Item 8. Financial Statements and Supplementary Data
Item 8. Financial Statements and Supplementary Data.
Reference is made to pages F-1 through F-52
comprising a portion of this report, which are incorporated herein by reference.
Item 9. Changes in and Disagreements With Accountants
on Accounting and Financial Disclosure.
On October 15, 2024, EisnerAmper LLP (“EA”)
submitted its resignation as the Company’s independent registered public accounting firm, effective upon the Company’s filing
of its Quarterly Report on Form 10-Q for the quarter ended September 30, 2024.
The Company’s Audit
Committee of the Board (the “Audit Committee”) appointed EA to serve as the Company’s independent registered public
accounting firm on July 6, 2023 (the “Appointment Date”). EA’s audit report on the Company’s financial statements
as of, and for the fiscal year ended December 31, 2023, dated April 11, 2024, did not contain any adverse opinion or a disclaimer of opinion,
nor was it qualified or modified as to uncertainty, audit scope or accounting principles, other than that it contained an explanatory
paragraph regarding the Company’s ability to continue as a going concern.
From the Appointment
Date to the date of EA’s resignation (the “Engagement Period), there were no disagreements between the Company and EA on any
matter of accounting principles or practices, financial statement disclosure, or auditing scope or procedure, which disagreements, if
not resolved to the satisfaction of EA, would have caused EA to make reference to the subject matter of the disagreements in connection
with its audit reports on the Company’s financial statements for such periods.
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During the Engagement
Period, there were no “reportable events”, as defined in Regulation S-K Item 304(a)(1)(v), except as previously disclosed
in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2023 and the Company’s Quarterly Reports
on Form 10-Q for the periods ended March 31, 2024, June 30, 2024, and September 30, 2024, Company management identified certain material
weaknesses in internal controls as follows: (a) the Company did not maintain an effective control environment with adequate segregation
of duties with respect to cash disbursements; (b) the Company did not have an effective risk assessment process and effective monitoring
of compliance with established accounting policies and procedures, and did not demonstrate a sufficient level of precision in the application
of the Company’s controls, including the maintenance of board committee minutes and unanimous written consents; (c) the Company’s
controls over the approval and reporting of expenses paid with the Company’s credit cards and certain bank wires were not designed
and maintained to achieve the Company’s objectives; (d) the Company lacked accounting resources to maintain optimal segregation
of duties, maintain adequate controls over the approval and posting of journal entries, and to provide optimal levels of oversight in
order to process financial information in a timely manner, analyze and account for complex, non-routine transactions, and prepare financial
statements; (e) the Company did not maintain adequate controls for the timely identification, approval or reporting of related party transactions,
and (f) the Company did not maintain effective controls to ensure information technology policies and procedures set the tone at the top,
to mitigate risks and achieve information technology objectives and ITGCs in the change management, logical security and computer
operations domains.
Effective February 13, 2025, the Audit Committee
authorized the appointment of MaloneBailey LLP (“ MaloneBailey ”) as the Company’s new independent registered public
accounting firm for the fiscal year ended December 31, 2024, and MaloneBailey was appointed as the Company’s independent registered
public accounting firm. During the Company’s two most recent fiscal years ended December 31, 2024 and 2023, and the subsequent interim
period through February 13, 2025, neither the Company nor anyone acting on behalf of the Company had consulted MaloneBailey regarding
either: (i) the application of accounting principles to a specified transaction, either completed or proposed, or the type of audit opinion
that might be rendered on the Company’s financial statements, nor did MaloneBailey provide a written report or oral advice to the
Company that MaloneBailey concluded was an important factor considered by the Company in reaching a decision as to the accounting, auditing
or financial reporting issues; or (ii) any matter that was either the subject of a “disagreement” (as defined in Item 304(a)(1)(iv)
of Regulation S-K and the related instructions) or a “reportable event” (as described in Item 304(a)(1)(v) of Regulation S-K).