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Management’s Evaluation of our Disclosure Controls and Procedures
−Removed: We maintain disclosure controls and procedures that are designed to ensure that information required to be disclosed in the reports that we file or submit under the Securities Exchange Act of 1934, as amended, or the Exchange Act, is (1) recorded, processed, summarized, and reported within the time periods specified in the SEC's rules and forms and (2) accumulated and communicated to our management, including our principal executive officer and principal financial officer, to allow timely decisions regarding required disclosure.
−Removed: As of June 30, 2022, our management, with the participation of our principal executive officer and principal financial officer, evaluated the effectiveness of our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act).
+Added: We maintain disclosure controls and procedures that are designed to ensure that information required to be disclosed in the reports that we file or submit under the Securities Exchange Act of 1934, as amended, or the Exchange Act, is (1) recorded, processed, summarized, and reported within the time periods specified in the SEC's rules and forms and (2) accumulated and
+Added: communicated to our management, including our principal executive officer and principal financial officer, to allow timely decisions regarding required disclosure.
+Added: As of September 30, 2022, our management, with the participation of our principal executive officer and principal financial officer, evaluated the effectiveness of our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act).
Our management recognizes that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving their objectives, and management necessarily applies its judgment in evaluating the cost-benefit relationship of possible controls and procedures.
−Removed: Based on our evaluation, our management concluded that, as of June 30, 2022, our disclosure controls and procedures were not effective because our internal control over financial reporting was not adequate due to the material weakness described below.
+Added: Based on our evaluation, our management concluded that, as of September 30, 2022, our disclosure controls and procedures were not effective because our internal control over financial reporting was not adequate due to the material weakness described below.
As reported in our 2021 Annual Report on Form 10-K, our internal control over financial reporting as of December 31, 2021 was not effective due to the following material weakness:
the Company did not design and maintain effective controls over the completeness, accuracy, existence and presentation and disclosure of inventory.
−Removed: 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
−Removed: misstatement of a company’s annual or interim consolidated financial statements will not be prevented or detected on a timely basis.
+Added: 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 a company’s annual or interim consolidated financial statements will not be prevented or detected on a timely basis.
Specifically, we did not maintain effective controls related to (i) the review of inventory reconciliations, (ii) the validation of the inventory costing, (iii) the periodic assessment of excess and obsolete inventory related reserves and (iv) verification that the existence of all inventories subject to physical inventory counts were correctly counted as of December 31, 2021.
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Until the controls have been operating for a sufficient period of time and management has concluded, through testing, that these controls are operating effectively, the material weakness described above will continue to exist.
−Removed: As such, management has concluded that the material weakness cannot be considered remediated as of June 30, 2022.
+Added: As such, management has concluded that the material weakness cannot be considered remediated as of September 30, 2022.
Changes in Internal Control over Financial Reporting
−Removed: During the six months ended June 30, 2022, we implemented certain internal controls in connection with our remediation efforts described above.
+Added: During the nine months ended September 30, 2022, we implemented certain internal controls in connection with our remediation efforts described above.
There have been no other changes in our internal control over financial reporting, as such term is defined in Rules 13a-15(f) and 15d-15(f) promulgated under the Exchange Act, during our most recently completed fiscal quarter that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.
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Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.