What changed in this filing

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Item 4. Controls and Procedures

2023-05-10 compared with 2022-11-14 · 53 added, 29 removed, 10 unchanged (89% of the section changed)

Controls and Procedures.

management is responsible for establishing and maintaining adequate internal control over financial reporting as defined in Rules 13a-15(f)

and 15d-15(f) under the Exchange Act.

Our management is also required to assess and report on the effectiveness of our internal control

over financial reporting in accordance with Section 404 of the Sarbanes-Oxley Act of 2002 (“Section 404”).

Our internal control

over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the

preparation of financial statements for external purposes of accounting principles generally accepted in the United States.

assessed the effectiveness of our internal control over financial reporting as of September 30, 2022.

In making this assessment, we used

the criteria set forth by the Committee of Sponsoring Organizations of the Treadway Commission (COSO) in Internal Control - Integrated

Framework in the 2013 COSO framework.

Based on this assessment, management concluded that our disclosure controls and procedures were

not effective as of September 30, 2022 for the reasons stated in our Annual Report on Form 10-K for the year ended December 31, 2021.

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.

A significant deficiency is a deficiency, or a combination of deficiencies, in internal control over financial reporting

that is less severe than a material weakness, yet important enough to merit attention by those responsible for oversight of the company’s

financial reporting.

of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements.

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 and procedures may deteriorate.

of Disclosure Controls and Procedures

management, with the participation of our Chief Executive Officer and our Chief Financial Officer, has evaluated the effectiveness of

our disclosure controls and procedures (as such term is defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act) as of the end

of the period covered by this Interim Report to ensure that the information required to be disclosed by the 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 SEC rules

and forms, and that information required to be disclosed in the reports we file or submit under the Exchange Act is accumulated and communicated

to our management, including our Chief Executive Officer and Chief Financial Officer, to allow timely decisions regarding required disclosures.

Based on this evaluation, our management concluded that our disclosure controls and procedures were not effective at the reasonable assurance

level as of March 31, 2023 due to the following material weaknesses.

Weaknesses in Internal Control and Plan for Remediation

on its evaluation, management identified material weaknesses in internal control over financial reporting.

These material weaknesses

material weakness related to the application and interpretation of generally accepted accounting principles (“GAAP”)

that resulted in errors in four specific accounting areas, including consolidation, impairment of digital assets, disposal of property

and equipment and principal versus agent considerations in revenue recognition.

material weakness related to the design and implementation of user access controls to ensure

appropriate segregation of duties, or program change management controls for certain financially relevant systems impacting the Company’s

processes around revenue recognition and digital assets to ensure that IT program and data changes affecting the Company’s

(i) financial IT applications, (ii) digital currency mining equipment, and (iii) underlying accounting records, are identified, tested,

authorized and implemented appropriately to validate that data produced by its relevant IT system(s) were complete and accurate.

Automated process-level controls and manual controls that are dependent upon the information derived from such financially relevant

systems were also determined to be ineffective as a result of such deficiency.

material weakness related to the ineffective design of a key

manual control to detect material misstatements in revenue.

material weaknesses create a reasonable possibility that a material misstatement to our consolidated financial statements or disclosures

would not be prevented or detected on a timely basis.

Board of Directors and management take internal control over financial reporting and the integrity of our financial statements seriously.

Management continues to work to improve its controls related to the material weaknesses described above.

Management will continue to

implement measures to remediate the material weaknesses, such that these controls are designed, implemented, and operating effectively.

In order to achieve the timely implementation of the above, Management has commenced the following actions and will continue to assess

additional opportunities for remediation on an ongoing basis:

the process we started during 2022 of adding to our internal resources to enhance our capabilities in the areas of technical accounting,

financial reporting, and internal controls, including a full time person dedicated to internal controls

the process started during 2022 of utilizing external third-party technical accounting resources to supplement our ability to interpret

and apply GAAP as we continue to build our internal capabilities in these areas

to utilize external third-party audit and SOX 404 implementation firms to enable the Company to improve the Company’s controls

related to our material weaknesses.

to evaluate existing processes and implement new processes and controls where necessary in connection with remediating our material

weaknesses, such that these controls are designed,

implemented, and operating effectively

recognize that the material weaknesses in our internal control over financial reporting will not be considered remediated until the remediated

controls operate for a sufficient period of time and can be tested and concluded by management to be designed and operating effectively.

Because our remediation efforts are ongoing, we cannot provide any assurance that these remediation efforts will be successful or that

our internal control over financial reporting will be effective as a result of these efforts.

continue to evaluate and work to improve our internal control over financial reporting related to the identified material weaknesses,

and management may determine to take additional measures to address control deficiencies or determine to modify the remediation plan

described above.

In addition, we will report the progress and status of the above remediation efforts to the Audit Committee on a periodic

part of our ongoing program to implement changes and further improve our internal controls and in conjunction with our Code of Ethics,

6 unchanged sentences

in Internal Controls.

have been changes in our internal control over financial reporting during the quarter ended September 30, 2022 that have materially affected,

or are reasonably likely to materially affect, our internal controls over financial reporting.

have created a position of Assistant Controller to support our Chief Accounting Officer and his staff which position was filled in July

We are also undertaking an exhaustive review process of our outside internal controls consultants and bringing in additional resources

to support our efforts to continue remediation of our internal controls.

have been no changes in our internal control over financial reporting during the quarter ended March 31, 2023 that have materially

affected, or are reasonably likely to materially affect, our internal controls over financial reporting other than the ongoing remediation efforts undertaken by management.

have engaged accounting consultants to aid us in remediating the issues identified in our Form 10-K for 2022 to ensure consistent and

appropriate financial reporting in those areas identified.

II - OTHER INFORMATION

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