Over Financial Reporting Aside from the remediation of material weakness discussed above, during the three months ended December 31, 2020 , there was no other change in our internal control over financial reporting that materially affected, or was reasonably likely to materially affect, our internal control over financial reporting (as defined in Rules 13a‑15(f) and 15d‑15(f) under the Exchange Act). PART II. OTHER INFORMATION