YUNHONG GREEN CTI LTD. 10-Q

Item 4. Controls and Procedures (a) Disclosure Controls and Procedures We maintain disclosure controls and procedures, as such term is defined in Rules 13a-15(e) and 15d-15(e) of the Securities Exchange Act of 1934 (the “Exchange Act”), that are designed to ensure that information required to be disclosed in the reports filed or submitted under the Exchange Act, is recorded, processed, summarized, and reported within the time periods specified by the Commission’s rules and forms. Disclosure controls and procedures include controls and procedures designed to ensure that information required to be disclosed in our reports filed or submitted under the Exchange Act are properly recorded, processed, summarized and reported within the time periods required by the Commission’s rules and forms. We carried out an evaluation, under the supervision and with the participation of our management, including our Chief Executive Officer (principal executive officer) and Corporate Controller (principal financial officer), of the effectiveness of the design and operation of these disclosure controls and procedures, as such term is defined in Exchange Act Rule 13a-15(e), as of June 30, 2025. Based on this evaluation, the Chief Executive Officer and Corporate Controller concluded that our disclosure controls and procedures were not effective as of June 30, 2025, the end of the period covered by this Quarterly Report on Form 10-Q, due to the material weaknesses described below. 15 Table of Contents (b) Management’s Report on Internal Control over Financial Reporting Management of the Company is responsible for establishing and maintaining adequate internal control over financial reporting as defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act. Internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness of internal control over financial reporting to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate. Management has assessed the effectiveness of our internal control over financial reporting as of June 30, 2025. In making our assessment of the effectiveness of internal control over financial reporting, management used the criteria set forth in Internal Control — Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (“COSO”). A material weakness is a control deficiency, or combination of control deficiencies, in internal control over financial reporting such that there is a reasonable possibility that a material misstatement of the registrant’s annual or interim financial statements will not be prevented or detected on a timely basis. As a result of our evaluation of our internal control over financial reporting, management identified the following material weakness in our internal control over financial reporting: ● We lacked a sufficient number of accounting professionals with the necessary knowledge, experience and training to adequately account for significant, unusual transactions that have resulted in misapplications of GAAP, particularly with regard to equity financing arrangements and the timing of recognition of certain non-cash charges. As a result of the material weakness, we have concluded that we did not maintain effective internal control over financial reporting as of June 30, 2025. Plan for Remediation of Material Weakness In 2024, a material weakness was identified in our internal control over financial reporting, specifically related to the accuracy of standard labor and overhead cost calculations. As of June 30, 2025, management has concluded that this material weakness has been remediated through the implementation of enhanced processes and controls to ensure that standard labor and overhead costs are calculated appropriately and accurately. These improvements include, but are not limited to, periodic monitoring and analysis of variances between actual and standard manufacturing costs, overseen by both the Chief Executive Officer and the Corporate Controller (Principal Financial Officer). The Company believes that the combination of responsibilities held by the Chief Executive Officer and the Corporate Controller strengthens financial oversight, enhances internal control effectiveness, and promotes leadership continuity. As management continues to evaluate and refine our internal control framework, additional steps may be taken to address any remaining deficiencies or to further strengthen and remediation measures already in place. This quarterly report does not include an attestation report of our registered public accounting firm regarding internal control over financial reporting. Management’s report was not subject to attestation by its registered public accounting firm pursuant to the Dodd-Frank Wall Street Reform and Consumer Protection Act, which permits the Company to provide only management’s report in this quarterly report. (c) Changes in Internal Control over Financial Reporting On April 25, 2025, Frank Cesario notified the Board of Directors of his resignation as Director, effective immediately, due to personal reasons. Mr. Cesario’s departure was not due to any disagreement with the Company on any matter relating to its operations, policies, or practices. On May 1, 2025, Douglas Bosley notified the Board of Directors of his resignation as Director, effective immediately, due to personal reasons. Mr. Bosley’s departure was not due to any disagreement with the Company on any matter relating to its operations, policies, or practices. Other than as described in the Plan for Remediation of Material Weakness, there were no changes in our internal control over financial reporting, as defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act, during our most recently completed fiscal quarter that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting. Part II. OTHER INFORMATION