1 unchanged sentence
Evaluation of Disclosure Controls and Procedures
−Removed: Our management carried out an evaluation, under the supervision and with the participation of our chief executive officer and chief financial officer (our principal executive officer and principal financial officer, respectively), of the effectiveness of the design and operation of our disclosure controls and procedures (as such term is defined in Rule 13a-15(e) under the Exchange Act) as of September 30, 2023, pursuant to Exchange Act Rule 13a-15.
−Removed: Based upon this evaluation, our chief executive officer and chief financial officer have concluded that, as of September 30, 2023, as a result of the material weaknesses in our internal control over financial reporting discussed below and in the Company’s annual report on Form 10-K for the year ended December 31, 2022, our disclosure controls and procedures were not effective.
−Removed: As disclosed in Item 9 of our annual report on Form 10-K for the year ended December 31, 2022, management concluded that we lack a sufficient number of trained professionals with technical accounting expertise to identify, evaluate, value and account for complex and non-routine transactions, including revenue and stock-based compensation.
−Removed: We also found we have insufficient accounting resources to maintain appropriate segregation of duties, including to ensure journal entries are reviewed by personnel independent of the preparer.
−Removed: Management has taken steps to evaluate resources throughout the organization to determine where current resources should be reassigned and where additional resources are needed to consistently and timely execute internal control activities.
−Removed: During the first quarter of 2023, an SEC reporting manger was added to the accounting department and management plans to hire additional accounting staff during the remainder of the year.
−Removed: For more complex transactions and to the extent there is a lack of knowledge within the current accounting team, management plans to engage external professional firms to assist with such transactions as they arise, and to make additional hires and consulting arrangements as necessary.
−Removed: During the second quarter, management hired a consulting firm to act as the Company’s co-sourced internal audit department and assist with the Company’s SOX 404(b) readiness.
−Removed: During the third quarter, the Company continued its’ documentation of key business processes and key controls.
−Removed: During this process, the Company identified and implemented additional internal controls to mitigate material weaknesses identified from the prior year.The material weaknesses will not be considered remediated until remediated controls operate for a sufficient period of time and management has concluded that these controls are operating effectively.
+Added: Our management, with the supervision and involvement of our Principal Executive Officer and Principal Financial Officer, has evaluated the effectiveness of the design and operation of our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act) as of the end of the period covered by this report, pursuant to Exchange Act Rule 13a-15.
+Added: Based upon this evaluation, our chief executive officer and chief financial officer have concluded that, as of March 31, 2024, as a result of the material weaknesses in our internal control over financial reporting discussed below, our disclosure controls and procedures were not effective.
+Added: A material weakness is a control deficiency, or combination of deficiencies, in internal control over financial reporting, such that there is a reasonable possibility that a material misstatement of the Company's annual or interim financial statements will not be prevented or detected on a timely basis.
+Added: The following material weaknesses in the control environment based on the COSO Framework and control activities have been identified:
+Added: • The Company did not maintain a sufficient complement of personnel with appropriate levels of knowledge, experience, and training in accounting for complex and non-routine transactions, and internal control matters to perform assigned responsibilities and have appropriate accountability for the design and operation of internal control over financial reporting.
+Added: The control environment material weaknesses contributed to other material weaknesses within the Company’s system of internal control over financial reporting in the following COSO Framework components such that the Company did not design and implement effective controls as follows:
+Added: • Control activities and monitoring - The Company did not design and implement effective controls over the accounting for share-based payments, including the long-term incentive plan awards, as well as the accounting for the Company’s license and release agreement.
+Added: Additionally, the Company did not have effective ongoing evaluation to ascertain whether the components of internal controls are present and functioning.
+Added: Management is in the process of evaluating resources throughout the organization where current resources should be assigned and where additional resources are needed to consistently timely execute internal control activities.
+Added: For complex transactions, management plans to utilize external professional firms to assist with such transactions as they may arise.
Management has concluded that, notwithstanding the material weaknesses described above, the Company’s condensed consolidated financial statements 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 the date, and for the periods presented, in conformity with U.S.
+Added: Changes in Internal Control Over Financial Reporting
+Added: Other than the material weakness described above, there have been no significant changes in our internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) that occurred during our most recent fiscal quarter that have materially affected, or are reasonably likely to materially affect, the Company’s internal control over financial reporting.
PART II —OTHER INFORMATION
2 unchanged sentences
We are currently not a party to any material legal proceedings.
+Added: Risk Factors.
+Added: See risk factors disclosed in Part I—Item 1A, “Risk Factors,” in our annual report on Form 10-K for the fiscal year ended December 31, 2023, which was filed with the SEC on March 6, 2024.
+Added: We have no identified additional risks that could materially adversely affect our operating results, financial condition or future business as of March 31, 2024.
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.