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Evaluation of Disclosure Controls and Procedures
−Removed: In designing and evaluating the disclosure controls and procedures and internal control over financial reporting, management recognizes that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving the desired control objectives.
−Removed: In addition, the design of disclosure controls and procedures and internal control over financial reporting must reflect the fact that there are resource constraints, and that management is required to apply judgment in evaluating the benefits of possible controls and procedures relative to their costs.
−Removed: The Company’s management, with the participation of the Company’s Chief Executive Officer (its principal executive officer) and Chief Financial Officer (its principal financial officer), have evaluated the effectiveness of the Company’s disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act) as of September 30, 2024.
−Removed: Based on that evaluation, the Company’s Chief Executive Officer and Chief Financial Officer have concluded that as of and for the period ended September 30, 2024, due to the existence of the material weaknesses in the Company’s internal control over financial reporting described below, the Company’s disclosure controls and procedures were not effective.
+Added: The Company’s management, with the participation of the Company’s Chief Executive Officer (its principal executive officer) and Chief Financial Officer (its principal financial officer), have evaluated the effectiveness of the Company’s disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act) as of March 31, 2025.
+Added: Based on that evaluation, the Company’s Chief Executive Officer and Chief Financial Officer have concluded that as of and for the period ended March 31, 2025, our disclosure controls and procedures were effective to provide assurance at a reasonable level that the information we are required to disclose in 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 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 disclosures.
Our senior management is responsible for establishing and maintaining adequate internal control over financial reporting.
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Under the supervision and with the participation of management, including the Chief Executive Officer and Chief Financial Officer, we conducted an evaluation of the effectiveness of our internal control over financial reporting based on the framework in “Internal Control — Integrated Framework (2013)” issued by the Committee of Sponsoring Organizations of the Treadway Commission ("COSO").
−Removed: As the Company integrates the operations acquired through the Big Village Acquisition, there is a risk of identifying deficiencies in our overall internal controls.
−Removed: Our focus is on implementing and maintaining effective financial management systems and internal controls, on an ongoing process.
−Removed: However, given that all such controls are not yet fully operational, management has concluded that a material weakness existed in the Company’s internal controls over financial reporting, rendering them ineffective at December 31, 2023.
−Removed: As set forth below, management will take steps to remediate the material weaknesses identified below.
−Removed: Notwithstanding the material weaknesses described below, we have performed additional analyses and other procedures to enable management to conclude that our consolidated financial statements included in this Quarterly Report on Form 10-Q fairly present, in all material respects, our financial condition and results of operations as of and for the quarter ended September 30, 2024.
−Removed: Outlined below are the material weaknesses identified by management, along with the remedial actions planned.
−Removed: Material Weaknesses
−Removed: A material weakness is a deficiency, or a combination of deficiencies, in internal controls over financial reporting, such that there is a reasonable possibility that a material misstatement of the Company’s annual or interim financial statements will not be prevented or detected on a timely basis.
−Removed: As of December 31, 2023, management identified certain material weaknesses.
−Removed: As the Company continues to integrate the operations assumed as part of the Big Village Acquisition, we have identified deficiencies in our overall internal controls, specifically as identified below:
−Removed: • Inadequate controls related to revenue recognition, cost of revenue, and the accounts payable and accrual process leading to potential omission or misstatement of material transactions impacting financial statements;
+Added: As the Company continues to improve its accounting staff and processes, internal controls are at the forefront of our efforts to produce accurate and complete financial statements.
+Added: The Company has provided standard operating procedures to ensure each process is both functioning and performed correctly.
+Added: This allows for documented updates and improvements.
+Added: The implementation of the month end close software also elevated our internal controls and documentation.
+Added: Management does recognize that without updated systems, the manual processes will allow for possible material weaknesses in the future.
+Added: Notwithstanding the significant deficiencies described below, based on the Company's continued improvements in its accounting staff and processes described above, the Company's Chief Executive Officer and Chief Financial Officer evaluated our internal controls and concluded that as of and for the quarter ended March 31, 2025, they were effective, and that our consolidated financial statements included in this Quarterly Report on Form 10-Q fairly represent, in all material respects, our financial condition and results of operations as of and for the quarter ended March 31, 2025.
+Added: Outlined below are the significant deficiencies identified by management, along with the remedial actions planned.
+Added: Significant Deficiency
+Added: A significant deficiency or a combination of deficiencies in internal control over financial reporting is less severe than a material weakness, yet important enough to merit attention by those responsible for oversight of the Company’s financial reporting.
+Added: The presence of such a deficiency does not mean that a material misstatement has occurred, but it indicates the possibility of such an occurrence in the future.
+Added: As the Company continues to update and integrate its accounting and project systems, we have identified deficiencies in our overall internal controls, specifically as identified below:
+Added: • Inadequate controls related to revenue recognition and cost of revenue processes leading to the possibility of the misstatement of material transactions impacting financial statements.
• Ineffectiveness of the Company’s information technology systems and controls concerning financial information.
+Added: • Inadequate controls related to share cancellation processes leading to the possibility of misstatement of transactions impacting financial statements.
To address these weaknesses, the Company has initiated a remediation plan comprising the following measures:
−Removed: • Updating the information technology general controls ("ITGC") risk assessment to incorporate operations from the Big Village Acquisition;
+Added: • Updating the information technology general controls ("ITGC") risk assessment to ensure reliability, integrity, security, and confidentiality of the Company’s infrastructure and data.
• Examination of information technology systems to ascertain necessary updates to support the financial reporting process.
−Removed: • Collaboration with a third-party company to ensure SOX compliance, establish and document controls related to revenue recognition, accounts payable, and other processes to enhance internal controls over financial reporting;
−Removed: • Expansion of our finance department through the hiring of certified public accountants with prior auditing experience, knowledge of SEC filings and technical issues.
−Removed: In the year ended December 31, 2023, two additional certified public accountants were onboarded, tasked with month end close oversights and SEC reporting.
−Removed: We believe this will strengthen our finance department as we work towards developing strong internal controls and providing guidance beyond the finance functions to senior management to support our financial reporting process.
−Removed: We will continue to monitor and evaluate the effectiveness of our internal controls over financial reporting on an ongoing basis and are committed to taking further action and implementing additional enhancements or improvements, as necessary and as funds allow.
+Added: • Implementing the compliance option in Floqast to identify and document key controls.
+Added: This will create a key control matrix to establish and document controls related to revenue recognition, cost of sales, equity, and other processes to enhance internal controls over financial reporting.
+Added: • In the year ended December 31, 2024, the accounting and finance department improved with the hiring of an experienced operational Controller and Accounting Manager as well as the VP of Finance.
+Added: These positions complement and collaborate with the existing SEC Reporting Manager.
+Added: We believe this will strengthen our department as we work towards strong internal controls and provide guidance beyond the finance functions for those we rely on to provide information to support our financial reporting process.
+Added: We will continue to monitor and evaluate the effectiveness of our internal controls over financial reporting on an ongoing basis and are committed to taking further action and implementing additional enhancements or improvements, as necessary.
Changes in Internal Control over Financial Reporting
−Removed: Other than the matters set forth above, there were no changes in our internal control over financial reporting identified in management’s evaluation pursuant to Rules 13a-15(d) or 15d-15(d) of the Exchange Act during the quarter ended September 30, 2024 that materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.
+Added: Other than the matters set forth above, there were no changes in our internal control over financial reporting identified in management’s evaluation pursuant to Rules 13a-15(d) or 15d-15(d) of the Exchange Act during the quarter ended March 31, 2025 that materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.
PART II – OTH ER INFORMATION
Legal Proc eedings.
−Removed: For a description of developments to legal proceedings during the nine months ended September 30, 2024, see “Litigation” under Note 17, “Commitments and Contingencies” to our consolidated financial statements.
+Added: For a description of developments to legal proceedings during the three months ended March 31, 2025, see “Litigation” under Note 16, Commitments and Contingencies, to our consolidated financial statements.
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.