Item 4. Controls and Procedures
Item
4. Controls and Procedures
Evaluation
of Disclosure Controls and Procedures
We
maintain disclosure controls and procedures (as that term is defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act
of 1934, as amended (the “Exchange Act”)) that are 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 SEC’s rules and
forms, and that such information is accumulated and communicated to our management, including our chief executive officer and chief financial
officer, as appropriate, to allow timely decisions regarding required disclosures. In designing disclosure controls and procedures, our
management necessarily was required to apply its judgment in evaluating the cost-benefit relationship of possible disclosure controls
and procedures. The design of any disclosure controls and procedures also is based in part upon 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. Any controls and procedures, no matter how well designed and operated, can provide only reasonable, not absolute, assurance
of achieving the desired control objectives.
Our
management, with the participation of our chief executive officer and chief financial officer, has evaluated the effectiveness of the
design and operation of our disclosure controls and procedures as of the end of the period covered by this report. Based upon that evaluation
and subject to the foregoing, our chief executive officer and chief financial officer concluded that our disclosure controls and procedures
were not effective due to the material weaknesses in internal control over financial reporting described below.
The
ineffectiveness of the Company’s internal control over financial reporting was due to the following material weaknesses which are
indicative of many small companies with small number of staff:
(i)
inadequate
segregation of duties consistent with control objectives;
(ii)
insufficient
written policies and procedures for accounting and financial reporting with respects to the requirements and application of both
U.S. GAAP and SEC Guidelines;
(iii)
inadequate
security and restricted access to computer systems including a disaster recovery plan; and
(iv)
lack
of formal written policy for the approval, identification and authorization of related party transactions.
Management’s
Plan to Remediate the Material Weakness
Management
has been implementing and continues to implement measures designed to ensure that control deficiencies contributing to the material weaknesses
are remediated, such that these controls are designed, implemented, and operating effectively. The remediation actions planned include:
(i)
continue
to search for and evaluate qualified independent outside directors;
(ii)
the
recent addition of functioning audit committee;
(iii)
re-design
of our accounting processes and control procedures;
(iv)
identify
gaps in our skills base and the expertise of our staff required to meet the financial reporting requirements of a publicly-traded
company;
(v)
review
and improve current accounting policies and procedures and develop a thorough document detailing said policies and procedures with
respects to the requirements and application of both U.S. GAAP and SEC Guidelines; and
(vi)
identify
and remedy gaps in our security and restricted access policies to computer systems and implement a disaster recovery plan.
We
are committed to maintaining a strong internal control environment and believe that these remediation efforts will represent significant
improvements in our control environment. Our management will continue to monitor and evaluate the relevance of our risk-based approach
and the effectiveness of our internal controls and procedures over financial reporting on an ongoing basis and is committed to taking
further action and implementing additional enhancements or improvements, as necessary and as funds allow.
Management’s
report on internal control over financial reporting was not subject to attestation by the Company’s registered public accounting
firm pursuant to rules of the Securities and Exchange Commission that permit a Smaller Reporting Company to provide only Management’s
report in this interim report, which may increase the risk that weaknesses or deficiencies in our internal control over financial reporting
go undetected.
40
Changes
in Internal Control over Financial Reporting
There
were no changes in our internal control over financial reporting (as defined in Rule 13a-15(f) and 15d-15(f) under the Exchange Act)
during the quarter ended June 30, 2021 that materially affected, our internal control over financial reporting as of that date.
PART
II – OTHER INFORMATION
ITEM
1. LEGAL PROCEEDINGS
In
the ordinary course of our operations, we become involved in ordinary routine litigation incidental to the business. Material proceedings
are described under Note 8, “Commitments and Contingencies” to the unaudited condensed consolidated financial statements
included elsewhere in this Quarterly Report on Form 10-Q.