What changed in this filing

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Item 4. Controls and Procedures

2021-05-19 compared with 2020-11-23 · 61 added, 65 removed, 13 unchanged (91% of the section changed)

1 unchanged sentence

Controls and Procedures

conducted an evaluation, with the participation of our Chief Executive Officer and Chief Financial Officer, 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 Securities

Exchange Act of 1934, as amended, or the Exchange Act, as of September 30, 2020, to ensure that information required to

be disclosed by us in the reports filed or submitted by us under the Exchange Act is recorded, processed, summarized and reported,

within the time periods specified in the Securities Exchange Commission’s rules and forms, including to ensure that information

required to be disclosed by us in the reports filed or submitted by us under the Exchange Act is accumulated and communicated

to our management, including our principal executive and principal financial officer, or persons performing similar functions,

as appropriate to allow timely decisions regarding required disclosure.

Based on that evaluation, our Chief Executive Officer

and Chief Financial Officer have concluded that as of September 30, 2020, our disclosure controls and procedures were not effective

at the reasonable assurance level due to the material weaknesses identified and described below.

conducted an evaluation, with the participation of our Chief Executive Officer and Chief Financial Officer, 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 Securities Exchange

Act of 1934, as amended, or the Exchange Act, as of March 31, 2020, to ensure that information required to be disclosed by us in the

reports filed or submitted by us under the Exchange Act is recorded, processed, summarized and reported, within the time periods specified

in the Securities Exchange Commission’s rules and forms, including to ensure that information required to be disclosed by us in

the reports filed or submitted by us under the Exchange Act is accumulated and communicated to our management, including our principal

executive and principal financial officer, or persons performing similar functions, as appropriate to allow timely decisions regarding

required disclosure.

Based on that evaluation, our Chief Executive Officer and Chief Financial Officer have concluded that as of March

31, 2021, our disclosure controls and procedures were not effective at the reasonable assurance level due to the material weaknesses

identified and described below.

principal executive officers do not expect that our disclosure controls or internal controls will prevent all error and all fraud.

Although our disclosure controls and procedures were designed to provide reasonable assurance of achieving their objectives and

our principal executive officers have determined that our disclosure controls and procedures are effective at doing so, a control

system, no matter how well conceived and operated, can provide only reasonable, not absolute assurance that the objectives of

the system are met.

Further, the design of a control system must reflect the fact that there are resource constraints, and the

benefits of controls must be considered relative to their costs.

Because of the inherent limitations in all control systems, no

evaluation of controls can provide absolute assurance that all control issues and instances of fraud, if any, within the Company

have been detected.

These inherent limitations include the realities that judgments in decision-making can be faulty, and that

breakdowns can occur because of simple error or mistake.

Additionally, controls can be circumvented if there exists in an individual

a desire to do so.

There can be no assurance that any design will succeed in achieving its stated goals under all potential future

our disclosure controls and procedures were designed to provide reasonable assurance of achieving their objectives and our principal

executive officers have determined that our disclosure controls and procedures are effective at doing so, a control system, no matter

how well conceived and operated, can provide only reasonable, not absolute assurance that the objectives of the system are met.

the design of a control system must reflect the fact that there are resource constraints, and the benefits of controls must be considered

relative to their costs.

Because of the inherent limitations in all control systems, no evaluation of controls can provide absolute assurance

that all control issues and instances of fraud, if any, within the Company have been detected.

These inherent limitations include the

realities that judgments in decision-making can be faulty, and that breakdowns can occur because of simple error or mistake.

Additionally,

controls can be circumvented if there exists in an individual a desire to do so.

There can be no assurance that any design will succeed

in achieving its stated goals under all potential future conditions.

Plan to Address the Material Weaknesses in Internal Control over Financial Reporting

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.

Management identified the following three material weaknesses that have caused management to conclude

that, as of September 30, 2020, our disclosure controls and procedures, and our internal control over financial reporting, were

not effective at the reasonable assurance level:

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.

Management identified the following three material weaknesses that have caused management to conclude that, as of

March 31, 2021, our disclosure controls and procedures, and our internal control over financial reporting, were not effective at the

reasonable assurance level:

do not have written documentation of our internal control policies and procedures.

Written documentation of key internal controls

over financial reporting is a requirement of Section 404 of the Sarbanes-Oxley Act as of the period ending September 30, 2020.

Management evaluated the impact of our failure to have written documentation of our internal controls and procedures on our

assessment of our disclosure controls and procedures and has concluded that the control deficiency that resulted represented

a material weakness.

over financial reporting is a requirement of Section 404 of the Sarbanes-Oxley Act as of the period ending March 31, 2021.

evaluated the impact of our failure to have written documentation of our internal controls and procedures on our assessment of our

disclosure controls and procedures and has concluded that the control deficiency that resulted represented a material weakness.

do not have sufficient segregation of duties within accounting functions, which is a basic internal control.

Due to our size

and nature, segregation of all conflicting duties may not always be possible and may not be economically feasible.

to the extent possible, the initiation of transactions, the custody of assets and the recording of transactions should be

performed by separate individuals.

Management evaluated the impact of our failure to have segregation of duties on our assessment

of our disclosure controls and procedures and has concluded that the control deficiency that resulted represented a material

Due to our size and

nature, segregation of all conflicting duties may not always be possible and may not be economically feasible.

However, to the extent

possible, the initiation of transactions, the custody of assets and the recording of transactions should be performed by separate

Management evaluated the impact of our failure to have segregation of duties on our assessment of our disclosure controls

and procedures and has concluded that the control deficiency that resulted represented a material weakness.

controls over the control environment were not maintained.

Specifically, a formally adopted written code of business conduct

and ethics that governs our employees, officers, and directors was not in place.

Additionally, management has not developed

and effectively communicated to employees its accounting policies and procedures.

Specifically, a formally adopted written code of business conduct and

ethics that governs our employees, officers, and directors was not in place.

Additionally, management has not developed and effectively

communicated to employees its accounting policies and procedures.

This has resulted in inconsistent practices.

Further, our Board of Directors does not currently have any independent members and no director qualifies as an audit committee

financial expert as defined in Item 407(d)(5)(ii) of Regulation S-K.

Since these entity level programs have a pervasive effect

across the organization, management has determined that these circumstances constitute a material weakness.

address these material weaknesses, management performed additional analyses and other procedures to ensure that the financial

statements included herein fairly present, in all material respects, our financial position, results of operations and cash flows

for the periods presented.

Accordingly, we believe that the financial statements included in this report fairly present, in all

material respects, our financial condition, results of operations and cash flows for the periods presented.

remediate the material weakness in our documentation, evaluation and testing of internal controls we plan to engage a third-party

firm to assist us in remedying this material weakness once resources become available.

intend to remedy our material weakness with regard to insufficient segregation of duties by hiring additional employees in order

to segregate duties in a manner that establishes effective internal controls once resources become available.

Further, our Board

of Directors does not currently have any independent members and no director qualifies as an audit committee financial expert as

defined in Item 407(d)(5)(ii) of Regulation S-K.

Since these entity level programs have a pervasive effect across the organization,

management has determined that these circumstances constitute a material weakness.

address these material weaknesses, management performed additional analyses and other procedures to ensure that the financial statements

included herein fairly present, in all material respects, our financial position, results of operations and cash flows for the periods

Accordingly, we believe that the financial statements included in this report fairly present, in all material respects, our

financial condition, results of operations and cash flows for the periods presented.

remediate the material weakness in our documentation, evaluation and testing of internal controls we plan to engage a third-party firm

to assist us in remedying this material weakness once resources become available.

intend to remedy our material weakness with regard to insufficient segregation of duties by hiring additional employees in order to segregate

duties in a manner that establishes effective internal controls once resources become available.

in Internal Control over Financial Reporting

change in our system of internal control over financial reporting occurred during the period covered by this report, the period

ended September 30, 2020, that has materially affected, or is reasonably likely to materially affect, our internal control over

financial reporting.

change in our system of internal control over financial reporting occurred during the period covered by this report, the period ended

March 31, 2021, that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

OTHER INFORMATION

1 unchanged sentence

are not a party to any pending legal proceeding.

We are not aware of any pending legal proceeding to which any of our officers,

directors, or any beneficial holders of 5% or more of our voting securities are adverse to us or have a material interest adverse

our cannabis operations, see risk factors included in our Annual Report on Form 10-K for the year ended December 31, 2019 filed

on May 14, 2020.

We are not aware of any pending legal proceeding to which any of our officers, directors,

or any beneficial holders of 5% or more of our voting securities are adverse to us or have a material interest adverse to us.

our cannabis operations, see risk factors included in our Annual Report on Form 10-K for the year ended December 31, 2020 filed on April

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