Item 4. Controls and Procedures
Item
4. Controls and Procedures
Evaluation
of Disclosure Controls and Procedures
We
maintain disclosure controls and procedures (as that term is defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange
Act of 1934, as amended (the “Exchange Act”)) that are designed to ensure that information required to be disclosed
in our reports under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the
SEC’s rules and forms, and that such information is accumulated and communicated to our management, including our principal
executive officer and principal financial officer, as appropriate, to allow timely decisions regarding required disclosures. In
designing disclosure controls and procedures, our management necessarily was required to apply its judgment in evaluating the
cost-benefit relationship of possible disclosure controls and procedures. The design of any disclosure controls and procedures
also 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. Any controls and procedures, no matter how well
designed and operated, can provide only reasonable, not absolute, assurance of achieving the desired control objectives.
Under
the supervision and with the participation of our management, including our principal executive officer, who is also our principal
financial officer, we are required to perform an evaluation of our disclosure controls and procedures, as such term is defined
in Rule 13a-15(e) under the Exchange Act, as of September 30, 2020. Management has not completed such evaluation and, as such,
has concluded that our disclosure controls and procedures were not effective to provide reasonable assurance that information
required to be disclosed by us in reports we file or submit under the Exchange Act is recorded, processed, summarized and reported
within the time periods specified in the SEC’s rules and forms, and is accumulated and communicated to our management, including
our principal executive officer, who is also our principal financial officer, as appropriate to allow timely decisions regarding
required disclosures. As a result of the material weakness in internal controls over financial reporting described below, we concluded
that our disclosure controls and procedures as of September 30, 2020 were not effective.
Management’s
Annual Report on Internal Control Over Financial Reporting
Management
and the Company’s consolidated subsidiaries are responsible for establishing and maintaining adequate internal control over
financial reporting. The Company’s internal control over financial reporting is a process designed under the supervision
of its principal executive and principal financial officer and effected by the Company’s Board of Directors, management
and other personnel, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of its
unaudited condensed consolidated financial statements for external reporting purposes in accordance with GAAP.
Because
of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. In addition, 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.
Material
Weaknesses in Internal Control over Financial Reporting
Management
assessed the effectiveness of the Company’s internal control over financial reporting as of September 30, 2020 based on
the framework established in Internal Control—Integrated Framework (2013) issued by the Committee of Sponsoring Organizations
of the Treadway Commission. Based on this assessment, management has determined that the Company’s internal control over
financial reporting as of September 30, 2020 was not effective.
A
material weakness, as defined in the standards established by the Sarbanes-Oxley, is a deficiency, or a combination of deficiencies,
in internal control over financial reporting such that there is a reasonable possibility that a material misstatement of our annual
or interim unaudited condensed consolidated financial statements will not be prevented or detected on a timely basis.
39
The
ineffectiveness of the Company’s internal control over financial reporting was due to the following material weaknesses:
●
Inadequate
segregation of duties due to limited personnel consistent with control objectives;
●
Adherence
to formal policies and procedures post-bankruptcy; and
●
Lack
of risk assessment procedures on internal controls to detect financial reporting risks on a timely manner.
Changes
in Internal Control Over Financial Reporting
Other
than described above there have been no changes in our internal control over financial reporting that occurred during our thrid
quarter of 2020 that have materially affected, or that are reasonably likely to materially affect, our internal control over financial
reporting.
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.