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 and 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 June 30, 2022 our management has completed their evaluation and has concluded that our disclosure controls and procedures
were not effective, as a result of the material weaknesses in internal control over financial reporting described below, and thus that there
remains a reasonable possibility that a material misstatement of the Company’s interim financial statements will not be prevented
or detected on a timely basis. Our assessment of internal controls over financial reporting does not include an evaluation by the Company’s
registered public accounting firm.
25
Material
Weaknesses in Internal Control over Financial Reporting
Management
assessed the effectiveness of the Company’s internal control over financial reporting as of the quarter ended June 30, 2022 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 June 30, 2022 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 consolidated financial statements will not be prevented or detected on a timely basis.
The
ineffectiveness of the Company’s internal control over financial reporting was due to the following material weaknesses:
●
Lack of adherence to formal policies and procedures;
●
Lack of risk assessment procedures on internal controls to detect financial reporting risks in a timely manner; and
●
Lack of sufficient formal procedures and controls to achieve complete and accurate financial reporting and disclosures, including controls
over the preparation and review of journal entries and account reconciliations.
Management’s
Plan to Remediate the Material Weaknesses
Management
has been implementing and continues to implement measures designed to ensure that control deficiencies contributing to the material weakness
are remediated, such that these controls are designed, implemented, and operating effectively. The remediation actions include:
●
Engagement of external
financial consulting firm to continue to enhance financial reporting, financial operations and internal controls; and
●
Documentation of key procedures
and controls using a risk-based approach.
Management
will continue to monitor and evaluate the effectiveness of our internal controls and procedures over financial reporting on an ongoing
basis and is committed to taking further action and implementing additional enhancements or improvements, as necessary and as funds allow.
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 the three months
ended June 30, 2022 that have materially affected, or that are reasonably likely to materially affect, our internal control over financial
reporting.
26
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.