Item 4. Controls and Procedures
Item 4. Controls and Procedures
Evaluation of Disclosure Controls and Procedures
The Company’s Chief Executive Officer and Chief Financial Officer
have evaluated the effectiveness of the Company’s disclosure controls and procedures as of March 31, 2022. The term “disclosure
controls and procedures,” as defined in Rule 13a-15(e) under the Securities Exchange Act of 1934, as amended (the “Exchange
Act”), means controls and other procedures of a company that are designed to ensure that information required to be disclosed by
a company in the reports that it files or submits under the Exchange Act is recorded, processed, summarized and reported, within the time
periods specified in the SEC’s rules and forms. Management recognizes that any controls and procedures, no matter how well designed
and operated, can provide only reasonable assurance of achieving their objectives and management necessarily applies its judgment in evaluating
the cost benefit relationship of possible controls and procedures. Based on its evaluation, management concluded as of March 31, 2022
that its disclosure controls and procedures were not effective because of material weaknesses in our internal control over financial reporting,
described below in Management’s Report on Internal Control Over Financial Reporting. Notwithstanding the identified material weaknesses,
management believes the financial statements included in this Form 10-Q fairly represent in all material respects our financial condition,
results of operations and cash flows at and for the periods presented in accordance with U.S. GAAP.
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Management’s Report on Internal Control Over Financial Reporting
The Company’s management is responsible for establishing and
maintaining adequate internal control over financial reporting. Responsibility, estimates and judgments by management are required to
assess the expected benefits and related costs of control procedures. The objectives of internal control include providing management
with reasonable, but not absolute, assurance that assets are safeguarded against loss from unauthorized use or disposition, and that transactions
are executed in accordance with management’s authorization and recorded properly to permit the preparation of consolidated financial
statements in conformity with accounting principles generally accepted in the United States. The Company’s Chief Executive Officer
and Chief Financial Officer assessed the effectiveness of its internal control over financial reporting as of March 31, 2022. In making
this assessment, its management used the criteria based on the framework in Internal Control - Integrated Framework 2013 issued by the
Committee of Sponsoring Organizations of the Treadway Commission. The Company’s Chief Executive Officer and Chief Financial Officer
have concluded that, as of March 31, 2022, its internal control over financial reporting was not effective in providing reasonable assurance
regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with
US generally accepted accounting principles. The Company’s Chief Executive Officer and Chief Financial Officer reviewed the results
of their assessment with its board of directors.
Based on its evaluation under this framework, management concluded
that its internal control over financial reporting was not effective as of the evaluation date due to the factors stated below.
Insufficient Resources: The Company has inadequate number of personnel
with requisite expertise in the key functional areas of finance and accounting to be able to have appropriately designed and operating
entity level controls including risk assessment; information and communication; monitoring; and financial reporting.
Inadequate Segregation of Duties: The Company has inadequate number
of personnel to properly segregate duties to implement control procedures.
Inherent Limitations on Effectiveness of Controls
Internal control over financial reporting has inherent limitations
which include but is not limited to the use of independent professionals for advice and guidance, interpretation of existing and/or changing
rules and principles, segregation of management duties, scale of organization, and personnel factors. Internal control over financial
reporting is a process that involves human diligence and compliance and is subject to lapses in judgment and breakdowns resulting from
human failures. Internal control over financial reporting also can be circumvented by collusion or improper management override. Because
of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements on a timely basis, however
these inherent limitations are known features of the financial reporting process and it is possible to design into the process safeguards
to reduce, though not eliminate, this risk. Therefore, even those systems determined to be effective can provide only reasonable assurance
with respect to financial statement preparation and presentation. 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.
No changes in Internal Control over Financial Reporting has been made
since fiscal year end 2021.
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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.