Company: FWRG
Filing Date: 2025-03-11
Form Type: 10-K
Source: 0001789940-25-000010
Chunk: 21

Company: First Watch Restaurant Group, Inc.
Filing Date: 2025-03-11
Form: 10-K
Item: Item 9A
Chunk 21
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 and information technology leadership with public company experience to enhance public company financial reporting, technical accounting, and information technology services and solutions.

•Augmented financial reporting capabilities by staffing professionals with knowledge and experience in income tax, internal audit, information technology, and legal.

•Established various policies, including a formal delegation of authority policy defining the protocols for reviewing and authorizing commitments, contracts, invoices, and transactions as well as an account reconciliation policy that provides the framework to ensure the performance of consistent procedures in reconciling general ledger balances to supporting documentation.

•Formalized certain roles and reviewed responsibilities, including ensuring appropriate segregation of duties.

•Designed and implemented period-end financial reporting controls, such as controls over the preparation and review of account reconciliations, financial statement disclosures, and the consolidated financial statements, including controls around classification of cash flows and disclosure of noncash items, as well as establishing a formal management Disclosure Committee to review the draft financial statements and disclosures prior to release, including a sub-certification process from various functional groups. 

•Enhanced access restrictions for certain users over general ledger journal entries and designed new processes to further automate journal entries and segregate journal entry creation from journal entry approval authority.  

While the material weaknesses have not been remediated as of December 29, 2024, Management is devoting substantial resources to the ongoing remediation efforts. As we continue to evaluate and work to improve our internal control over financial reporting, we may take additional measures to address control deficiencies, or we may modify certain of the remediation measures described above. The material weaknesses will not be considered remediated until the applicable controls operate for a sufficient period of time and Management has concluded, through testing, that these controls are designed and operating effectively.

Remediation of Previously Identified Material Weakness 

As previously disclosed in our December 31, 2023 Annual Report on Form 10-K, Management identified a material weakness in accounting for income taxes related to the recording of deferred income taxes and the assessment of the realization of deferred tax assets.

The Company completed the following measures to remediate the previously identified material weakness related to accounting for income taxes:

•Staffed our internal tax department with the appropriate tax technical and public company expertise in accounting for income taxes.

•Designed and implemented key controls, and enhanced the design of existing controls, for the interim and year-end income tax provision processes.

•Increased the frequency of detailed income tax provision reviews from annually to quarterly. 

•Enhanced the process for sourcing and validating data used in the preparation of the provision for income