Item 4. Controls and Procedures
Item 4. Controls and Procedures.
Evaluation of Disclosure Controls
and Procedures
Our management is responsible for
establishing and maintaining disclosure controls and procedures (as such term is defined in Rule 13a-15(e) under the Exchange Act) that
are designed to reasonably ensure that information required to be disclosed in our reports under the Exchange Act is recorded, processed,
summarized and reported within the time periods specified in the rules and forms of the SEC, and that such information is accumulated
and communicated to our management, including our Chief Executive Officer and Chief Financial Officer, as appropriate, to allow timely
decisions regarding required disclosure based closely on the definition of “disclosure controls and procedures” in Rule 15d-15(e)
under the Exchange Act. In designing and evaluating the disclosure controls and procedures, our management recognized that any controls
and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving the desired control objectives,
and management necessarily was required to apply its judgment in evaluating the cost-benefit relationship of possible controls and procedures.
At the end of the period covered by this Quarterly
Report, we conducted an evaluation (the “Evaluation”), under the supervision and with the participation of our Chief Executive
Officer and Chief Financial Officer of the effectiveness of the design and operation of our disclosure controls and procedures. Based
upon the foregoing, our Chief Executive Officer and Chief Financial Officer concluded that, as of March 31, 2025, the disclosure controls
and procedures of our Company were not effective to ensure that the information required to be disclosed in our Exchange Act reports was
recorded, processed, summarized and reported on a timely basis due to the material weaknesses in financial reporting as discussed below.
Material Weaknesses and Corrective Actions
The framework used by management
in making that assessment was the criteria set forth in the document entitled “2013 Internal Control - Integrated Framework”
issued by the Committee of Sponsoring Organizations of the Treadway Commission, (“COSO”). In connection with the audits of
our financial statements for the fiscal years ended June 30, 2024 and 2023, we identified certain deficiencies relating to our internal
control over financial reporting that constitute a material weakness under standards established by the Public Company Accounting Oversight
Board (the “PCAOB”). A material weakness is a deficiency, or a combination of deficiencies, within the meaning of PCAOB Audit
Standard No. 5, in internal control over financial reporting, 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.
The following material weaknesses in our internal control
over financial reporting continued to exist at March 31, 2025:
●
we do not have written documentation of our internal control policies and procedures. Written documentation of key internal controls over financial reporting is a requirement of Section 404 of the Sarbanes-Oxley Act of 2002 (the “Sarbanes-Oxley Act”);
●
we do not have sufficient segregation of duties within accounting functions, which is a basic internal control. Due to our limited size and early-stage nature of operations, segregation of all conflicting duties may not always be possible and may not be economically feasible; however, to the extent possible, the initiation of transactions, the custody of assets and the recording of transactions should be performed by separate individuals;
●
lack of audit committee of our board of directors; and
●
insufficient monitoring and review controls over the financial reporting closing process, including the lack of individuals with current knowledge of U.S. GAAP.
We outsource certain of the functions that would normally
be performed by a principal financial officer to assist us in implementing the necessary financial controls over the financial reporting
and the utilization of internal management and staff to effectuate these controls.
We believe that these material
weaknesses primarily relate, in part, to our lack of sufficient staff with appropriate training in U.S. GAAP and SEC rules and regulations
with respect to financial reporting functions, and the lack of robust accounting systems, as well as the lack of sufficient resources
to hire such staff and implement these accounting systems.
We plan to take a number of actions
in the future to correct these material weaknesses including, but not limited to, establishing an audit committee of our board of directors
comprised of at least two independent directors, adding experienced accounting and financial personnel and retaining third-party consultants
to review our internal controls and recommend improvements, subject to receiving sufficient additional capital. If we receive sufficient
capital, we hope to increase the chief financial officer’s role from part-time to full-time as the next step in building out our
accounting department. We will need to take additional measures to fully mitigate these issues, and the measures we have taken, and expect
to take, to improve our internal controls may not be sufficient to (1) address the issues identified, (2) ensure that our internal controls
are effective or (3) ensure that the identified material weakness or other material weaknesses will not result in a material misstatement
of our annual or interim financial statements. In addition, other material weaknesses may be identified in the future. If we are unable
to correct deficiencies in internal controls in a timely manner, our ability to record, process, summarize and report financial information
accurately and within the time periods specified in the rules and forms of the SEC will be adversely affected. This failure could negatively
affect the market price and trading liquidity of our Common Stock, cause investors to lose confidence in our reported financial information,
subject us to civil and criminal investigations and penalties, and generally materially and adversely impact our business and financial
condition.
8
Limitations on Effectiveness of Controls
and Procedures
In designing and evaluating the
disclosure controls and procedures and internal control over financial reporting, management recognizes that any controls and procedures,
no matter how well designed and operated, can provide only reasonable assurance of achieving the desired control objectives. In addition,
the design of disclosure controls and procedures and internal control over financial reporting must reflect the fact that there are resource
constraints and that management is required to apply judgment in evaluating the benefits of possible controls and procedures relative
to their costs.
Changes in Internal Controls over
Financial Reporting
There were no changes in our internal
controls over financial reporting that occurred during the quarter ended March 31, 2025 that have materially affected, or are reasonably
likely to materially affect, our internal controls over financial reporting.
PART II — OTHER INFORMATION
Text extracted from the filing as submitted to EDGAR. Formatting, tables and exhibits are simplified for reading; the original document is authoritative for anything you rely on.