Item 4. Controls and Procedures
ITEM
4. CONTROLS AND PROCEDURES.
(a)
Disclosure Controls and Procedures
As of
June 30, 2022, being the end of the period covered by this Report, we carried out an evaluation required by Rule 13a-15 of the
Securities Exchange Act of 1934, as amended (the “Exchange Act”) 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 the Company’s “disclosure controls and procedures” and “internal control over financial reporting”
as of the end of the period covered by this Quarterly Report.
We maintain
disclosure controls and procedures as defined in Rules 13a-15(e) and 15d-15(e) of the Exchange Act that are designed to ensure
that information required to be disclosed in our reports filed or submitted to the SEC under the Exchange Act is recorded, processed,
summarized and reported within the time periods specified by the SEC’s rules and forms, and that information is accumulated
and communicated to management, including the principal executive and financial officer as appropriate, to allow timely decisions
regarding required disclosures. Our principal executive officer and principal financial officer evaluated the effectiveness of
disclosure controls and procedures as of the end of the period covered by this quarterly report (the “Evaluation Date”),
pursuant to Rule 13a- 15(b) under the Exchange Act. Based on that evaluation, our principal executive officer and principal financial
officer concluded that, as of the Evaluation Date, our disclosure controls and procedures were not effective 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 management,
including our principal executive officer and principal financial officer, as appropriate to allow timely decisions regarding required
disclosure, due to material weaknesses in our control environment and financial reporting process.
Our management,
including our principal executive officer and principal financial officer, does not expect that our Disclosure Controls and 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 the Company have been detected. These inherent limitations include the realities that judgments
in decision- making can be faulty, and that breakdowns can occur because of a simple error or mistake. Additionally, controls can
be circumvented by the individual acts of some persons, by collusion of two or more people, or by management or board override
of the control.
The design
of any system of controls 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; over time, controls
may become inadequate because of changes in conditions, or the degree of compliance with the policies or procedures may deteriorate.
Because
of the inherent limitations in a cost-effective control system, misstatements due to error or fraud may occur and not be detected.
(b)
Management’s Quarterly Report on Internal Control over Financial Reporting
Our management
is responsible for establishing and maintaining adequate internal control over financial reporting, as such term is defined in
Exchange Act Rule 13a-15(f). In evaluating the effectiveness of our internal control over financial reporting, our management used
the criteria set forth by the Committee of Sponsoring Organizations of the Treadway Commission (COSO) in Internal Control –
Integrated Framework (2013). Internal control over financial reporting is a process designed to provide reasonable assurance regarding
the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally
accepted accounting principles and includes those policies and procedures that (a) pertain to the maintenance of records that,
in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the Company; (b) provide
reasonable assurance that transactions are recorded as necessary to permit the preparation of financial statements in accordance
with generally accepted accounting principles and that receipts and expenditures of the Company are being made only in accordance
with authorizations of the our management and directors; and (c) provide reasonable assurance regarding prevention or timely detection
of unauthorized acquisition, use or disposition of the Company’s assets that could have a material effect on the financial
statements.
8
Based
on our evaluation under the framework described above, as of June 30, 2022, our management concluded that we had “material
weaknesses” (as such term is defined below) in our control environment and financial reporting process consisting of the
following as of the Evaluation Date:
1) lack
of a functioning audit committee due to a lack of a majority of independent members and a lack of a majority of outside directors
on our Board of Directors, resulting in ineffective oversight in the establishment and monitoring of required internal control
and procedures;
2) inadequate
segregation of duties consistent with control objectives; and
3) ineffective
controls over period end financial disclosure and reporting processes.
A “material
weakness” is defined under SEC rules as 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 a company’s annual or interim financial
statements will not be prevented or detected on a timely basis by the company’s internal controls.
As of
the date of this Quarterly Report, the Company does not intend to remedy the foregoing and therefore such material weaknesses in
our control environment and financial reporting process will continue due to lack of available capital. A system of controls, no
matter how well designed and operated, cannot provide absolute assurance that the objectives of the system of controls are met,
and no evaluation of controls can provide absolute assurance that all control issues and instances of fraud, if any, within a company
have been detected.
(c)
Change in Internal Control over Financial Reporting
There
were no significant changes to our internal control over financial reporting (as defined in Rules 13a-15(f) and 15d-15(f) under
the Exchange Act) during the fiscal quarter that could materially affect, or are reasonably likely to materially affect, our internal
control over financial reporting.
PART
II – OTHER INFORMATION
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