Item 4. Controls and Procedures
Item 4. Controls and Procedures.
Disclosure controls and procedures are controls
and other procedures 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 Chief Executive Officer and Chief Financial
Officer (together, the “Certifying Officers”), to allow timely decisions regarding required disclosure.
Under the supervision and with the participation
of our management, including our Certifying Officers, we carried out an evaluation 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) under the Exchange Act. Based on the foregoing, our
Certifying Officers concluded that our disclosure controls and procedures were not effective as of the end of the period covered by this
Report.
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. The material weaknesses that have been identified included
our lack of (i) sufficient financial reporting and accounting personnel with appropriate knowledge of generally accepted accounting
principles in the United States of America (the “U.S. GAAP”) and SEC reporting requirements to properly address
complex U.S. GAAP accounting issues and to prepare and review our consolidated financial statements and related disclosures to fulfill
U.S. GAAP and SEC financial reporting requirements, (ii) formal internal control policies and internal independent supervision functions
to establish formal risk assessment process and internal control framework, and (iii) sufficient controls designed and implemented in
IT environment and IT general control activities, which are mainly associated with areas of logical access management, change management,
computer operation, service organization management as well as cyber security management. We will devote resources to remediate these
material weaknesses as we grow and such resources required for implementing proper internal controls for financial reporting are available.
Our management performed additional analysis as deemed necessary to ensure that our unaudited condensed consolidated financial statements
included in this Report were prepared in accordance with U.S. GAAP. Accordingly, management believes that the unaudited condensed consolidated financial
statements included in this Report present fairly, in all material respects, our financial position, results of operations and cash flows
of the periods presented.
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. Because of the inherent limitations in all disclosure controls and procedures, no evaluation
of disclosure controls and procedures can provide absolute assurance that we have detected all our control deficiencies and instances
of fraud, if any. The design of disclosure controls and procedures also is based partly on certain assumptions about the likelihood of
future events, and there can be no assurance that any design will succeed in achieving its stated goals under all potential future conditions.
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PART II - Other Information
Item 1. Legal Proceedings.
From time to time, we may be subject to legal
proceedings arising in the ordinary course of business. Regardless of the outcome of any existing or future litigation, litigation can
have an adverse impact on us because of defense and settlement costs, diversion of management resources, and other factors.