7 unchanged sentences
As of the period covered by this Quarterly Report on Form 10-Q, an evaluation was conducted under the supervision and with the participation of our management, including our Chief Executive Officer and Chief Financial Officer, of the effectiveness of our disclosure controls and procedures (as defined in Rule 13a-15(e) and Rule 15d-15(e) of the Exchange Act).
−Removed: Our management concluded that as of September 30, 2023, our disclosure controls and procedures were not effective because of the material weaknesses in our internal control over financial reporting identified by management as of December 31, 2022 (described below).
+Added: Our management concluded that as of March 31, 2024, our disclosure controls and procedures were not effective because of the material weaknesses in our internal control over financial reporting identified by management as of December 31, 2023 (described below).
A material weakness is a deficiency, or a combination of deficiencies, in internal control over financial reporting such that a reasonable possibility exists that a material misstatement of our annual or interim financial statements would not be prevented or detected on a timely basis.
2 unchanged sentences
Disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) of the Exchange Act are controls and other procedures designed to ensure that information required to be disclosed in our reports under the Exchange Act is recorded, processed, summarized, and reported within the time periods specified in the rules and forms of the SEC, and that such information is accumulated and communicated to our management to allow timely decisions regarding required disclosure.
−Removed: As of September 30, 2023, an evaluation was conducted under the supervision and with the participation of our management, including our Chief Executive Officer and Chief Financial Officer, of the effectiveness of our disclosure controls and procedures (as defined in Rule 13a-15(e) and Rule 15d-15(e) of the Exchange Act).
−Removed: Our management concluded that as of September 30, 2023, our disclosure controls and procedures were not effective because of the material weaknesses in our internal control over financial reporting described below.
+Added: As of March 31, 2024, an evaluation was conducted under the supervision and with the participation of our management, including our Chief Executive Officer and Chief Financial Officer, of the effectiveness of our disclosure controls and procedures (as defined in Rule 13a-15(e) and Rule 15d-15(e) of the Exchange Act).
+Added: Our management concluded that as of March 31, 2024, our disclosure controls and procedures were not effective because of the material weaknesses in our internal control over financial reporting described below.
Management's Report on Internal Control Over Financial Reporting
8 unchanged sentences
Management conducted an evaluation of the effectiveness of the Company's internal control over financial reporting using the criteria in Internal Control - Integrated Framework 2013 issued by the Committee of Sponsoring Organizations of the Treadway Commission (the “COSO Framework”).
−Removed: As a result of this evaluation, management concluded that the Company’s internal control over financial reporting was not effective as of September 30, 2023 because of the material weaknesses in internal control over financial reporting discussed below.
+Added: As a result of this evaluation, management concluded that the Company's internal control over financial reporting was not effective as of March 31, 2024 because of the material weaknesses in internal control over financial reporting discussed below.
• Control Environment:
17 unchanged sentences
• Inadequate segregation of duties within human resources, manual journal entry posting processes, and various bank accounts of the Company to prevent and detect unauthorized transactions in a timely manner.
−Removed: While these material weaknesses did not result in material misstatements of the Company’s consolidated financial statements as of and for the year ended December 31, 2022,and management does not believe that these material weaknesses resulted in material misstatements as of September 30, 2023, these material weaknesses create a reasonable possibility that a material misstatement of account balances or disclosures in annual or interim consolidated financial statements may not be prevented or detected in a timely manner.
+Added: While these material weaknesses did not result in material misstatements of the Company's Condensed Consolidated Financial Statements as of and for the year ended December 31, 2023, and management does not believe that these material weaknesses resulted in material misstatements as of March 31, 2024, these material weaknesses create a reasonable possibility that a
+Added: material misstatement of account balances or disclosures in annual or interim consolidated financial statements may not be prevented or detected in a timely manner.
The Company's independent registered public accounting firm, Grant Thornton LLP, which audited the 2023 consolidated financial statements included in the Form 10-K, has expressed an adverse opinion on the Company's internal control over financial reporting.
1 unchanged sentence
Our management is committed to remediating identified control deficiencies (including both those that rise to the level of a material weakness and those that do not), fostering continuous improvement in our internal controls, and enhancing our overall internal controls environment.
−Removed: Through the full year of 2023, the Company initiated and will continue efforts toward implementation of certain steps in its remediation plan, including:
−Removed: • Engaged a third-party CPA firm to assist with the redesign of the Sarbanes-Oxley program inclusive of entity-level controls.
−Removed: • Created and staffed a controls compliance analyst charged with monitoring and facilitating compliance with the Company’s responsibilities under the Sarbanes Oxley Act of 2002 (“SOX”).
+Added: We initiated many of our control remediation efforts in fiscal 2022, and these efforts have continued through 2024, including:
+Added: • Engaged a third-party specialist CPA firm to consult with management in redesigning and documenting of our internal controls over financial reporting, including our entity-level controls, to be compliant with Sarbanes Oxley Act of 2002 ("SOX").
+Added: • Hired a dedicated controls compliance manager charged with monitoring and facilitating compliance with the Company's responsibilities under SOX in coordination with the third-party specialist.
• Implemented a global risk and compliance software to assist in monitoring and documenting compliance with SOX.
−Removed: • For certain processes, developed new and revised existing process narratives and identified risks inherent to those processes.
−Removed: • Developed new controls and revised the design of existing controls for a significant number of relevant key controls to mitigate the aforementioned risks, inclusive of general information technology controls and entity-level controls.
−Removed: • Certain business functions have been restructured or consolidated to align more closely with effective business operation as well as to enable appropriate segregation of duties.
−Removed: The following activities are scheduled to be completed or have been ongoing throughout 2023 in anticipation of conducting management’s testing that is ongoing or will occur in 2023 to support the issuance of management’s assessment of internal control over financial reporting as of December 31, 2023:
−Removed: • Conduct initial organization-wide training sessions with all control owners.
−Removed: • Implementation of new business systems to support information technology general controls.
−Removed: • Completion of the identification of risks arising from inappropriate segregation of duties and fraud risks.
−Removed: • Completion of risk assessment and control design for the remaining populations of processes and controls.
−Removed: • Implementation of controls across all financial reporting processes and information technology environments.
−Removed: • Development of effective communication plans relating to, among other things, identification of deficiencies and recommendations for corrective actions.
−Removed: These plans will apply to all parties responsible for remediation.
−Removed: • Implement periodic compliance reports are made to the Nominating and Governance Committee of the Board of Directors.
−Removed: • Ongoing training with control owners, as necessary.
−Removed: • Ongoing migration of certain components of a legacy information technology system onto a common information technology environment, including risk assessment, control design and implementation of new and revised controls.
+Added: • Made significant progress related to our control design and assessment, including the identification of risks arising from inappropriate segregation of duties and fraud risks and the development of new controls and revised the design of existing controls to mitigate the aforementioned risks, inclusive of entity-level controls.
+Added: • For certain processes, developed new and revised existing process narratives and flowcharts and identified risks inherent to those processes.
+Added: • Conducted training sessions with control owners.
+Added: • Restructured or consolidated certain business functions to align more closely with effective business operation as well as to enable appropriate segregation of duties.
+Added: • Implemented new business systems, including an enterprise resource planning software system, to support information technology general controls, appropriate segregation of duties, appropriate journal entry posting processes, change management, and user access.
+Added: • Added personnel to the accounting and financial reporting department with technical accounting experience to act as internal resources for reviewing complex financial reporting transactions, including areas such as business combinations, share based compensation, and income tax reporting.
+Added: • Continue to engage third party specialists to assist management with complex financial transactions and valuations, including valuation model techniques and inputs such as forecasted, prospective financial information.
+Added: The following remaining activities are scheduled to occur during our fiscal year 2024 in support of issuing management's assessment of internal control over financial reporting as of December 31, 2024:
+Added: • Testing design and operating effectiveness of newly implemented controls across all financial reporting processes and information technology environments.
+Added: • Finalization of risk assessments, control design, and implementation of new and revised controls, inclusive of general information technology controls and entity-level controls, as necessary.
+Added: • Ongoing training with control owners.
+Added: • Developing effective communication plans to all parties responsible for remediation relating to, among other things, identification of deficiencies and recommendations for corrective actions.
+Added: • Providing periodic compliance reports to the Audit Committee of the Board of Directors.
Our management believes that these remediation actions, when fully implemented, will remediate the material weaknesses we have identified and strengthen our internal control over financial reporting.
−Removed: Our remediation efforts are ongoing and additional
−Removed: remediation initiatives may be necessary.
−Removed: We will continue our initiatives to implement and document the strengthening of existing, and development of new policies, procedures, and internal controls.
−Removed: Remediation of the identified material weaknesses and strengthening our internal control environment will require a substantial effort throughout 2023.
+Added: However, our remediation efforts are ongoing and additional remediation initiatives may be necessary.
+Added: We will continue to implement and document the strengthening of existing and the development of new policies, procedures, and internal controls.
+Added: Remediation of the identified material weaknesses and strengthening our internal control environment has required and will continue to require a substantial effort throughout 2024.
We will test the ongoing operating effectiveness of the new and existing controls in future periods.
−Removed: The material weaknesses cannot be considered completely remediated until the applicable controls have operated for a sufficient period of time and management has concluded, through testing, that these controls are operating effectively.
+Added: The material weaknesses cannot be considered completely remediated until the applicable
+Added: controls have operated for a sufficient period of time and management has concluded, through testing, that these controls are operating effectively.
While we believe the steps taken to date and those planned for implementation will remediate the ineffectiveness of our internal control over financial reporting, we have not completed all remediation efforts identified herein.
5 unchanged sentences
For a summary of the Company's risk factors, please refer to Item 9A of our Form 10-K for the year ended December 31, 2023.
−Removed: UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS
−Removed: DEFAULTS UPON SENIOR SECURITIES
−Removed: MINE SAFETY DISCLOSURES
−Removed: Not applicable.
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.