First Breach, Inc. 10-Q

Item 4. Controls and Procedures 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, as appropriate to allow timely decisions regarding required disclosure. We do not expect that our disclosure controls and procedures will prevent all errors and all instances of fraud. Disclosure controls and procedures, no matter how well conceived and operated, can provide only reasonable, not absolute, assurance that the objectives of the disclosure controls and procedures are met. Further, the design of disclosure controls and procedures must reflect the fact that there are resource constraints, and the benefits must be considered relative to their costs. Evaluation of Disclosure Controls and Procedures 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 the design and operation of our disclosure controls and procedures as of June 30, 2026. Based upon their evaluation, and due to material weaknesses in our internal control over financial reporting related to (i) insufficient accounting and financial reporting personnel with the appropriate level of technical accounting and SEC reporting experience to support our financial reporting requirements and maintain appropriate segregation of duties, and (ii) deficiencies in the design and operation of our monthly financial close process, including controls over the preparation, review and approval of journal entries and account reconciliations, our Chief Executive Officer and Chief Financial Officer concluded that our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act) were not effective as of June 30, 2026. Changes in Internal Control over Financial Reporting There were no changes in our internal control over financial reporting (as defined in Rule 13a-15(f) under the Securities Exchange Act of 1934) during the quarter ended June 30, 2026, that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting. Management’s Report on Internal Control Over Financial Reporting Our management is responsible for establishing and maintaining adequate internal control over financial reporting, as defined in the Exchange Act Rule 13a-15(f). Our internal control over financial reporting is designed to provide reasonable assurance to our management and board of directors regarding the preparation and fair presentation of published consolidated financial statements. Management conducted an evaluation of our internal control over financial reporting based on the framework in Internal Control-Integrated Framework issued in 2013 by the Committee of Sponsoring Organizations of the Treadway Commission (the “2013 Framework”). 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 consolidated financial statements will not be prevented or detected on a timely basis. Based on our evaluation under the 2013 Framework, management concluded that our internal control over financial reporting was not effective as of June 30, 2026, due to (i) insufficient accounting and financial reporting personnel with the appropriate level of technical accounting and SEC reporting experience to support the Company’s financial reporting requirements and maintain appropriate segregation of duties; and (ii) the design and operation of the Company’s monthly financial close process, including controls over the preparation, review and approval of journal entries and account reconciliations. 38 The Company supplements its internal accounting resources through the use of experienced external accounting and technical consultants who assist management with complex accounting matters, SEC reporting requirements and the financial reporting process. While these resources provide additional technical expertise and support, management has determined that the use of external consultants does not, by itself, remediate the identified material weaknesses. The Company will continue to evaluate and enhance its internal control over financial reporting. The material weaknesses will not be considered remediated until the applicable controls have been designed and implemented and have operated effectively for a sufficient period of time to allow management to conclude, through testing, that the controls are operating effectively. As a result, we performed additional analysis as deemed necessary to ensure that our consolidated financial statements were prepared in accordance with U.S. generally accepted accounting principles. Accordingly, management believes that the consolidated financial statements included in this Form 10-Q present fairly in all material respects our financial position, results of operations, and cash flows for the period presented. Management has implemented remediation steps to improve our internal control over financial reporting. Specifically, we are working to: (i) enhance its accounting and financial reporting resources, including through the continued use of qualified accounting and technical professionals and, as resources permit, the addition of appropriately qualified internal personnel; (ii) formalize and strengthen its monthly financial close procedures, including the timely preparation and review of account reconciliations and other financial close documentation; and (iii) implement and document controls requiring appropriate review and approval of journal entries by personnel with the requisite authority and accounting expertise. The Company can offer no assurance that these changes will ultimately have the intended effects. This Quarterly Report on Form 10-Q does not include an attestation report on internal controls from our independent registered public accounting firm due to our status as an emerging growth company under the JOBS Act. PART II - OTHER INFORMATION