What changed in this filing

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Item 4. Controls and Procedures

2025-03-17 compared with 2024-12-16 · 72 added, 35 removed, 4 unchanged (96% of the section changed)

Controls and Procedures

Evaluation of Disclosure Controls and Procedures

The Company’s management, with the participation of the Company’s Chief Executive Officer and Chief Financial Officer, has evaluated the effectiveness of the Company’s disclosure controls and procedures (as such term is defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended (the “Exchange Act”)) as of the end of the period covered by this report.

Based on their evaluation, the Company’s Chief Executive Officer and Chief Financial Officer have concluded that, because of the material weakness in internal control over financial reporting disclosed below, as of October 31, 2024, the Company’s disclosure controls and procedures were not effective at a reasonable assurance level.

There are inherent limitations to the effectiveness of any system of disclosure controls and procedures, including the possibility of human error and the circumvention or overriding of the controls and procedures.

Accordingly, even effective disclosure controls and procedures can only provide reasonable assurance of achieving their control objectives.

Material Weakness on Internal Control Over Financial Reporting

The Company’s management is responsible for establishing and maintaining adequate internal control over financial reporting as defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act.

The Company’s internal control system is designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with U.S.

of Disclosure Controls and Procedures

Company’s management, with the participation of the Company’s Chief Executive Officer and Chief Financial Officer, has evaluated

the effectiveness of the Company’s disclosure controls and procedures (as such term is defined in Rules 13a-15(e) and 15d-15(e)

under the Securities Exchange Act of 1934, as amended (the “Exchange Act”)) as of the end of the period covered by this report.

Based on their evaluation, the Company’s Chief Executive Officer and Chief Financial Officer have concluded that, because of the

material weakness in internal control over financial reporting disclosed below, as of January 31, 2025, the Company’s disclosure

controls and procedures were not effective at a reasonable assurance level.

ELECTRONICS, INC.

and SUBSIDIARIES

are inherent limitations to the effectiveness of any system of disclosure controls and procedures, including the possibility of human

error and the circumvention or overriding of the controls and procedures.

Accordingly, even effective disclosure controls and procedures

can only provide reasonable assurance of achieving their control objectives.

Weakness on Internal Control Over Financial Reporting

Company’s management is responsible for establishing and maintaining adequate internal control over financial reporting as defined

in Rules 13a-15(f) and 15d-15(f) under the Exchange Act.

The Company’s internal control system is designed to provide reasonable

assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance

Because of 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.

Management assessed the effectiveness of the Company’s internal control over financial reporting as of April 30, 2024.

In making this assessment, management used the criteria established in Internal Control—Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission.

Based on this evaluation, the Company’s management concluded that the Company’s internal control over financial reporting was not effective as of April 30, 2024, because of the material weakness in internal control over financial reporting discussed below.

A material weakness is a deficiency, or combination of deficiencies, in internal control over financial reporting, such that there is a reasonable possibility that a material misstatement of the annual or interim financial statements will not be prevented or detected on a timely basis.

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.

assessed the effectiveness of the Company’s internal control over financial reporting as of April 30, 2024.

In making this assessment,

management used the criteria established in Internal Control—Integrated Framework (2013) issued by the Committee of Sponsoring

Organizations of the Treadway Commission.

Based on this evaluation, the Company’s management concluded that the Company’s

internal control over financial reporting was not effective as of April 30, 2024, because of the material weakness in internal control

over financial reporting discussed below.

material weakness is a deficiency, or combination of deficiencies, in internal control over financial reporting, such that there is a

reasonable possibility that a material misstatement of the annual or interim financial statements will not be prevented or detected on

a timely basis.

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements.

In the course of preparing the Company’s consolidated financial statements as of April 30, 2024 and for the year then ended, management identified a material weakness in internal control over the calculation of loss provision accruals in contracts with customers.

The Company’s controls over loss provision accruals were not sufficiently designed to capture previously recognized contract losses when calculating the required balance of loss provision accruals as of the end of the reporting period.

The errors resulting from this material weakness did not cause material misstatements in previously issued annual or interim financial statements.

Such errors were corrected prior to the issuance of the Company’s consolidated financial statements as of April 30, 2024 and for the year then ended.

If not remediated timely, the deficiency described above could result in a material misstatement to the future annual or interim consolidated financial statements.

The Company concluded that the item noted above constituted a material weakness in the Company’s internal control over financial reporting as of April 30, 2024.

Notwithstanding the existence of the material weakness described above, management believes that the audited consolidated financial statements included in the Form 10-K fairly presented, in all material respects, our financial position, results of operations and cash flows as of and for the periods presented, in conformity with GAAP.

FREQUENCY ELECTRONICS, INC.

and SUBSIDIARIES

Plan to Remediate Material Weakness

The Company is currently in the process of remediating the material weakness and has taken actions to address the underlying causes of the material weakness including improving controls over the calculation of loss provision accruals.

The Company has updated its method of calculating loss provision accruals by considering previously recognized contract losses.

The Company has also started to implement enhanced review, reconciliation, and monitoring controls over loss provision accruals and its underlying calculations.

The Company intends to remediate these deficiencies as soon as possible and believes these actions will be sufficient to remediate the identified material weaknesses and strengthen the Company's internal control over financial reporting.

As the Company continues to evaluate and improve its internal control over financial reporting, management may determine that additional measures or modifications to the remediation plan are necessary to address the material weakness.

Moreover, the Company cannot provide assurance that additional material weaknesses will not arise in the future.

Changes in Internal Control Over Financial Reporting

We are in the process of implementing certain changes to our internal control over financial reporting to remediate the material weaknesses discussed above.

Except as noted above, there have been no changes in the Company’s internal control over financial reporting (as such term is defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act) during the fiscal quarter ended October 31, 2024 that has materially affected, or are reasonably likely to materially affect, the Company’s internal control over financial reporting.

the course of preparing the Company’s consolidated financial statements as of April 30, 2024 and for the year then ended, management

identified a material weakness in internal control over the calculation of loss provision accruals in contracts with customers.

The Company’s

controls over loss provision accruals were not sufficiently designed to capture previously recognized contract losses when calculating

the required balance of loss provision accruals as of the end of the reporting period.

The errors resulting from this material weakness

did not cause material misstatements in previously issued annual or interim financial statements.

Such errors were corrected prior to

the issuance of the Company’s consolidated financial statements as of April 30, 2024 and for the year then ended.

If not remediated

timely, the deficiency described above could result in a material misstatement to the future annual or interim consolidated financial

Company concluded that the item noted above constituted a material weakness in the Company’s internal control over financial reporting

as of April 30, 2024.

Notwithstanding

the existence of the material weakness described above, management believes that the audited consolidated financial statements included

in the Form 10-K fairly presented, in all material respects, our financial position, results of operations and cash flows as of and for

the periods presented, in conformity with GAAP.

to Remediate Material Weakness

Company is currently in the process of remediating the material weakness and has taken actions to address the underlying causes of the

material weakness including improving controls over the calculation of loss provision accruals.

The Company has updated its method of

calculating loss provision accruals by considering previously recognized contract losses.

The Company has also started to implement enhanced

review, reconciliation, and monitoring controls over loss provision accruals and its underlying calculations.

The Company intends to

remediate these deficiencies as soon as possible and believes these actions will be sufficient to remediate the identified material weaknesses

and strengthen the Company’s internal control over financial reporting.

As the Company continues to evaluate and improve its internal

control over financial reporting, management may determine that additional measures or modifications to the remediation plan are necessary

to address the material weakness.

Moreover, the Company cannot provide assurance that additional material weaknesses will not arise in

in Internal Control Over Financial Reporting

are in the process of implementing certain changes to our internal control over financial reporting to remediate the material weaknesses

discussed above.

Except as noted above, there have been no changes in the Company’s internal control over financial reporting (as

such term is defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act) during the fiscal quarter ended January 31, 2025 that has

materially affected, or are reasonably likely to materially affect, the Company’s internal control over financial reporting.

OTHER INFORMATION

As disclosed in “Item 1A.

Risk Factors” in the Form 10-K, there are a number of risks and uncertainties that could have a material adverse effect on the Company’s business, financial position, results of operations and/or cash flows.

There are no material updates or changes to the Company’s risk factors since the filing of the Form 10-K.

disclosed in “Item 1A.

Risk Factors” in the Form 10-K, there are a number of risks and uncertainties that could have a material

adverse effect on the Company’s business, financial position, results of operations and/or cash flows.

There are no material updates

or changes to the Company’s risk factors since the filing of the Form 10-K.

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 4. Controls and Procedures