Item 4. Controls and Procedures
ITEM 4: CONTROLS AND PROCEDURES.
Evaluation of Disclosure Controls and Procedures
With the participation of management, our principal executive officer and principal financial officer carried out an evaluation, pursuant to Rule 13a-15(b) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), of the effectiveness of our disclosure controls and procedures (as defined in Rule 13a-15(e) of the Exchange Act) as of the end of the period covered by this report. Based upon that evaluation, our principal executive officer and principal financial officer concluded that our disclosure controls and procedures were not effective as of June 30, 2023 because of the existing material weaknesses in internal control over financial reporting as previously disclosed in our annual report on Form 10-K for the year end December 31, 2022.
Notwithstanding these material weaknesses, our management, including our principal executive officer and principal financial officer, has concluded that the condensed consolidated financial statements included in this Quarterly Report on Form 10-Q are fairly stated in all material respects in accordance with GAAP for each of the periods presented.
Management's Plan to Remediate the Material Weakness
During the quarter we have implemented several process changes to limit the accumulation and aging of unmatched items and the implementation of a monthly reconciliation to ensure completeness and accuracy of unmatched items. Additionally, management is currently in the process of developing and implementing changes as a part of a comprehensive remediation plan to address the material weakness related to the application of percentage-of-completion accounting as well as the necessary processes and controls to address the segregation of duties material weakness. We believe the remediation activities will extend through the remainder of fiscal year 2023.
The Company has hired a new Chief Accounting Officer and a Director of Technical Accounting with public company and SOX experience that are already working on the implementation of processes and controls required to remediate these material weaknesses.
Additionally, the Company engaged new consultants to perform internal audit services and to advise on remediation efforts.
Changes in Internal Control Over Financial Reporting
Except as described above, there were no changes in internal control over financial reporting identified in the evaluation for the quarter ended June 30, 2023, that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.
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PART II: OTHER INFORMATION
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