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Item 4. Controls and Procedures

2023-11-13 compared with 2023-05-30 · 82 added, 96 removed, 19 unchanged (90% of the section changed)

1 unchanged sentence

Controls and Procedures

the end of the period covered by this Quarterly Report on Form 10-Q for the quarter ended March 31, 2023, an evaluation was carried

out under the supervision of and with the participation of our management, including the CEO and the Chief Financial Officer (“CFO”),

of the effectiveness of the design and operations of our disclosure controls and procedures (as defined in Rule 13a-15(e) and

Rule 15d-15(e) under the Exchange Act).

Based on that evaluation, the CEO and the CFO have concluded that, as of the end of the

period covered by this Quarterly Report, our disclosure controls and procedures were not effective due to the material weaknesses

in internal control over financial reporting described below.

the end of the period covered by this Quarterly Report on Form 10-Q for the quarter ended September 30, 2023, an evaluation was

carried out under the supervision of and with the participation of our management, including the CEO and the Chief Financial Officer

(“CFO”), of the effectiveness of the design and operations of our disclosure controls and procedures (as defined in

Rule 13a-15(e) and Rule 15d-15(e) under the Exchange Act).

Based on that evaluation, the CEO and the CFO have concluded that,

as of the end of the period covered by this Quarterly Report, our disclosure controls and procedures were not effective due to

the material weaknesses in internal control over financial reporting described below.

Company’s disclosure controls and procedures have been designed to ensure that:

1 unchanged sentence

by us in reports that we file or submit to the SEC under the Exchange Act is recorded, processed, summarized, and reported within

the time periods specified in applicable rules and forms and (ii) material information required

to be disclosed in our reports filed under the Exchange Act is accumulated and communicated to management, including the CEO and

the CFO, as appropriate, to allow for accurate and timely decisions regarding required disclosure.

the time periods specified in applicable rules and forms and (ii) material information required to be disclosed in our reports

filed under the Exchange Act is accumulated and communicated to management, including the CEO and the CFO, as appropriate, to

allow for accurate and timely decisions regarding required disclosure.

does not expect that our disclosure controls and procedures will prevent all error and all fraud.

3 unchanged sentences

implementing, and evaluating controls and procedures and the assumptions used in identifying the likelihood of future events.

Weaknesses in Internal Control over Financing Reporting Existing as of March 31, 2023

Weaknesses in Internal Control over Financing Reporting Existing as of September 30, 2023

material weakness is a deficiency, or a combination of deficiencies, in internal control over financial reporting, such that there

1 unchanged sentence

prevented or detected on a timely basis.

Management concluded that the previously

disclosed material weakness relating to the Company’s controls over the accounting for non-routine transactions continued to

exist as of March 31, 2023.

Specifically, such controls were not adequately designed to ensure the consideration of all related

relevant accounting guidance when such transactions were recorded.

As disclosed in the Company’s Amendment No.

10-K/A to its Annual Report on Form 10-K for the fiscal year ended June 30, 2022, and in the Company’s Quarterly Reports on

Form 10-Q for the quarterly periods ended September 30, 2022 and December 31, 2022, this material weakness resulted in the

restatement of the Company’s consolidated financial statements as of and for the fiscal years ended June 30, 2022 and 2021 as

well as the restatement of the Company’s condensed consolidated financial statements as of and for the interim periods ended

September 30, 2021, December 31, 2021, and March 31, 2022.

The Company identified an additional error

during the quarter ended March 31, 2023 relating to the accounting treatment of the Lind Consent.

The error will require the restatement

of the Company’s condensed consolidated financial statements as of and for the periods ended September 30, 2022 and December

31, 2022, as discussed in Note 3.

The Company determined that the error was partially caused by the same material weakness that

existed as of June 30, 2022, September 30, 2022 and December 31, 2022.

The material weakness discussed above continued to exist

as of March 31, 2023.

In addition to the material weakness discussed above, our management concluded that three other material

weaknesses in internal control over financial reporting existed as of March 31, 2023.

A cumulative listing of our material weaknesses

is disclosed below:

● Control Environment:

concluded that the material weaknesses disclosed in the Company’s Annual Report on Form 10-K for the fiscal year ended June

30, 2023 continued to exist as of September 30, 2023.

Specifically, management concluded that the following material weaknesses

exist as of September 30, 2023:

Management did not design and maintain an effective control environment

based on the criteria established by the Committee of Sponsoring Organizations Integrated Framework (2013) (“COSO Framework”).

Specifically, the Company does not have sufficient personnel with the appropriate levels of knowledge, experience, and training

in accounting and internal controls over financial reporting commensurate with the complexity of the Company’s business.

This material weakness contributed to additional material weaknesses related to the Company’s control activities as further

described below.

● Risk Assessment:

Management did not design and maintain effective controls over the risk

assessment process.

Specifically, management does not have a formal process to identify, update, and assess risks due to changes

in the Company’s business practices, including entering into increasingly complex transactions that could significantly impact

the design and operation of the Company’s control activities.

● Control Activities:

Management did not design and maintain effective controls, including

management review controls, related to non-routine transactions.

Specifically, management did not maintain effective controls over

monitoring and assessing the work of third-party specialists, including the evaluation of the appropriateness of accounting conclusions

that has resulted in misstatements.

In addition, the Company did not design and maintain effective controls related to the evaluation

of certain inputs and assumptions used to estimate the fair value of instruments and features associated with complex debt and

equity transactions.

Finally, management did not have policies and procedures for the reconsideration of existing agreements when

infrequent transactions occur.

● Monitoring Activities:

Management did not design and maintain effective monitoring controls

to support timely evaluation of remediation of identified internal control deficiencies.

Additionally, these material weaknesses

could result in a misstatement of the account balances or disclosures that would result in a material misstatement to the annual

or interim consolidated financial statements that would not be prevented or timely detected.

based on the criteria established by the Committee of Sponsoring Organizations Integrated

Framework (2013) (“COSO Framework”).

Specifically, the Company does not have

sufficient personnel with the appropriate levels of knowledge, experience, and training

in accounting and internal control over financial reporting commensurate with the complexity

of the Company’s business.

This material weakness contributed to additional material

weaknesses related to the Company’s control activities as further described below.

Management did not design and maintain effective controls over the risk assessment

Specifically, management does not have a formal process to identify, update,

and assess risks due to changes in the Company’s business practices, including

entering into increasingly complex transactions that could significantly impact the design

and operation of the Company’s control activities.

Management did not design and maintain effective controls, including management

review controls, related to non-routine transactions.

Specifically, management did not

maintain effective controls over monitoring and assessing the work of third-party specialists,

including the evaluation of the appropriateness of accounting conclusions that has resulted

in misstatements.

In addition, the Company did not design and maintain effective controls

related to the evaluation of certain inputs and assumptions used to estimate the fair

value of instruments and features associated with complex debt and equity transactions.

Finally, management did not have policies and procedures for the reconsideration of existing

agreements when infrequent transactions occur.

Management did not design and maintain effective monitoring controls to support

timely evaluation of remediation of identified internal control deficiencies.

previously disclosed, these material weaknesses were initially identified at various points during the fiscal year ended June

30, 2023 in connection with the Company’s normal quarterly close and review procedures, and certain of these material weaknesses

resulted in errors that required the restatement of Company’s consolidated financial statements as of and for the fiscal

years ended June 30, 2022 and 2021, as well as the restatement of the Company’s condensed consolidated financial statements

as of and for the interim periods ended September 30, 2021, December 31, 2021, March 31, 2022, September 30, 2022 and December

Additionally, these material weaknesses could result in a misstatement of the account balances or disclosures that would

result in a material misstatement to the annual or interim consolidated financial statements that would not be prevented or timely

Plan for the Material Weaknesses

To address our material weaknesses identified

during the quarter ended March 31, 2023, we are currently devising a detailed plan to address each individual material weakness

identified, as well as the overall monitoring process, including the following:

● In order to remediate the material weaknesses relating to the Company’s control environment

and risk assessment process, we plan to develop and implement controls to ensure work performed by Company personnel and other

experts is reviewed by individuals with the appropriate level of U.S.

address our material weaknesses existing as of September 30, 2023, we are currently devising a detailed plan to address each individual

material weakness identified, as well as the overall monitoring process, including the following:

order to remediate the material weaknesses relating to the Company’s control environment

and risk assessment process, we plan to develop and implement controls to ensure work

performed by Company personnel and other experts is reviewed by individuals with the

appropriate level of U.S.

GAAP knowledge and experience.

This may include separating

the performance and review of certain close procedures among current accounting personnel and/or engaging third party accounting

consultants with the requisite U.S.

GAAP knowledge and experience to perform work under the control and oversight of Company personnel.

In addition, we plan to enhance the design of our controls over the consideration of all related relevant accounting guidance for

the initial recording and subsequent measurements of non-routine transactions.

● In order to remediate the material weakness relating to the Company’s controls activities,

we are in the process of designing and implementing controls over the completeness and accuracy of identifying and adequately assessing

the assumptions utilized in the valuation analysis of complex financial instruments, as well as engaging third party consultants

with the relevant background and expertise to perform the appropriate complex valuation analyses under the control and oversight

of Company personnel.

● In order to remediate the material weakness relating to the Company’s controls over monitoring

activities, we plan to design and implement controls to manage and monitor our progress towards the remediation of internal control

deficiencies and material weaknesses, including oversight by, and periodic reporting to, the Audit Committee.

The process of designing and maintaining

effective internal control over financial reporting is a continuous effort that requires management to anticipate and react to

changes in our business, economic and regulatory environments and to expend significant resources.

As we continue to evaluate our

internal control over financial reporting, we may take additional actions to remediate the material weaknesses or modify the remediation

actions described above.

While we continue to devote significant

time and attention to these remediation efforts, the material weaknesses will not be considered remediated until management completes

the design and implementation of the actions described above and the controls operate for a sufficient period of time, and management

has concluded, through testing, that these controls are effective.

the performance and review of certain close procedures among current accounting personnel

and/or engaging third party accounting consultants with the requisite U.S.

GAAP knowledge

and experience to perform work under the control and oversight of Company personnel.

In addition, we plan to enhance the design of our controls over the consideration of

all related relevant accounting guidance for the initial recording and subsequent measurements

of non-routine transactions.

order to remediate the material weakness relating to the Company’s controls activities,

we are in the process of designing and implementing controls over the completeness and

accuracy of identifying and adequately assessing the assumptions utilized in the valuation

analysis of complex financial instruments, as well as engaging third party consultants

with the relevant background and expertise to perform the appropriate complex valuation

analyses under the control and oversight of Company personnel.

order to remediate the material weakness relating to the Company’s controls over

monitoring activities, we plan to design and implement controls to manage and monitor

our progress towards the remediation of internal control deficiencies and material weaknesses,

including oversight by, and periodic reporting to, the Audit Committee.

assist us in devising and implementing our remediation plan, we have recently engaged a third-party consulting firm.

process of designing and maintaining effective internal control over financial reporting is a continuous effort that requires

management to anticipate and react to changes in our business, economic and regulatory environments and to expend significant

As we continue to evaluate our internal control over financial reporting, we may take additional actions to remediate

the material weaknesses or modify the remediation actions described above.

we continue to devote significant time and attention to these remediation efforts, the material weaknesses will not be considered

remediated until management completes the design and implementation of the actions described above and the controls operate for

a sufficient period of time, and management has concluded, through testing, that these controls are effective.

in Internal Control over Financial Reporting

Other than as discussed above, there have

been no changes in the Company’s internal control over financial reporting during the three months ended March 31, 2023,

that have materially affected, or are reasonably likely to materially affect, the Company’s internal control over financial

than as discussed above, there have been no changes in the Company’s internal control over financial reporting during the

three months ended September 30, 2023, that have materially affected, or are reasonably likely to materially affect, the Company’s

internal control over financial reporting.

— 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