Item 4. Controls and Procedures
Item 4. Controls and Procedures
Evaluation of Disclosure Controls and Procedures
We maintain disclosure controls and procedures
that are designed to ensure that material information required to be disclosed in our periodic reports filed or submitted under the Securities
Exchange Act of 1934, as amended, or the Exchange Act, is recorded, processed, summarized and reported within the time periods specified
in the SEC’s rules and forms. Our disclosure controls and procedures are also designed to ensure that information required to be
disclosed in the reports we file or submit under the Exchange Act are accumulated and communicated to our management, including our principal
executive officer and principal financial officer as appropriate, to allow timely decisions regarding required disclosure.
We carried out an evaluation, under the supervision
and with the participation of our management, including our principal executive officer and principal financial officer, of the effectiveness
of the design and operation of our disclosure controls and procedures, as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange
Act. Based upon that evaluation, as of September 30, 2025, our principal executive officer and principal financial officer concluded that
our disclosure controls and procedures were not effective due to the material weakness in our internal controls.
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 the Company’s annual or interim financial statements will not be prevented or detected on a timely basis.
Material Weaknesses in Internal Controls
As of December 31, 2024, due to staffing and resource
constraints, the Company required significant additional time to close the books and records. Management, after year end, continued to
perform its account reconciliations which required further adjustments to be recorded. As such, information technology, business processes
and financial reporting controls were deemed to be ineffective due to (a) the lack of personnel to ensure the books and records are closed
accurately and on a timely basis, (b) lack of proper review over the accounting for certain notes receivable accounted for at fair value,
(c) the lack of appropriate segregation of duties, (d) certain general information technology control deficiencies regarding user access
provisioning and administrative access review, and (e) insufficient documentation to support and evidence the design and implementation
of controls.
Changes in Internal Control Over Financial Reporting
On October 1, 2025, the Company hired an Interim Chief Financial Officer
to assist the Company’s finance department. Otherwise, there were no changes in our internal control over financial reporting for
the quarter ended September 30, 2025 that materially affected, or are reasonably likely to materially affect, our internal control over
financial reporting.
Limitations on Effectiveness of Controls
Our management does not expect that our disclosure
controls and procedures or our internal controls will prevent all errors and all fraud. A control system, no matter how well conceived
and operated, can provide only reasonable, not absolute, assurance that the objectives of the control system are met. Further, the design
of a control system must reflect the fact that there are resource constraints, and the benefits of controls must be considered relative
to their costs. Because of the inherent limitations in all control systems, no evaluation of controls can provide absolute assurance
that all control issues and instances of fraud, if any, within our company have been detected.
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Part II - Other Information
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