Item 4. Controls and Procedures
ITEM
4. CONTROLS AND PROCEDURES
(a)
Evaluation of Disclosure Controls and Procedures
We
maintain disclosure controls and procedures that are designed to ensure that information required to be disclosed in our Securities and
Exchange Commission Act of 1934 reports is recorded, processed, summarized, and reported within the time periods specified in the Securities
and Exchange Commission’s rules and forms and that such information is accumulated and communicated to our management, including
our chief executive officer and chief financial officer, as appropriate, to allow for timely decisions regarding required disclosure.
In designing and evaluating the disclosure controls and procedures, we recognize that any controls and procedures, no matter how well
designed and operated, can provide only reasonable assurance of achieving the desired control objectives, and management is required
to apply its judgment in evaluating the cost-benefit relationship of possible controls and procedures.
As further discussed below, we carried out an evaluation,
under the supervision and with the participation of our management, including our chief executive officer and chief 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)
of the Exchange Act. Based on that evaluation, our chief executive officer and chief financial officer concluded that, because of certain
material weaknesses in our internal control over financial reporting, our disclosure controls and procedures as defined in Rule 13a-15(e)
and 15d-15(e) under the Exchange Act were not effective as of June 30, 2022.
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We hired a consultant to advise on technical issues
related to U.S. generally accepted accounting principles as relates to the maintenance of our accounting books and records and the preparation
of our consolidated financial statements. Although we are aware of the risks associated with not having dedicated accounting personnel,
we are also at an early stage in the development of our business. We anticipate expanding our accounting functions with dedicated staff
and improving our internal accounting procedures and separation of duties when we can absorb the costs of such expansion and improvement
with additional capital resources. In the meantime, management will continue to observe and assess our internal accounting function and
make necessary improvements whenever they may be required. If our remedial measures are insufficient to address the material weakness,
or if additional material weaknesses or significant deficiencies in our internal control over financial reporting are discovered or occur
in the future, our consolidated financial statements may contain material misstatements, and we could be required to restate our financial
results. In addition, if we are unable to successfully remediate this material weakness and if we are unable to produce accurate and timely
financial statements, our stock price may be adversely affected and we may be unable to maintain compliance with applicable stock exchange
listing requirements.
(b)
Changes in Internal Controls over Financial Reporting
Our
management is responsible for establishing and maintaining adequate internal control over financial reporting. Our internal control over
financial reporting is a process designed to provide reasonable, but not absolute, assurance regarding the reliability of financial reporting
and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. Because
of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of
any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions,
or that the degree of compliance with the policies or procedures may deteriorate.
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 our annual or interim financial statements will not be prevented or detected
on a timely basis.
Our management assessed the effectiveness of
the Company’s internal control over financial reporting at June 30, 2022, and this assessment identified some deficiencies
in our internal control over financial reporting.
Remediation
plan
The
company has established two procedures to begin addressing the controls area. Each quarter Senior Managers respond to a questionnaire
to identify areas that would impact the company’s financial statements to be reviewed against the reported financial statements.
Also, quarterly financial packages are collected and reviewed with each subsidiary to analyze and ensure completeness of their financial
statements.
Actions have been taken regarding the remediation
plan, however there remain actions to complete:
●
Walk through and document critical process. This portion of the plan will commence in Q3
●
Review resources and organizational structure to address segregation of duty issues and support the
jobs assigned. The structure has been defined and resources are being identified.
●
Implement a BI tool that will replace Excel worksheets that can be prone to errors. The tool has been selected and implementation is taking place.
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PART
II – OTHER INFORMATION
Text extracted from the filing as submitted to EDGAR. Formatting, tables and exhibits are simplified for reading; the original document is authoritative for anything you rely on.