Item 4. Controls and Procedures
ITEM 4. CONTROLS AND PROCEDURES.
Evaluation of Disclosure Controls and Procedures
We maintain “disclosure controls and procedures,”
as such term is defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act, that are designed to ensure information required to be
disclosed in our reports that we file or furnish pursuant to the Exchange Act is recorded, processed, summarized, and reported within
the time periods specified in the SEC’s rules and forms, and that such information is accumulated and communicated to our management,
including our Chief Executive Officer (our principal executive officer) and Chief Financial Officer (our principal financial officer),
as appropriate to allow for timely decisions regarding required disclosure. Our management, with the participation of our Chief Executive
Officer and Chief Financial Officer, has evaluated the effectiveness of our disclosure controls and procedures as of March 31, 2026. Based
on such evaluation, our Chief Executive Officer and Chief Financial Officer have concluded that, as of such date, our disclosure controls
and procedures were not effective at a reasonable assurance level due to the material weaknesses described below. Notwithstanding the
identified material weaknesses, management, including our Chief Executive Officer and Chief Financial Officer, believes the consolidated
financial statements included in this report fairly represent, in all material respects, our financial condition, results of operations
and cash flows as of and for the periods presented in accordance with GAAP.
Changes in Internal Control Over Financial Reporting
In preparing our financial statements as of and
for the three months ended March 31, 2026, management identified material weaknesses in our internal control over financial reporting.
The material weaknesses we identified related to (1) the lack of a sufficient number of trained professionals with the expertise to design,
implement, and execute a formal risk assessment process and formal accounting policies, procedures, and controls over accounting and financial
reporting to ensure the timely and accurate recording of financial transactions while maintaining a segregation of duties; and (2) the
lack of a sufficient number of trained professionals with the appropriate GAAP technical expertise to identify, evaluate, and account
for complex transactions and review valuation reports prepared by external specialists.
As disclosed in the Annual Report, our management
has identified the steps necessary to address the material weaknesses, and in the first quarter of fiscal year 2026, we continued to implement
the following remedial procedures. We are planning on implementing measures designed to improve our internal control over financial
reporting to remediate these material weaknesses, including formalizing our processes and internal control documentation and strengthening
supervisory reviews by our financial management and hiring additional qualified accounting and finance personnel and engaging financial
consultants to enable the implementation of internal control over financial reporting and segregating duties amongst accounting and finance
personnel.
While we are implementing these measures, we cannot
assure you that these efforts will remediate our material weaknesses and significant deficiencies in a timely manner, or at all, or prevent
restatements of our financial statements in the future. If we are unable to successfully remediate our material weaknesses, or identify
any future significant deficiencies or material weaknesses, the accuracy and timing of our financial reporting may be adversely affected,
we may be unable to maintain compliance with securities law requirements regarding timely filing of periodic reports, and the market price
of our common stock may decline as a result.
In accordance with the provisions of the JOBS
Act, we and our independent registered public accounting firm were not required to, and did not, perform an evaluation of our internal
control over financial reporting as of March 31, 2026. Accordingly, we cannot assure you that we have identified all, or that we will
not in the future have additional material weaknesses. Material weaknesses may still exist when we report on the effectiveness of our
internal control over financial reporting as required under Section 404 of the Sarbanes-Oxley Act.
Inherent Limitations on Effectiveness of
Controls
Our management does not expect that our disclosure
controls and procedures or our internal control over financial reporting will prevent all errors and all fraud. Our management recognizes
that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving the desired
control objectives, and management necessarily is required to apply its judgment in evaluating the cost-benefit relationship of possible
controls and procedures. Further, the design of a control system must reflect the fact that there are resource constraints, and the benefits
of controls must be considered relative to their costs. Because of the inherent limitations in all control systems, no evaluation of controls
can provide absolute assurance that all control issues and instances of fraud, if any, have been detected. These inherent limitations
include the realities that judgments in decision-making can be faulty, and that breakdowns can occur because of a simple error or mistake.
Additionally, controls can be circumvented by the individual acts of some persons, by collusion of two or more people, or by management
override of the controls. The design of any system of controls is also based in part upon 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;
over time, controls may become inadequate because of changes in conditions, or the degree of compliance with policies or procedures may
deteriorate. Due to inherent limitations in a cost-effective control system, misstatements due to error or fraud may occur and not be
detected.
9
PART II
OTHER INFORMATION
Text extracted from the filing as submitted to EDGAR. Formatting, tables and exhibits are simplified for reading; the original document is authoritative for anything you rely on.