What changed in this filing

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Item 4. Controls and Procedures

2026-05-12 compared with 2025-11-13 · 55 added, 53 removed, 5 unchanged (96% of the section changed)

1 unchanged sentence

Evaluation of Disclosure Controls and Procedures

Disclosure controls and procedures

are designed to ensure that information required to be disclosed by us in our Exchange Act reports 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 or persons performing similar functions,

as appropriate to allow timely decisions regarding required disclosure.

Under the supervision and

with the participation of our current management, including our CEO and CFO, we evaluated the effectiveness of our disclosure controls

and procedures as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended (the “Exchange

Act”), as of September 30, 2025.

Based on this evaluation of our disclosure controls and procedures, our CEO and CFO have concluded

that our disclosure controls and procedures were not effective as of September 30, 2025 because of certain material weaknesses in our

internal control over financial reporting, as further described below.

Notwithstanding the conclusion

by our CEO and CFO that our disclosure controls and procedures as of September 30, 2025, were not effective, and notwithstanding the material

weaknesses in our internal control over financial reporting described below, management believes that the consolidated financial statements

and related financial information included in this Interim Report on Form 10-Q fairly present in all material respects our financial condition,

results of operations, and cash flows as of the dates presented, and for the periods ended on such dates, in conformity with accounting

principles generally accepted in the United States of America (“U.S.

Disclosure controls and procedures are designed to ensure that information

required to be disclosed by us in our Exchange Act reports 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 or persons performing similar functions, as appropriate to allow timely decisions regarding

required disclosure.

Under the supervision and with the participation of our current management,

including our CEO and CFO, we evaluated the effectiveness of our disclosure controls and procedures as defined in Rules 13a-15(e) and

15d-15(e) under the Securities Exchange Act of 1934, as amended (the “Exchange Act”), as of March 31, 2026.

Based on this

evaluation of our disclosure controls and procedures, our CEO and CFO have concluded that our disclosure controls and procedures were

not effective as of March 31, 2026 because of certain material weaknesses in our internal control over financial reporting, as further

described below.

Notwithstanding the conclusion by our CEO and CFO that our disclosure

controls and procedures as of March 31, 2026 were not effective, and notwithstanding the material weaknesses in our internal control over

financial reporting described below, management believes that the condensed consolidated financial statements and related financial information

included in this Quarterly Report on Form 10-Q fairly present in all material respects our financial condition, results of operations,

and cash flows as of the dates presented, and for the periods ended on such dates, in conformity with accounting principles generally

accepted in the United States of America (“U.S.

Material Weaknesses

Costs of Goods Sold.

During the preparation of financial statements for the quarter ended June 30, 2025, management identified multiple costs that were improperly

included in cost of goods sold in the quarter ended March 31, 2025, as well as for the three and nine months ended September 30, 2024,

as disclosed in Note 4 of this condensed consolidated financial statements.

The root cause of the error was a lack of preventative control

designed to ensure proper categorization of expenses on purchase orders generated by our operating departments.

In addition, the Company

lacked detective controls to ensure finance management reviewed period-over-period changes in cost of goods sold relative to budgeted

and actual production levels.

As a result of these control deficiencies, cost of goods sold was overstated by $310,160 for the three months

ended March 31, 2025, with a corresponding understatement of total operating expenses, and by $137,204 for the three and nine months ended

September 30, 2024, also with a corresponding understatement of total operating expenses.

See Note 4 of the condensed consolidated financial

statements (unaudited) included in this Quarterly Report on Form 10-Q.

Accounting Personnel and

Financial Reporting Controls.

Management also identified that the Company does not currently have adequate staffing in its accounting

department and has not yet designed and implemented the appropriate processes and internal controls to support accurate and timely financial

reporting, which (i) may restrict the Company’s ability to review and approve certain material journal entries which increases the

likelihood that a material misstatement of interim or annual financial statements might not be prevented;

and (ii) resulted in the Company’s

inability to have proper segregation of duties between the preparation, review and approval of certain material reconciliations related

to financial reporting in a timely manner.

Fair Value Calculation

In addition, management identified a material weaknesses in the design of internal controls related to the review

of the fair value calculation of SAFE notes performed by a third-party valuation specialist.

The controls lacked the precision needed

to detect inappropriate inputs that could materially impact valuation.

The Company is actively working

to develop and implement remediation plans related to the material weakness identified in this section captioned “ Part I, Item

Controls and Procedures .” Remediation efforts include enhancing the design and implementation of controls over the accounting

for financial instruments and hiring additional qualified accounting personnel.

Accounting Personnel and Financial Reporting Controls.

determined that the Company does not currently maintain sufficient accounting personnel and has not fully designed and implemented the

processes and internal controls necessary to support accurate and timely financial reporting.

These deficiencies (i) limit the Company’s

ability to effectively review and approve certain material journal entries and properly adopt new accounting pronouncements, increasing

the risk that a material misstatement of interim or annual financial statements may not be prevented or detected on a timely basis, and

(ii) have resulted in an insufficient segregation of duties between the preparation, review, and approval of certain material reconciliations

and other financial reporting controls.

For the year ended December 31, 2025, management identified that the

Company did not initially accrue all Board of Director compensation earned during the year ended December 31, 2025.

During the year-end

audit process, management recorded the appropriate accrual and related Board of Director compensation expense for the year ended December

In addition, management identified presentation revisions in the statements

of cash flows for the six months ended June 30, 2025 and the nine months ended September 30, 2025.

Certain items were reclassified between

operating and financing activities, including amounts related to short-term debt and proceeds from bridge financing arrangements, and

certain components associated with the reverse recapitalization transaction were adjusted for proper presentation.

These revisions affected

the classification of cash flows between operating and financing activities but had no impact on total change in cash, net loss, or previously

reported balance sheet amounts.

Management evaluated the quantitative and qualitative factors associated

with these matters and concluded that the corrections were not material to any previously issued annual or interim financial statements.

Accordingly, the Company has reflected these changes in the affected prior-period financial statements in this Quarterly Report to reflect

these reclassifications as immaterial reclassifications to previously issued financial statements.

Fair Value Calculation Controls.

In addition, management identified

a material weaknesses in the design of internal controls related to the review of the fair value calculation of SAFE notes performed

by a third-party valuation specialist.

The controls lacked the precision needed to detect inappropriate inputs that could materially

impact valuation.

The Company is actively working to develop and implement remediation

plans related to the material weakness identified in this section.

Remediation efforts include enhancing the design and implementation

of controls over the accounting for financial instruments and hiring additional qualified accounting personnel.

Internal Control over Financial Reporting

There were no changes in our

internal control over financial reporting (as such term is defined in Rules 13a-15(f) and 15d-15(f) of the Exchange Act) during the most

recent fiscal quarter that have materially affected, or are reasonably likely to materially affect, our internal control over financial

There were no other changes in our internal control over financial

reporting (as such term is defined in Rules 13a-15(f) and 15d-15(f) of the Exchange Act) during the most recent fiscal quarter that have

materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

PART II - OTHER INFORMATION

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.

What changed 10-Q

Item 4. Controls and Procedures