Item 4. Controls and Procedures
ITEM 4.
CONTROLS AND PROCEDURES.
Evaluation of Disclosure Controls and Procedures
We maintain disclosure controls and procedures
(as defined in Rule 13a-15(e) under the Exchange Act). Disclosure controls and procedures refer to controls and other procedures designed
to ensure that information required to be disclosed in the reports we file or submit under the Exchange Act is recorded, processed, summarized
and reported within the time periods specified in the rules and forms of 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.
As required by Rule 13a-15(e) of the Exchange
Act, our management has carried out an evaluation, with the participation and under the supervision of our chief executive officer and
chief financial officer, of the effectiveness of the design and operation of our disclosure controls and procedures, as of June 30, 2024.
Based upon, and as of the date of this evaluation, our chief executive officer and chief financial officer determined that, because of
the material weaknesses described in Item 9A “Controls and Procedures” of our Annual Report on Form 10-K for the fiscal year
ended December 31, 2023, which we are still in the process of remediating as of June 30, 2024, along with the error identified in our
Quarterly Report on Form 10-Q’s for the six months ended June 30, 2024 and the three months ended March 31, 2024, our disclosure
controls and procedures were not effective. The error identified in our Quarterly Report on Form 10-Q for the six months ended June 30,
2024 has been corrected in this amended filing. Investors are directed to Item 9A of our Annual Report on Form 10-K for the fiscal year
ended December 31, 2023, for the description of these weaknesses.
53
Remediation of Material Weaknesses in Internal Control Over Financial
Reporting
We have evaluated the material weakness described
above and our management and board of directors are committed to the design and successful implementation of internal control over financial
reporting as promptly as possible. We are evaluating our updated internal controls design and will determine whether the controls have
operated effectively during 2024 in order to fully remediate the aforementioned material weakness in our internal control over financial
reporting.
As disclosed in our Annual Report on Form 10-K
for the fiscal year ended December 31, 2023, our management has identified the steps necessary to address the material weaknesses, and
in the second quarter of 2024, we continued to implement the following remedial procedures:
·
We are making necessary changes by making strategic hiring decisions and providing training to our financial team, and other relevant personnel, on the GAAP accounting guidelines applicable to financial reporting requirements.
·
We plan to implement proper documentation procedures for key functional areas, control objectives and our workflows.
·
We plan to reinforce effective compensating controls can improve the design of the current process with limited human resources.
·
We have hired external consultants to assist with our assessment and accounting for variable consideration
as accounted for under ASC 606 and our credit loss expense as accounted for under ASC 326.
We intend to complete the remediation of the material
weaknesses discussed above as soon as practicable, but we can give no assurance that we will be able to do so. Designing and implementing
an effective disclosure controls and procedures is a continuous effort that requires us to anticipate and react to changes in our business
and the economic and regulatory environments and to devote significant resources to maintain a financial reporting system that adequately
satisfies our reporting obligations. The remedial measures that we have taken and intend to take may not fully address the material weaknesses
that we have identified, and material weaknesses in our disclosure controls and procedures may be identified in the future. Should we
discover such conditions, we intend to remediate them as soon as practicable. We are committed to taking appropriate steps for remediation,
as needed.
Changes in Internal Control Over Financial Reporting
Other than in connection with the implementation
of the remedial measures described above, there were no changes in our internal controls over financial reporting during the second quarter
of 2024 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.
54
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.