Company: NEOG
Filing Date: 2025-01-15
Form Type: 10-Q
Source: 0000950170-25-005818
Chunk: 77

Company: NEOGEN CORP
Filing Date: 2025-01-15
Form: 10-Q
Item: Item 8
Chunk 77
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 Chief Financial Officer (“the Certifying Officers”), using the criteria set forth by the Committee of Sponsoring Organizations of the Treadway Commission (COSO) in Internal Control – Integrated Framework (2013). Based on the evaluation, the Certifying Officers concluded that the Company’s disclosure controls and procedures were not effective as of such date due to material weaknesses in internal control over financial reporting, described below. 

Material Weaknesses 

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 our financial statements will not be prevented or detected on a timely basis.  

As a result of management’s assessment of the Company’s internal control over financial reporting, we have concluded that as of November 30, 2024, the Company had deficiencies in the control activities and information and communication components of the COSO Framework that constitute material weaknesses, either individually or in aggregate. 

Control Activities

We did not design, implement, and/or operate effective control activities across substantially all of the Company’s business and financial reporting processes to adequately achieve, complete and accurate financial accounting, reporting, and disclosures based on the criteria established in the COSO Framework and we identified deficiencies in the principles associated with the control activities component of the COSO Framework. The following items contributed to the material weakness in control activities, either individually or in aggregate: 

•Management did not maintain effective controls over period-end invoice accruals that are designed to ensure the completeness and accuracy of accrued expenses and accrued capital assets.  

•Management did not maintain effective management review controls  to adequately support certain assumptions applied in its goodwill valuation analysis.   

Information and Communication

We did not consistently generate or provide adequate 	quality supporting information and communication based on the criteria established in the COSO Framework and we identified deficiencies in the principles associated with the information and communication component of the COSO Framework. The following were contributing factors to the material weakness in information and communication:

•Management did not maintain adequate information technology general controls in the areas of user access and change management over certain information technology systems that support the Company’s financial reporting process.

•Management did not consistently retain information and documentation to adequately support the functions of internal control, including controls over information produced by the entity used in connection with control activities. 

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•Management did not adequately communicate information internally to enable personnel to sufficiently understand internal control responsibilities.

These control deficiencies create a reasonable possibility that a material misstatement to the consolidated financial statements would not be prevented