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 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, 2023.
Management
has completed such evaluation and 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 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, 2023 were not effective.
Material
Weaknesses in Internal Control over Financial Reporting
Management
assessed the effectiveness of our internal control over financial reporting as of September 30, 2023 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 our internal control over financial reporting as of September 30, 2023 was not
effective.
A
material weakness, as defined in the standards established by 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 our 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
management testing over documented formal procedures and controls, and time to evaluate continuous effectiveness of controls to achieve
complete and accurate financial reporting and disclosures, including documented controls over the preparation and review of journal
entries and account reconciliations.
22
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 weaknesses
are remediated, such that these controls are designed, implemented, and operating effectively. The remediation actions include:
●
New management personnel,
including our Chief Financial Officer, who is overseeing the financial reporting process and implementation of enhanced controls
and governance;
●
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
is committed to maintaining a strong internal controls environment and implementing measures designed to help ensure that control deficiencies
contributing to the material weaknesses are remediated as soon as possible. We have documented key procedures and controls using a risk-based
approach and have, therefore, made progress toward remediation. We continue to implement our remediation plan, which includes continued
engagement of an external financial consulting firm to enhance financial reporting and operations as well as design and implementation
of controls. We will consider the material weaknesses remediated after the applicable controls operate for a sufficient period of time,
and Management has concluded, through testing, that the controls are operating effectively.
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 our third quarter
of 2023 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.