Theriva Biologics, Inc. 10-Q

ITEM 4. CONTROLS AND PROCEDURES. (a) Evaluation of Disclosure Controls and Procedures Our management, with the participation of our Chief Executive Officer, evaluated the effectiveness of our disclosure controls and procedures as of March 31, 2023. 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 a 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 SEC’s rules and forms. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required 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. We have adopted and maintain disclosure controls and procedures (as defined Rules 13a-15(e) and 15d-15(e) under the Exchange Act) that are designed to provide reasonable assurance that information required to be disclosed in the reports filed under the Exchange Act, such as this Quarterly Report on Form 10-Q, is collected, recorded, processed, summarized and reported within the time periods specified in the rules of the SEC. The Company’s disclosure controls and procedures are also designed to ensure that such information is accumulated and communicated to management to allow timely decisions regarding required disclosure. Management recognizes that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving their objectives and management necessarily applies its judgment in evaluating the cost-benefit relationship of possible controls and procedures. Due to the material weaknesses in internal control over financial reporting as described below, our Chief Executive Officer who also serves as its Chief Financial Officer concluded that, as of the end of the period covered by this report, our disclosure controls and procedures were not effective. Material Weakness over Non-Routine Transactions During the course of the preparation of our interim and annual consolidated financial statements for the year ended December 31, 2022, we identified material weaknesses in our controls relating to accounting and disclosure controls for non-routine transactions. Specifically, the controls related to the review of internally and externally prepared reports and analysis used in the financial reporting process and the related income tax implication of non-routine transactions. 37 Table of Contents Remediation Plan In order to remediate these material weaknesses, we plan to implement the following steps to improve the overall processes of identifying and reviewing non-routine transactions and preparing interim financial statements: ● Perform additional internal review processes to ensure the appropriate accounting and disclosure of non-routine transactions. ● Engage a third-party tax specialist to assist us in the preparation and review of interim tax provisions. Should additional changes to the remediation plan be warranted, management will modify the planned measures accordingly. Material Weakness over Information Technology General Controls During the preparation of our annual consolidated financial statements for the year ended December 31, 2022, we identified a material weakness in our controls relating to general information technology controls over logical access and program change management for certain of our key information systems used to support the financial reporting process. Remediation Plan Management will ensure proper segregation of duties over all IT functions ensuring IT personnel are properly trained as to the importance of and specifics over the internal controls for which they are responsible, including consistent, repeatable performance of such controls. Management will also evaluate the responsibilities of its control owners to ensure that proper segregation of duties exists within the process level controls that are dependent upon information produced by IT systems affected by segregation of duties conflicts. Further, management will ensure IT personnel do not have conflicting responsibilities with respect to program changes, administration and user access controls, or that additional controls are implemented to perform an effective review of program changes, administration and user access. Material Weakness over Evidence of Control Performance During the preparation of our annual consolidated financial statements for the year ended December 31, 2022, we identified a material weakness relating to the ineffective design and execution of management’s review of controls, particularly with regard to the precision of the review, evidence of review procedures performed, and the evaluation of the completeness and accuracy of information utilized in the performance of the control. Remediation Plan Management will ensure all personnel are properly trained as to the importance of properly documenting and evidencing the performance of controls. When fully implemented, the Company believes that the measures described above will appropriately remediate the identified material weaknesses, although management may determine that taking additional measures to remediate the material weaknesses may be necessary. Changes in Internal Control Over Financial Reporting Except for the material weaknesses described above, there has been no change in the Company’s internal control over financial reporting during the Company’s most recent fiscal quarter that has materially affected, or is reasonably likely to materially affect, the Company’s internal control over financial reporting. ​ 38 Table of Contents PART II–OTHER INFORMATION