Item 4. Controls and Procedures
ITEM
4. CONTROLS AND PROCEDURES
Disclosure Controls and Procedures
We maintain “disclosure controls and
procedures,” as that term is defined in Rule 13a-15(e), promulgated by the SEC pursuant to the Securities Exchange Act of
1934, as amended (the “Exchange Act”). Disclosure controls and procedures include controls and procedures designed to
ensure that information required to be disclosed in our Company’s reports filed under the Exchange Act is recorded, processed,
summarized and reported within the time periods specified in the SEC’s rules and forms, and that such information is
accumulated and communicated to our management, including our principal executive officer and principal financial officer to allow
timely decisions regarding required disclosure. Our management, with the participation of our principal executive officer and
principal financial officer, evaluated our Company’s disclosure controls and procedures as of the end of the period covered by
this Form 10-Q. Based on this evaluation, and in light of the material weaknesses in our internal control over financial
reporting described below, our principal executive officer and principal financial officer concluded that as of March 31, 2026, our
disclosure controls and procedures were not effective.
Evaluation
of Internal Control Over Financial Reporting
Our
management is responsible for establishing and maintaining adequate internal control over financial reporting, as defined in Rules 13a-15(f)
of the Exchange Act. Under the supervision and with the participation of our principal executive officer and principal financial officer
and oversight of the Audit Committee of the Board of Directors, we conducted an evaluation of the effectiveness of our internal control
over financial reporting based on criteria established in the framework set forth in Internal Control—Integrated Framework (2013)
issued by the Committee of Sponsoring Organizations of the Treadway Commission.
Our
management, including our principal executive officer and principal financial officer, recognizes that internal controls over financial
reporting, no matter how well designed and operated, can provide only reasonable assurance of achieving the desired control objectives.
Because of the inherent limitations in all control systems, no evaluation of controls can provide absolute assurance that all control
issues and instances of fraud, if any, have been detected. Additionally, controls can be circumvented by the individual acts of some
persons, by collusion of two or more people, or by management override of the controls.
Based
on our evaluation, management concluded that our internal control over financial reporting was not effective as of March 31, 2026.
The
following material weaknesses in our internal control over financial reporting were identified:
●
Ineffective
approval processes governing (i) timely Board of Directors authorization and (ii) segregation of duties and roles and responsibilities
configurations within the Company’s financial reporting system;
●
Inadequate
contract management process to capture all executed agreements prior to the commencement of services in order to ensure accuracy
within the proper accounting period;
●
Misapplication
of U.S. GAAP; and
●
Ineffective
disclosure controls and procedures a result of (i) lack of segregation of duties, (ii) lack of internal control structure review
and (iii) misapplication of U.S. GAAP.
In
order to remediate the identified material weaknesses, management, with the oversight of the Audit Committee of the Board of
Directors, undertook measures to enhance the Company’s internal control environment, including the (i) hiring of a principal
financial officer and other accounting personnel to ensure the appropriate application of U.S. GAAP, (ii) hiring of a dedicated
internal control manager who reports directly to the Audit Committee and whose sole responsibility is to develop, document,
implement and maintain our internal control framework including walk throughs, narratives, flow charts, risk control matrices and
independent testing of our financial and IT controls, (iii) documentation and communication of business policies such as a
delegation of authority over company transactions as well as invoice and journal entry approvals, (iv) completion of a formal
monthly close process including account reconciliations with supporting documentation, (v) engagement of a third-party firm that
implemented controls to segregate duties and approvals with the proper assignment of roles and responsibilities within the
Company’s financial system and (vi) the adoption and implementation of the Information System Audit and Control
Association (“ISACA”) Control Objectives for Information and Related Technologies (“COBIT”) 2019 framework to design,
develop, govern and manage enterprise IT. However, management has not fully implemented the remediation steps, in particular
testing, and expects remediation efforts to continue through the remainder of fiscal year 2026.
While
these remediation efforts are subject to ongoing management evaluation and will require validation and testing of the design and operating
effectiveness of the Company’s internal controls over a sustained period of financial reporting cycles, management is committed
to maintaining a strong internal control program over financial reporting and will take further actions and implement additional enhancements
or improvements as necessary.
Changes
in Internal Control Over Financial Reporting
Other
than the remediation efforts described above, there were no changes in our internal controls over financial reporting, as defined in
Rules 13a-15(f) of the Exchange Act, during the quarter ended March 31, 2026 that have materially affected, or are reasonably likely
to materially affect, our internal control over financial reporting.
27
PART
II - OTHER INFORMATION
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