What changed in this filing

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Item 4. Controls and Procedures

2025-05-15 compared with 2024-11-14 · 41 added, 40 removed, 20 unchanged (80% 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.

During the period covered

by this filing, we conducted an evaluation, under the supervision and with the participation of our management, including our Chief Executive

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

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 September 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 weaknesses:

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

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 was required to apply its judgment in evaluating the cost-benefit relationship of possible controls

and procedures.

Our Chief Executive Officer

and Chief Financial Officer have evaluated the effectiveness of the design and operation of our disclosure controls and procedures.

upon the foregoing, our Chief Executive Officer and Chief Financial Officer concluded that, as of March 31, 2025, the disclosure controls

and procedures of our Company were not effective to ensure that the information required to be disclosed in our Exchange Act reports was

recorded, processed, summarized and reported on a timely basis due to material weakness in internal controls as identified below.

As reported in our Annual

Report on Form 10-K for the year ended December 31, 2024, management identified the following material weaknesses:

· Ineffective design and implementation over Information

Technology General Controls (“ITGCs”)

· The Company 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 did not maintain 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.

Many of our reports and reconciliations are performed in Excel spreadsheets, and we did not adequately validate

the segregation of duties between the preparer and the approver with a signature and time stamp

· 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.

As we move forward into 2025, 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.

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.

Many of our reports and reconciliations are performed in Excel spreadsheets, and we did not adequately validate the segregation of duties between the preparer and the approver with a signature and time stamp.

NetSuite has many robust internal control features that can be configured and utilized to ensure workflow approvals are adhered to and integrated into documentation.

Since these controls have

a pervasive effect across the inventory transaction cycle, management has determined that these circumstances constitute a material weakness,

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, 2024.

Additionally, we need to ensure the

employees are adequately trained and able to resolve issues in a timely way.

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

· The Company did not maintain sufficient controls

related to Beam Europe

· The Company did not complete a Sarbanes-Oxley

(SOX) Section 404A assessment

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 September

During the three months ended March

31, 2025, the Company has taken various actions to strengthen our internal control over financial reporting, including:

11 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