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Evaluation of Disclosure Controls and Procedures
−Removed: Our management, with the participation of our President and Chief Executive Officer and our Chief Financial Officer, our principal executive officer and principal accounting and financial officer, respectively, have evaluated the effectiveness of our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act) as of August 31, 2021.
+Added: Our management, with the participation of our President and Chief Executive Officer and our Chief Financial Officer, our principal executive officer and principal accounting and financial officer, respectively, have evaluated the effectiveness of our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act) as of February 28, 2022.
Disclosure controls and procedures are controls and other procedures that are designed to ensure that information required to be disclosed in our reports filed or submitted under the Exchange Act is recorded, processed, summarized and reported, within the time periods specified in the SEC’s rules and forms.
Disclosure controls and procedures include controls and procedures designed to ensure that information required to be disclosed in our reports filed under the Exchange Act is accumulated and communicated to management, including our President and Chief Executive Officer and our Chief Financial Officer, to allow timely decisions regarding required disclosure.
−Removed: Based on the evaluation of our disclosure controls and procedures, our President and Chief Executive Officer and our Chief Financial Officer concluded that our disclosure controls and procedures were not effective as of August 31, 2021 due to the material weakness in our internal control over financial reporting described below.
−Removed: In light of this fact, our management has performed additional analyses, reconciliations, and other post-closing procedures and has concluded that, notwithstanding the material weakness in our internal control over financial reporting, the consolidated financial statements for the periods covered by and included in this Quarterly Report on Form 10-Q fairly present, in all material respects, our financial position, results of operations and cash flows for the periods presented in conformity with U.S.
+Added: Based on the evaluation of our disclosure controls and procedures, our President and Chief Executive Officer and our Chief Financial Officer concluded that our disclosure controls and procedures were not effective as of February 28, 2022 due to the material weakness in our internal control over financial reporting described below.
+Added: In light of this fact, our management has performed additional analyses, reconciliations, and other post-closing procedures and has concluded that, notwithstanding the material weakness in our internal control over financial reporting, the condensed consolidated financial statements for the periods covered by and included in this Quarterly Report on Form 10-Q fairly present, in all material respects, our financial position, results of operations and cash flows as of and for the periods presented in conformity with U.S.
Previously Reported Material Weakness in Internal Control over Financial Reporting
−Removed: As disclosed in the section titled “Risk Factors” in Part II, Item 1A of this Quarterly Report on Form 10-Q, w e previously identified a material weakness in our internal control over financial reporting.
−Removed: Specifically, we did not design and maintain formally documented controls and accounting policies and procedures, including information technology general controls, segregation of duties over the review and approval of account reconciliations and manual journal entries, and the period-end financial reporting process.
−Removed: This material weakness resulted in the revision to the basic and diluted weighted-average number of shares outstanding and basic and diluted net loss per share calculations for the three- and nine-month periods ended August 31, 2020.
−Removed: In addition, this material weakness also resulted in the revision to the diluted weighted-average number of shares outstanding and basic and diluted net income per share calculations for the three-month period ended May 31, 2020.
−Removed: Additionally, this material weakness could result in a misstatement of substantially all of our account balances or disclosures that would result in a material misstatement to the annual or interim financial statements that would not be prevented or detected.
+Added: We have previously identified in our Annual Report on Form 10-K filed on January 28, 2022 the following control deficiencies that constitute material weaknesses in our internal control over financial reporting:
+Added: We did not design and maintain effective controls over certain information technology (IT) general controls for IT systems that are relevant to the preparation of the financial statements.
+Added: Specifically, we did not design and maintain:
+Added: (a) user access controls to ensure appropriate segregation of duties and that adequately restrict user and privileged access to financial applications, programs, and data to appropriate personnel, and (b) program change management controls to ensure that IT program and data changes affecting financial IT applications and underlying accounting records are identified, tested, authorized and implemented appropriately.
+Added: These IT deficiencies did not result in any misstatements to the financial statements;
+Added: however, the deficiencies, when aggregated, could impact our ability to maintain effective segregation of duties, as well as the effectiveness of IT-dependent controls (such as automated controls that address the risk of material misstatement to one or more assertions, along with the IT controls and underlying data that support the effectiveness of system-generated data and reports) that could result in misstatements potentially impacting all financial statement accounts and disclosures that would result in a material misstatement to the annual or interim financial statements that would not be prevented or detected.
+Added: Accordingly, management has determined that these deficiencies in the aggregate constitute a material weakness.
+Added: We did not design and maintain effective segregation of duty controls over the review and approval of account reconciliations and manual journal entries.
+Added: This material weakness did not result in any misstatements to the financial statements;
+Added: however, the deficiency could result in a misstatement of substantially all of our account balances or disclosures that would result in a material misstatement to the annual or interim financial statements that would not be prevented or detected.
+Added: These material weaknesses could result in a misstatement of substantially all of our account balances or disclosures that would result in a material misstatement to the annual or interim financial statements that would not be prevented or detected.
A material weakness is a deficiency, or combination of deficiencies, in internal control over financial reporting, such that there is a reasonable possibility that a material misstatement of the annual or interim financial statements will not be prevented or detected on a timely basis.
Remediation Plan
−Removed: To address our material weakness, we are in the process of implementing new financial systems and controls.
−Removed: We intend to continue to take steps to remediate the material weakness through formalizing documentation of policies and procedures and further evolving our accounting processes.
+Added: To address our material weaknesses, we have implemented and continue to implement new IT controls.
+Added: We intend to continue to take steps to remediate the material weaknesses through formalizing documentation of IT policies and procedures and ensuring the ongoing operating effectiveness of the newly implemented IT controls to support effective IT dependent controls and our ability to maintain segregation of duties for our accounting staff in relation to account reconciliations and manual journal entries.
While we believe that these efforts will improve our internal control over financial reporting, the design and implementation of our remediation is ongoing and will require validation and testing of the design and operating effectiveness of our internal controls over a sustained period of financial reporting cycles.
The actions that we are taking are subject to ongoing senior management review, as well as audit committee oversight.
−Removed: We will not be able to conclude whether the steps we are taking will fully remediate the material weakness in our internal control over financial reporting until we have completed our remediation efforts and subsequent evaluation of their effectiveness.
+Added: We will not be able to conclude whether the steps we are taking will fully remediate the material weaknesses in our internal control over financial reporting until we have completed our remediation efforts and subsequent evaluation of their effectiveness.
Changes in Internal Control Over Financial Reporting
−Removed: As part of our remediation plan discussed above, we continued formalizing documentation of policies and procedures and evaluating the implementation of new and existing controls during the quarter ended August 31, 2021.
−Removed: Such remediation actions were changes in our internal control over financial reporting identified in connection with the evaluation required by Rule 13a-15(d) and 15d-15(d) of the Exchange Act that occurred during the three months ended August 31, 2021 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.
+Added: As described under the Remediation Plan above, we continued formalizing documentation of our IT policies and procedures and implementing new controls during the three months ended February 28, 2022.
+Added: Such remediation actions were changes in our internal control over financial reporting identified in connection with the evaluation required by Rule 13a-15(d) and 15d-15(d) of the Exchange Act that occurred during the three months ended February 28, 2022 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting .
PART 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.