Alaunos Therapeutics, Inc. 10-Q

Item 4. Controls and Procedures Evaluation of Disclosure Controls and Procedures Our management, with the participation of our principal executive officer and principal financial officer, has evaluated the effectiveness of our disclosure controls and procedures (as defined in Rules 13a-15(e) or 15d-15(e) under the Securities Exchange Act of 1934, as amended, or the Exchange Act) as of June 30, 2021. The term “disclosure controls and procedures,” as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act, means controls and other procedures of a company that are designed to ensure that information required to be disclosed by the company in the reports that it files or submits under the Exchange Act is recorded, processed, summarized and reported, within the time periods specified in the Securities and Exchange Commission’s rules and forms. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required 32 to be disclosed by a company in the reports that it files or submits under the Exchange Act is accumulated and communicated to the company’s management, including its principal executive and principal financial officers, or persons performing similar functions, as appropriate to allow timely decisions regarding required disclosure. Our management recognizes that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving their objectives and our management necessarily applies its judgment in evaluating the cost-benefit relationship of possible controls and procedures. Based on the evaluation of our disclosure controls and procedures as of June 30, 2021, our principal executive officer and principal financial officer concluded that, as of such date, our disclosure controls and procedures were not effective at the reasonable assurance level. Material Weakness At June 30, 2021, we identified a material weakness in our internal controls over financial reporting relating to the reconciliation and review of our accounts in a timely manner. 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 interim or annual financial statements will not be prevented or detected on a timely basis. Specifically, our identified material weakness existing in our financial reporting process relates to the lack of sufficient accounting resources to execute certain controls related to the reconciliation and review of accounts in a timely manner. The material weakness had no impact on any amounts reported in the financial statements for the quarter ended June 30, 2021 or for any previous period. Remediation Efforts to Address Material Weakness We currently are preparing a remediation plan to address the underlying cause of the material weakness described above. We expect that the remediation plan will include, among other things, reassessing the design and operation of the internal controls over our financial statement close process and the related accounting staffing levels and experience and designing and implementing effective internal controls related to reconciliation and review of our accounts. The material weakness had no impact on any amounts reported in the financial statement for the quarter ended June 30, 2021 or for any previous period. Management is committed to remediating the material weakness in a timely manner. Changes in Internal Control over Financial Reporting We are taking actions to remediate the material weakness related to our internal control over financial reporting, as described above. However, our remediation efforts were not complete as of June 30, 2021. Other than the changes disclosed above, there were no material changes in our internal control over financial reporting identified in connection with the evaluation required by Rules 13a-5 and 15d-15 under the Exchange Act that occurred during the quarter ended June 30, 2021 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting. 33 Part II - Other Information