Item 4. Controls and Procedures
Item
4. Controls and Procedures.
Evaluation
of Disclosure Controls and Procedures
As
of September 30, 2025, our management, with the participation of our Chief Executive Officer and Chief Financial Officer, evaluated the
effectiveness of our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act
of 1934). Based on this evaluation, our Chief Executive Officer and Chief Financial Officer concluded that our disclosure controls and
procedures were not effective as of September 30, 2025, due to the material weakness described below.
Description
of Material Weakness
Management
identified a material weakness in our internal control over financial reporting. Specifically, the Company did not maintain sufficient
resources with appropriate accounting expertise to adequately review and account for complex, non-routine transactions. This control
deficiency could result in a material misstatement of the Company’s annual or interim financial statements that may not be prevented
or detected on a timely basis.
Plan
for Remediation
To
remediate this material weakness, management is implementing the following measures:
●
Hiring
additional accounting personnel with appropriate technical expertise;
●
Enhancing
internal review procedures for complex transactions;
●
Providing
targeted training to existing finance staff on U.S. GAAP and SEC reporting requirements;
●
Upgrading
to NetSuite’s enterprise resource program; and
●
Change
of independent registered audit firm.
Management
expects these remediation efforts to be completed during fiscal year 2025, subject to the timing of hiring and training.
Changes
in Management
Subsequent
to September 30, 2025, the Company’s board of directors approved changes in senior management, including the appointment of a new
President and changes to the composition of the Board and Audit Committee. Management is currently evaluating the impact of these leadership
changes on the Company’s internal control environment and will disclose any material effects on internal control over financial
reporting in future filings.
Changes
in Internal Control Over Financial Reporting
There
were no changes in our internal control over financial reporting during the quarter ended September 30, 2025, that have materially affected,
or are reasonably likely to materially affect, our internal control over financial reporting, other than the remediation measures described
above.
38
PART
II—OTHER INFORMATION
Item
1. Legal Proceedings.
None.
Item
1A. Risk Factors.
Except
with respect to the Company’s on-going liquidity needs, there were no material changes in the risk factors we previously disclosed
in Item 1A to Part I of our Annual Report on Form 10-K for the fiscal year ended December 31, 2024, filed with the SEC on April 1, 2025.
Text extracted from the filing as submitted to EDGAR. Formatting, tables and exhibits are simplified for reading; the original document is authoritative for anything you rely on.