What changed in this filing

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Item 4. Controls and Procedures

2024-08-13 compared with 2024-05-20 · 28 added, 42 removed, 32 unchanged (69% of the section changed)

16 unchanged sentences

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

Amiga is a small business and represents less than 10.0% of our 2024 revenues and 10.7% of our 2024 net loss.

There was no material change

to its internal control over financial reporting due to the acquisition.

Based upon our evaluation, our Chief Executive Officer and Chief

Financial Officer concluded that, identified as of March 31, 2024, 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.

The following material weakness

Based upon our evaluation, of our disclosure controls and procedures, our Chief Executive Officer and Chief Financial Officer concluded

that our disclosure controls and procedures were not effective as of June 30, 2024 due to the material weaknesses in our internal controls

over financial reporting described below.

In light of this fact, our management has performed additional analyses, reconciliations and

other post-closing procedures and has concluded that, notwithstanding the material weaknesses in our internal control over financial reporting,

the consolidated financial statements for the periods covered by and included in this Quarterly Report fairly present, in all material

respects, our financial position, results of operations and cash flows for the periods presented in conformity with generally accepted

accounting principles.

The following material weaknesses

existed as of December 31, 2023:

Material weakness:

The Company has a material weakness that was previously identified, that has not yet been completely remediated.

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.

This includes a manual process for completing an allocation of labor and overhead to our products on a timely basis.

The Company implemented a NetSuite ERP system in Q4 2023 which we believe will remedy this deficiency.

The NetSuite ERP system is continually undergoing additional configuration to effectively remediate the internal control weakness when fully implemented.

During Q4 2023, the Company implemented NetSuite

ERP system to automate operations and accounting for the San Diego and Chicago locations.

We did not implement program change management

and user access controls to ensure that:

IT program and data changes affecting the Company’s financial IT applications & underlying accounting records are identified,

tested, authorized, and implemented appropriately, and

Material weaknesses:

During Q4 2023, the Company implemented NetSuite ERP system to automate operations and accounting for the San Diego and Chicago locations.

We did not implement program change management and user access controls to ensure that:

IT program and data changes affecting the Company’s financial IT applications & underlying accounting records are identified, tested, authorized, and implemented appropriately, and

Appropriate segregation of duties that would adequately restrict user access and ensure adequate review of transactions.

Because we are a small company, many employees

have multiple job responsibilities, and during the implementation in Q4, access was allowed for employees to access necessary tasks.

Because we are a small company, many employees have multiple job responsibilities, and during the implementation in Q4, access was allowed for employees to access necessary tasks.

As we move forward into 2024, we will assign access to ensure the proper segregation of duties.

Additionally, we need to ensure the employees

are adequately trained and able to resolve issues timely.

The Company needs to establish appropriate procedures for change management

to ensure changes to the system are formally approved, properly restricted to appropriate personnel, and adequately tested.

Additionally, we need to ensure the employees are adequately trained and able to resolve issues timely.

The Company needs to establish appropriate procedures for change management to ensure changes to the system are formally approved, properly restricted to appropriate personnel, and adequately tested.

In our review, we noted that the Company did not implement adequate controls relating to documentation of the review and approval of reconciliations and other schedules prepared internally to be included or disclosed in the financial statements.

4 unchanged sentences

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 March 31, 2024.

maintain effective internal control over financial reporting as of June 30, 2024.

Changes in Internal Control Over Financial Reporting

2 unchanged sentences

additional measures to remediate the underlying causes that give rise to the material weaknesses.

During the three months ended March

During the three months ended June 30,

2024, the Company has taken various actions to strengthen our internal control over financial reporting, including:

· Reviewing access in NetSuite ERP to ensure the proper segregation of duties and training courses to ensure

the employees are adequately trained and able to resolve issues timely.

· Implementing stronger processes related to ordering, counting, warehousing, valuing and transacting our

inventory in NetSuite ERP.

· Increasing the adequacy of staffing levels and expertise with the requisite technical knowledge and skills

to support further enhancement on the controls and procedures surrounding documentation of review and formalization of reconciliations,

accounting policies and controls.

· Implementing a segregation of duties between the preparer and the approver of reconciliation and supporting

schedules which included hiring additional staff.

The material weaknesses will be considered remediated

when management concludes that, through testing, the applicable remedial controls are designed, implemented and operating effectively.

As management continues to evaluate and improve disclosure controls and procedures and internal control over financial reporting, the

Company may decide to take additional measures to address control deficiencies or determine to modify, or in appropriate circumstances

not to complete, certain of the remediation measures identified.

Continue to review access in NetSuite ERP to ensure the proper segregation of duties and additional training courses to ensure the employees are trained and able to resolve issues timely.

Managed processes related to ordering, counting, warehousing, valuing and transacting our inventory in NetSuite ERP.

Increasing and monitoring the adequacy of staffing levels and expertise with the requisite technical knowledge and skills to support continued enhancement on the controls and procedures surrounding documentation of review and formalization of reconciliations, accounting policies and controls.

Continue to manage a segregation of duties between the preparer and the approver of reconciliation and supporting schedules which included hiring additional staff.

The material weaknesses will

be considered remediated when management concludes that, through testing, the applicable remedial controls are designed, implemented and

operating effectively.

As management continues to evaluate and improve disclosure controls and procedures and internal control over financial

reporting, the Company may decide to take additional measures to address control deficiencies or determine to modify, or in appropriate

circumstances not to complete, certain of the remediation measures identified.

OTHER INFORMATION

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