{"url_path":"/sec/genc/10-q/2026/item-4","section_key":"item-4","section_title":"Item 4 Controls and Procedures","topic":"sec","document":{"doc_type":"10-Q","doc_date":"2026-06-12","source_url":"https://www.sec.gov/Archives/edgar/data/64472/0001193125-26-269656-index.html","accession_number":"0001193125-26-269656","cik":"0000064472","ticker":"GENC","issuer_name":"GENCOR INDUSTRIES INC","edgar_url":"https://www.sec.gov/Archives/edgar/data/64472/0001193125-26-269656-index.html","primary_entity_key":"0000064472","primary_entity_name":"GENCOR INDUSTRIES INC"},"word_count":708,"has_tables":true,"body_markdown":"Item 4. Controls and Procedures\n\nEvaluation of Disclosure Controls and Procedures\n\nThe Company’s President and Chairman of the Board (Principal Executive Officer) and Chief Financial Officer (Principal Financial and Accounting Officer) evaluated the effectiveness of the design and operation of the Company’s “disclosure controls and procedures” (as defined in Rule 13a-15(e) under the Exchange Act) pursuant to Exchange Act Rule 13a-15(b) as of the end of the period covered by this Quarterly Report (March 31, 2026). Based upon that evaluation, the President and the Chief Financial Officer concluded that, as of the end of the period covered by this Quarterly Report, the Company’s disclosure controls and procedures were not effective at the reasonable assurance level solely as a result of the material weaknesses management identified in our internal control over financial reporting, as described in our Annual Report on Form 10-K for the year ended September 30, 2025.\n\nBecause of inherent limitations, the Company’s disclosure controls and procedures, no matter how well designed and operated, can provide only reasonable, and not absolute, assurance that the objectives of such disclosure controls and procedures are met, and no evaluation can provide absolute assurance that all control issues and instances of fraud, if any, within the Company have been detected.\n\n \n\n21\n\nMaterial Weaknesses in Internal Control over Financial Reporting\n\nAs previously reported in our Annual Report on Form 10-K for the year ended September 30, 2025, management identified the following material weaknesses in internal control over financial reporting as of September 30, 2025, which were not remediated as of March 31, 2026:\n\n \n\n \n•\n \n\nIneffective information technology general controls (ITGCs), particularly as such controls related to user access, program change management, and ineffective complementary user-organization controls, which limited management’s ability to rely on technology-dependent controls relevant to the preparation of the Company’s condensed consolidated financial statements. As a result, information technology-dependent manual and automated controls that rely on the affected ITGCs were also ineffective. The information from the information technology systems with affected ITGCs and the period end close process, including the review and approval process of journal entries, account reconciliations and segregation of duties were also ineffective.\n\n \n\n \n•\n \n\nInadequate risk assessment, control activities, information and communication, and monitoring components of the Company’s internal control framework such that internal control weaknesses were not detected, communicated, addressed with mitigating control activities, or remediated on a timely basis.\n\nManagement’s Plan of Remediation of Material Weaknesses\n\nManagement, with oversight by our Audit Committee, is actively engaged in the planning for, and implementation of remediation efforts to address the ongoing material weaknesses described above and to improve our internal control over financial reporting.\n\nTo address the material weaknesses described above, the Company has implemented new and enhanced controls designed to ensure that access to information technology applications and data are adequately restricted to appropriate personnel, ensure segregation of duties, and appropriately monitor the activities of the individuals with access to modify data. We believe the actions described above will be sufficient to remediate the identified material weaknesses and strengthen our internal control over financial reporting. However, the new and enhanced controls have not operated for a sufficient period of time to conclude that the material weaknesses have been remediated. Management and our Audit Committee will continue to monitor these specific remedial measures and the effectiveness of these controls on our overall control environment and will make any further changes management determines to be appropriate. We can provide no assurance as to when the remediation of these material weaknesses will be completed.\n\nChanges in Internal Control over Financial Reporting\n\nThe Company’s management, including the President and Chief Financial Officer, has reviewed the Company’s internal control over financial reporting. Except for the changes in the internal controls designed to remediate material weaknesses and other changes as part of our plans to improve our internal controls over financial reporting as discussed above, there were no changes in the Company’s internal control over financial reporting during the three months ended March 31, 2026 that materially affected, or are reasonably likely to materially affect, the Company’s internal control over financial reporting. However, as noted above, we will be continuing to implement changes to our internal control over financial reporting to address the material weaknesses described above.\n\n \n\n22\n\nPart II. Other Information"}