What changed in this filing

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Item 4. Controls and Procedures

2023-05-15 compared with 2022-11-10 · 32 added, 34 removed, 19 unchanged (78% of the section changed)

2 unchanged sentences

Our management is responsible

for establishing and maintaining adequate internal controls over financial reporting, as such term is defined in Exchange Act Rule 13a-15(f).

The design of any system of controls is 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, regardless of how remote.

All internal control systems, no matter how well designed, have inherent limitations.

Because of its inherent limitations, internal control

over financial reporting may not prevent or detect misstatements.

Projections of any evaluation of effectiveness to future periods are

subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies

or procedures may deteriorate.

Therefore, even those systems determined to be effective can provide only reasonable assurance with respect

to financial statement preparation and presentation.

for establishing and maintaining disclosure controls and procedures that are designed to ensure that information required to be disclosed

in our reports under the Securities Exchange Act of 1934 (the “Exchange Act”) is recorded, processed, summarized and reported

within the time periods specified in the rules and forms of the Securities and Exchange Commission (the “SEC”), and that such

information is accumulated and communicated to our management, including our Chief Executive Officer and Chief Financial Officer, as appropriate,

to allow timely decisions regarding required disclosure based closely on the definition of “disclosure controls and procedures”

in Rule 15d-15(e) under the Exchange Act.

In designing and evaluating the disclosure controls and procedures, management recognized 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 was required to apply its judgment in evaluating the cost-benefit relationship of possible

controls and procedures.

During the period covered

1 unchanged sentence

Officer and Chief Financial Officer, of the effectiveness of the design and operation of our internal controls over financial reporting.

Based upon the foregoing, our Chief Executive Officer and Chief Financial Officer concluded that, as of September 30, 2022, we do not

yet have sufficient internal controls over financial reporting and procedures to ensure that all the information required to be disclosed

in our Exchange Act reports was recorded, processed, summarized and reported on a timely basis.

Based upon the foregoing, our Chief Executive Officer and Chief Financial Officer concluded that, as of March 31, 2023, we do not have

sufficient internal controls over financial reporting and procedures to ensure that all the information required to be disclosed in our

Exchange Act reports was recorded, processed, summarized and reported on a timely basis.

We identified the following

material weakness which existed as of December 31, 2022:

The Company currently does not have sufficient controls in place to ensure that all inventory is appropriately tracked and recorded on a timely basis, given the lack of an automated tracking system and the manual nature of its current processes and controls surrounding inventory.

The Company performs manual processes during the year to track and control inventory transactions, apply labor and overheads to inventory and to perform a wall-to-wall physical inventory at the end of the year to confirm the ending inventory balance and valuation.

While these processes provide good results in determining inventory and cost of sales transactions, as we grow, it has become a very time-consuming process and could impact our ability to submit timely reporting.

A manufacturing system will also provide better management tools to analyze and plan production.

This will avoid over-purchasing or shortages of inventory.

We plan to implement a manufacturing and purchasing system in early fiscal 2023.

In addition, we identified the following material weakness

at March 31, 2022:

With regard to a business combination that was completed during the quarter ended March 31, 2022, we identified that the controls over the review of the business combination were not designed effectively such that a material error in the calculation of the purchase price was not detected in a timely manner.

currently does not have sufficient controls in place to ensure that all inventory is appropriately tracked and recorded on a timely basis,

given the lack of an automated tracking system and the manual nature of its current processes and controls surrounding inventory.

The Company performs manual processes during the year to track and control

inventory transactions, apply labor and overheads to inventory and to perform a wall-to-wall physical inventory at the end of the year

to confirm the ending inventory balance and valuation.

While these processes provide good results in determining inventory and cost of

sales transactions, as we grow, it has become a very time-consuming process and could impact our ability to submit timely reporting.

manual controls improved significantly in 2022 at our San Diego location, we determined we had similar issues with manufacturing systems

at our Chicago facility that was added in 2022 as a result of the All Cell acquisition.

A manufacturing system will provide automated

processes, better controls, and improved management tools to analyze and plan production.

This will avoid over-purchasing or shortages

of inventory.

Since these controls have

1 unchanged sentence

based on the criteria established in the “Internal Integrated Framework” issued by COSO in 2013 and as a result, we did not

maintain effective internal control over financial reporting as of September 30, 2022.

maintain effective internal control over financial reporting as of March 31, 2023.

Changes in Internal Control Over Financial Reporting

During the three months ended

September 30, 2022, we continued to implement stronger processes related to ordering, counting, warehousing, valuing and transacting our

We are evaluating enterprise resource planning (ERP) systems to replace our existing QuickBooks system.

In addition, we evaluated

the internal controls of All Cell and rolled out processes and procedures to this new acquisition which was acquired during the nine months

ended September 30, 2022.

During the quarters ended

June 30 and September 30, 2022, the Company implemented a review control over third-party valuation reports, which include formalized

review procedures and enhanced communications with third-party experts.

We believe that these controls will address the material weakness

identified in the quarter ended March 31, 2022.

March 31, 2023, we began to implement stronger processes related to ordering, counting, warehousing, valuing and transacting our inventory

at our energy storage facility in Broadview, IL.

We also have begun the implementation of a new enterprise resource planning (ERP) system

to replace our existing QuickBooks system.

The implementation of the new ERP is scheduled for completion in July 2023.

OTHER INFORMATION

5 unchanged sentences

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.

What changed 10-Q

Item 4. Controls and Procedures