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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 June 30, 2024, 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 June 30, 2024, 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 September 30, 2024, based on the Internal Control – Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission, or 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 September 30, 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 June 30, 2024.
+Added: Management identified a material weakness in its ICFR at December 31, 2022, over our inventory process which still exists as of September 30, 2024.
Specifically, we have identified issues related to:
(i) year-end physical inventory count procedures, and (ii) the process to review and approve inventory adjusting journal entries.
−Removed: 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.
−Removed: generally accepted accounting principles (“US GAAP”), our management has concluded that our condensed consolidated financial statements present fairly, in all material respects our financial position, results of operations and cash flows for the periods disclosed in conformity with US GAAP.
+Added: 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 GAAP, our management has concluded that our Condensed Consolidated Financial Statements present fairly, in all material respects our financial position, results of operations and cash flows for the periods disclosed in conformity with GAAP.
Remediation Plan for Material Weakness
−Removed: 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.
+Added: 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 ICFR and remediate the material weakness.
Our planned internal control remediation efforts, which continue, include:
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• We intend to continue efforts to ensure our employees understand the ongoing importance of internal controls and compliance with corporate policies and procedures.
−Removed: • We have added a highly qualified new member to our board of directors and expanded our audit committee
+Added: • We have added two highly qualified new members to our Board of Directors and expanded our Audit Committee
We feel that the outcome of the actions discussed above have yielded favorable results to date.
−Removed: 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 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, including the closing cycle for the year ending December 31, 2024.
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.
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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.