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Evaluation of Disclosure Controls and Procedures.
−Removed: Our management, including the Interim Chief Executive Officer and our Interim Chief Financial Officer, is responsible for establishing and maintaining adequate internal control over financial reporting (“ICFR”), as defined in Rule 13a-15(f) and 15d-15(f) under the Exchange Act.
+Added: Our management, including the Chief Executive Officer and our Interim Chief Financial Officer, is responsible for establishing and maintaining adequate internal control over financial reporting (“ICFR”), as defined in Rule 13a-15(f) and 15d-15(f) under the Exchange Act.
Our internal control over financial reporting is designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of the consolidated financial statements for external purposes in accordance with GAAP.
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Also, 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 or procedures may deteriorate.
−Removed: Our management conducted an evaluation of the effectiveness of the Company’s internal control over financial reporting as of September 30, 2023, based on the Internal Control – Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO).
−Removed: Based on the results of this evaluation, the Company’s management concluded that internal control over financial reporting was not effective as of September 30, 2023, due to the material weakness listed below.
+Added: Our management conducted an evaluation of the effectiveness of the Company’s internal control over financial reporting as of March 31, 2024, based on the Internal Control – Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO).
+Added: Based on the results of this evaluation, the Company’s management concluded that internal control over financial reporting was not effective as of March 31, 2024, due to the material weakness listed below.
A material weakness is a deficiency, or a combination of deficiencies, in ICFR, 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.
−Removed: Management identified a material weakness in its internal control over financial reporting at December 31, 2022, over our inventory process which still exists as of September 30, 2023.
+Added: Management identified a material weakness in its internal control over financial reporting at December 31, 2022, over our inventory process which still exists as of March 31, 2024.
Specifically, we have identified issues related to:
−Removed: (i) the classification of inventory work in progress;
−Removed: (ii) year-end physical inventory count procedures, and (iii) the process to review and approve inventory adjusting journal entries.
+Added: (i) year-end physical inventory count procedures, and (ii) the process to review and approve inventory adjusting journal entries.
After giving full consideration to this material weakness, and the additional analyses and other procedures that we performed to ensure that our condensed consolidated financial statements included herein were prepared in accordance with U.S.
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In response to the material weakness, management, with oversight of the Audit Committee of the Board of Directors, has begun the process of, and is committed to, designing and implementing effective measures to strengthen our internal controls over financial reporting and remediate the material weakness.
−Removed: Our planned internal control remediation efforts, which are underway, include:
+Added: Our planned internal control remediation efforts, which continue, include:
• We have updated and implemented new accounting policies and procedures related to work in process inventory.
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• We have hired additional management with a focus on inventory control and inventory best practices.
−Removed: • We are taking steps to limit the amount of inventory held outside of centralized warehouses.
+Added: • We are continuing to limit the amount of inventory held outside of centralized warehouses.
• We have improved and enforced our formalized inventory count and inventory adjustment processes which includes taking steps to reinforce the inventory taking procedures, proper training and supervision of warehouse staff.
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• We have added a highly qualified new member to our board of directors and expanded our audit committee
−Removed: While these actions and planned actions are subject to ongoing management evaluation and will require validation and testing of the design and operating effectiveness of internal controls over a sustained period of financial reporting cycles, we are committed to the continuous improvement of our internal control over financial reporting and will continue to diligently review our internal control over financial reporting.
+Added: We feel that the outcome of the actions discussed above have yielded favorable results to date.
+Added: We are continuing to evaluate the effectiveness of these actions and we will require additional validation and testing of the design and operating effectiveness of internal controls over a sustained period of financial reporting cycles.
+Added: , We are committed to the continuous improvement of our internal control over financial reporting and will diligently review our internal control over financial reporting on an ongoing basis.
PART II – OTHER INFORMATION
+Added: Legal Proceedings
+Added: From time to time, we are a party to various legal proceedings in the ordinary course of our business.
+Added: We are not currently a party to any material legal proceedings.
+Added: Please refer to and read Item 1A, Risk Factors in our Annual Report on Form 10-K for the fiscal year ended December 31, 2023 for a discussion of the risks associated with our Company and industry.
+Added: Unregistered Sales of Equity Securities and Use of Proceeds
+Added: Defaults Upon Senior Securities
+Added: Mine Safety Disclosures
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.