Item 4. Controls and Procedures
ITEM 4. CONTROLS AND PROCEDURES.
Evaluation of Disclosure Controls and Procedures
As required by Rules 13a-15(b) and 15d-15(b) of the Exchange Act, we have evaluated, under the supervision and with the participation of our management, including the principal executive officer and principal financial officer of the Company, the effectiveness of the design and operation of our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) of the Exchange Act) as of the end of the period covered by this quarterly report. Our disclosure controls and procedures are designed to provide reasonable assurance that the information required to be disclosed by us in reports that we file under the Exchange Act is accumulated and communicated to our management, including the principal executive officer and principal financial officer of the Company, as appropriate, to allow timely decisions regarding required disclosure, and is recorded, processed, summarized and reported within the time periods specified in the rules and forms of the SEC. As previously disclosed in Item 9A of our Annual Report on Form 10‑K for the year ended December 31, 2025, management identified a material weakness in internal control over financial reporting related to the Company’s lack of appropriate control processes and activities to sufficiently mitigate for changes in personnel with the necessary technical and accounting knowledge, experience, and training. Because of this material weakness, our disclosure controls and procedures were not effective as of March 31, 2026.
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The control deficiency has not resulted in a material error or misstatements to our financial statements or the need to revise any previously published financial results. However, the control deficiency could have resulted in a misstatement of one or more account balances or disclosures that would result in a material misstatement to the annual or interim consolidated financial statements that would not be prevented or detected, and accordingly, we determined that the control deficiency constitutes a material weakness.
Notwithstanding this material weakness, our management concluded that our unaudited consolidated financial statements included in Part I, Item 1 of this quarterly report on Form 10-Q fairly present, in all material respects, our financial condition, results of operations and cash flows as of and for the periods presented in conformity with accounting principles generally accepted in the United States.
Our management is committed to maintaining a strong internal control environment. In response to the identified material weakness above, management, with the oversight of the audit committee of the board of directors of the Company, is taking comprehensive actions to remediate the above material weakness. Our remediation plans include the following:
● Strengthening documentation for management’s interpretation of technical accounting treatment; and
● Enhancing training and providing additional support for all participants in the accounting processes.
We may also conclude that additional measures may be required to remediate the material weakness in our internal control over financial reporting, which may necessitate additional implementation and evaluation time. We will continue to assess the effectiveness of our internal control over financial reporting and take steps to remediate the material weakness expeditiously. The material weakness will not be considered remediated until the applicable remediated controls operate for a sufficient period of time and management has concluded, through testing, that these controls are operating effectively. These remediation efforts are ongoing, and the material weakness has not yet been fully remediated as of March 31, 2026.
Change in Internal Control Over Financial Reporting
No changes in our internal control over financial reporting occurred during the most recent quarter that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting, with the exception of the remediation efforts related to the material weakness discussed above.
The certifications required by Section 302 of the Sarbanes-Oxley Act of 2002 are filed as Exhibits 31.1 and 31.2, respectively, to this quarterly report.
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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.