What changed in this filing

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Item 4. Controls and Procedures

2024-05-20 compared with 2023-11-22 · 42 added, 9 removed, 3 unchanged (94% of the section changed)

Controls and Procedures

Evaluation of Disclosure Controls and Procedures

Disclosure controls and procedures are controls and other procedures that are designed to ensure that information required to be disclosed in our reports filed or submitted under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms.

Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed in our reports filed or submitted under the Exchange Act is accumulated and communicated to our management, including our Chief Executive Officer and Chief Financial Officer, to allow timely decisions regarding required disclosure.

As required by Rules 13a-15 and 15d-15 under the Exchange Act, our Chief Executive Officer and Chief Financial Officer carried out an evaluation of the effectiveness of our disclosure controls and procedures as of September 30, 2023.

Based upon their evaluation, our Chief Executive Officer and Chief Financial Officer concluded that due to the Company’s material weaknesses in accounting for accruals our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act) were not effective due to a material weakness in internal control over financial

reporting existed relating to financial reporting systems and accounting for accruals, which resulted in the restatement of the previously issued financials statements included in the 2022 Form 10-K/A filed with the SEC on October 30, 2023.

A material weakness is a deficiency, or combination of deficiencies, in internal control over financial reporting, such that there is a reasonable possibility that a material misstatement of the Company’s annual or interim financial statements will not be prevented or detected on a timely basis.

To address this material weakness, we are assessing our resource needs as well as roles and responsibilities with a particular focus on accounting and financial reporting staff and will make changes as needed.

Disclosure controls and procedures are controls and other procedures designed to ensure that information required to be disclosed in our reports

filed or submitted under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms.

Disclosure controls and procedures include, without limitation, controls and procedures

designed to ensure that information required to be disclosed in our reports filed or submitted under the Exchange Act is accumulated and communicated to management, upon the Closing, TMTG's Chief Executive Officer and Chief Financial Officer (the

“ Certifying Officers ”), to allow timely decisions regarding required disclosure.

Under the supervision and with the participation of Private TMTG’s management, including its Certifying Officers, Private TMTG carried out an

evaluation of the effectiveness of the design and operation of its disclosure controls and procedures as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act.

In connection with the preparation of our financial statements as of and for

the nine months ended September 30, 2023, Private TMTG’s management identified a material weakness in its internal control over financial reporting.

A “material weakness” 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 an entity’s financial statements will not be prevented or detected on a timely basis.

Private TMTG’s management determined that there were errors

related to the classification of income in the previously issued financial statements for the years ended December 31, 2021 and 2022.

In accordance with SEC Staff Accounting Bulletin No.

99, “Materiality,” and SEC Staff Accounting Bulletin No.

108, “Considering the Effects of Prior Year Misstatements when Quantifying Misstatements in Current Year Financial Statements,” Private TMTG determined that the errors were material to its previously issued financial statements.

Private TMTG concluded that the previously issued financial statements should be restated.

The material weaknesses identified by Private TMTG’s management related to material errors over financial reporting, which required the

restatement of its financial statements for the years ended December 31, 2021 and 2022.

Specifically, Private TMTG’s management determined the material weaknesses related to a material error in classifying income from a licensing arrangement in

2021 as net sales from related parties rather than the proper classification as other income from related parties.

Private TMTG’s management determined that the restatement matters primarily related to its failure to design and maintain formal

accounting policies, processes, and controls to analyze, account for and properly disclose income recordation as well as a need for additional accounting personnel who have the requisite experience in SEC reporting regulation.

TMTG is committed to remediating the material weaknesses described above and continuing remediation efforts during 2024.

We intend to initiate and

implement several remediation measures including, but not limited to hiring additional accounting staff with the requisite background and knowledge, engaging third parties to assist in complying with the accounting and financial reporting

requirements related to significant and complex transactions as well as adding personnel to assist with formalizing our business processes, accounting policies and internal control documentation, strengthening supervisory reviews by our

management, and evaluating the effectiveness of our internal controls in accordance with the framework established by Internal Control - Integrated Framework (2013) published by the Committee of Sponsoring Organizations of the Treadway

While our efforts are ongoing, we plan to continue to take additional steps to remediate the material weaknesses, improve our financial reporting systems, and implement new policies, procedures, and controls;

however, we cannot

guarantee those measures will prevent or detect material weaknesses in the future.

Although we intend to pursue the remediation efforts mentioned above, all identified material weaknesses continue to exist as of the date of this

Quarterly Report and we cannot provide any assurance that we, or our independent registered public accounting firm, will not identify new material weaknesses in our internal controls over financial reporting in the future.

undertaking efforts to remediate these material weaknesses, the material weaknesses will not be considered remediated until our remediation plan has been fully implemented, the applicable controls operate for a sufficient period of time, and we

have concluded through testing, that the newly implemented and enhanced controls are designed and operating effectively.

We are working to remediate the material weaknesses as efficiently and effectively as possible but expect that full

remediation could potentially go beyond December 31, 2024.

At this time, we cannot provide an estimate of costs expected to be incurred in connection with implementing this remediation plan;

however, these remediation measures will be time

consuming, incur significant costs, and place significant demands on our financial and operational resources.

Changes in Internal Control Over Financial Reporting

There was no change in our internal control over financial reporting that occurred during the fiscal quarter covered by this Quarterly Report that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

There was no change in our internal control over financial reporting that occurred during the fiscal quarter covered by this Quarterly Report that

has materially affected, or is 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