Item 4. Controls and Procedures
ITEM 4. CONTROLS AND PROCEDURES
Evaluation of Disclosure
Controls and Procedures
We have established disclosure
controls and procedures designed to ensure that information required to be disclosed in the reports that we file or submit under the Exchange
Act is recorded, processed, summarized, and reported within the time periods specified in SEC rules and forms and is accumulated and communicated
to management, including the principal executive officer and principal financial officer, to allow timely decisions regarding required
disclosure.
Our principal executive officer
and principal financial officer, with the assistance of other members of the Company’s management, have evaluated the effectiveness
of the design and operation of our disclosure controls and procedures (as such term is defined in Rules 13a-15(e) and 15d-15(e) under
the Exchange Act) as of the end of the period covered by this quarterly report. Based upon our evaluation, each of our principal executive
officer and principal financial officer has concluded that the Company’s internal control over financial reporting was not effective
as of the end of the period covered by this Quarterly Report on Form 10-Q because the Company has not yet completed its remediation of
the material weakness previously identified and disclosed in the Company’s Annual Report on Form 10-K for the year ended April 30,
2023, the end of its most recent fiscal year.
Specifically, management has
identified the following material weaknesses:
1. we do not have sufficient resources in our accounting function, which
restricts our ability to perform sufficient reviews and approval of manual journal entries posted to the general ledger and to consistently
execute review procedures over general ledger account reconciliations, financial statement preparation and accounting for non-routine
transactions ; and
2. our primary user access controls (i.e., provisioning, de-provisioning,
privileged access and user access reviews) to ensure appropriate authorization and segregation of duties that would adequately restrict
user and privileged access to the financially relevant systems and data to appropriate personnel were not designed and/or implemented
effectively. We did not design and/or implement sufficient controls for program change management to certain financially relevant systems
affecting our processes .
A material weakness is a control
deficiency or combination of control deficiencies that result in more than a remote likelihood that a material misstatement of the annual
or interim financial statements will not be prevented or detected.
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Planned Remediation
We are implementing measures
designed to improve our internal control over financial reporting to remediate material weaknesses, including the following:
· Formalizing our internal control documentation and strengthening supervisory reviews by our management;
and
· Adding additional accounting personnel and segregating duties amongst accounting personnel.
Management continues to work
to improve its controls related to our material weaknesses, specifically relating to user access and change management surrounding our
information technology systems and applications. Management will continue to implement measures to remediate material weaknesses, such
that these controls are designed, implemented, and operating effectively. The remediation actions include: (i) enhancing design and documentation
related to both user access and change management processes and control activities; and (ii) developing and communicating additional policies
and procedures to govern the area of information technology change management. In order to achieve the timely implementation of the above,
management has commenced the following actions and will continue to assess additional opportunities for remediation on an ongoing basis:
· Engaging a third-party specialist to assist management with improving the Company’s overall control
environment, focusing on change management and access controls; and
· Implementing new applications and systems that are aligned with management’s focus on creating strong
internal controls.
We are currently working to
improve and simplify our internal processes and implement enhanced controls, as discussed above, to address the material weaknesses in
our internal control over financial reporting and to remedy the ineffectiveness of our disclosure controls and procedures. These material
weaknesses will not be considered to be remediated until the applicable remediated controls are operating for a sufficient period of time
and management has concluded, through testing, that these controls are operating effectively.
Despite the existence of these
material weaknesses, we believe that the condensed financial statements included in the period covered by this Quarterly Report on Form
10-Q fairly present, in all material respects, our financial condition, results of operations and cash flows for the periods presented
in conformity with U.S. generally accepted accounting principles.
Changes in Internal Control
Except as detailed above,
during the quarter ended January 31, 2024, there was no change in our internal control over financial reporting that materially affected,
or is reasonably likely to materially affect, our internal control over financial reporting.
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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.