Item 4. Controls and Procedures
Item
4. Controls and Procedures
Disclosure
controls and procedures are designed with the objective of ensuring that information required to be disclosed in our reports filed under
the Exchange Act, such as this Report, is recorded, processed, summarized, and reported within the time periods specified in the SEC’s
rules and forms. Disclosure controls and procedures are also designed with the objective of ensuring that such information is accumulated
and communicated to our Management, including our Certifying Officers, as appropriate, to allow timely decisions regarding required disclosure.
Our
management, with the participation of our Chief Executive Officer and Chief Financial Officer, evaluated the effectiveness of the Company’s
disclosure controls and procedures, as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act, as of March 31, 2026. Based on
that evaluation, our Chief Executive Officer and Chief Financial Officer concluded that, as of March 31, 2026, the Company’s disclosure
controls and procedures were not effective due to the material weakness described below.
Management
identified certain control deficiencies, that when aggregated constitute material weaknesses as follows:
1. Segregation
of Duties: Due to operating in a small business environment, we evaluate the cost of implementing
controls relative to their potential benefit. As a result, we may not maintain adequate segregation
of duties to ensure the proper processing, review, and authorization of all transactions,
including non-routine transactions and training activities.
2. Documentation:
We do not have sufficient written documentation of our internal control policies and procedures,
as required by the Sarbanes-Oxley Act, which applies to the Company for the three months
ended March 31, 2026.
3. Accounting
Resources: Our accounting function lacks sufficient resources, which limits our ability to
collect, analyze, and properly review financial information.
A
material weakness is a deficiency, or combination of deficiencies, in internal control over financial reporting, such that there is a
reasonable possibility that a material misstatement of the Company’s annual or interim financial statements will not be prevented
or detected on a timely basis.
In
response to the identified material weaknesses, we have undertaken several initiatives to strengthen our internal controls:
1. Segregation
of Duties: We are reevaluating the allocation of responsibilities within our accounting and
finance functions to improve segregation of duties, including implementing compensating controls
where full segregation is impractical due to our small business environment.
2. Documentation
of Controls: We are developing and formalizing written documentation of our internal control
policies and procedures, in compliance with the requirements of the Sarbanes-Oxley Act.
3. Accounting
Resources: We are augmenting our accounting resources by providing additional training to
current personnel and engaging qualified third-party professionals to support the preparation,
analysis, and review of financial information, particularly in areas involving complex accounting
standards.
These
remediation efforts are ongoing and will require time to fully implement and assess for effectiveness. Although we are committed to strengthening
our internal controls, we cannot guarantee that these measures will entirely eliminate all material weaknesses or that additional issues
will not arise in the future as accounting standards and industry practices continue to evolve.
We
do not expect that our disclosure controls and procedures will prevent all errors and all instances of fraud. Disclosure controls and
procedures, no matter how well conceived and operated, can provide only reasonable, not absolute, assurance that the objectives of the
disclosure controls and procedures are met. Further, the design of disclosure controls and procedures must reflect the fact that there
are resource constraints, and the benefits must be considered relative to their costs. Because of the inherent limitations in all disclosure
controls and procedures, no evaluation of disclosure controls and procedures can provide absolute assurance that we have detected all
our control deficiencies and instances of fraud, if any. The design of disclosure controls and procedures also is based partly on certain
assumptions about the likelihood of future events, and there can be no assurance that any design will succeed in achieving its stated
goals under all potential future conditions.
Changes
in Internal Control over Financial Reporting
Other
than the remediation activities described above, there have been no changes in our internal control over financial reporting during the
quarter ended March 31, 2026 that have materially affected, or are reasonably likely to materially affect, our internal control over
financial reporting.
20
PART
II - OTHER INFORMATION
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