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Evaluation of Disclosure Controls and Procedures
−Removed: The Chief Executive Officer and Chief Financial Officer have evaluated the effectiveness of the Company's disclosure controls and procedures (as defined in Rule 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended) as of April 30, 2024.
+Added: The Chief Executive Officer and Chief Financial Officer have evaluated the effectiveness of the Company's disclosure controls and procedures (as defined in Rule 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended) as of July 31, 2024.
This evaluation included consideration of the controls, processes and procedures that are designed to ensure that information required to be disclosed by the Company in the reports the Company files or submits under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms, and to provide reasonable assurance that such information is accumulated and communicated to the Company’s management, including its Chief Executive Officer and Chief Financial Officer, as appropriate to allow timely decisions regarding required disclosure.
−Removed: Based on this evaluation, the certifying officers have concluded that, as of the end of the period covered by this Quarterly Report on Form 10-Q, our disclosure controls and procedures were not effective because of the material weakness described below.
−Removed: Management has previously reported on material weaknesses in the Company's internal control over information technology general controls ("ITGC"), financial reporting relating to the review and approval of manual journal entries, timely review of the financial close process, and timely review of certain financial policies and procedures and respective HR policies.
+Added: Based on this evaluation, the Chief Executive Officer and Chief Financial Officer have concluded that, as of the end of the period covered by this Quarterly Report on Form 10-Q, our disclosure controls and procedures were not effective because of the material weaknesses in internal control over financial reporting, as described below.
+Added: Material Weaknesses in Internal Control Over Financial Reporting
+Added: As previously reported, we have material weaknesses in the Company's internal control over information technology general controls ("ITGC"), financial reporting relating to the review and approval of manual journal entries, timely review of the financial close process, and timely review of certain financial policies and procedures and respective HR policies.
The Company also did not maintain effective controls at certain operating locations in the Middle East and North Africa ("MENA"), specifically the Company did not maintain sufficient documentation to support an evaluation that controls over business processes were operating effectively.
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The material weakness did not result in any material misstatements to the Company’s consolidated financial statements.
−Removed: As a result, at January 31, 2024 and April 30, 2024 , a nd on the date of this Quarterly Report on Form 10-Q, the Company's internal control over financial reporting is not effective.
+Added: As a result of these material weaknesses, 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.
A material weakness is a deficiency, or a 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.
−Removed: As a result of the material weaknesses identified, the Company has begun updating its internal control over financial reporting as discussed in its remediation plan as further described below.
Remediation Plan for the Material Weaknesses in Internal Control over Financial Reporting
To address these matters, the Company has begun implementing its remediation plan.
−Removed: Specifically, the Company is executing on the following:
−Removed: The remediation plans related to ITGCs include:
+Added: Our ongoing remediation plans include the following:
(i) addressing the identified issues with control owners, including Company leadership and IT personnel;
(ii) engaging outside consultants with expertise relating to ITGCs to document processes, assist in addressing the design and operating business process controls, monitoring and testing reviews focusing on systems supporting our financial reporting process (iii) developing and maintaining documentation underlying ITGCs for knowledge transfer and function changes, including access control and change management;
−Removed: (iv) outsourcing certain functions to third-party providers, specifically relating to servers and firewalls, and managed detection and response.
−Removed: The remediation plans related to the entity level controls and business process controls over MENA locations include:
+Added: and (iv) outsourcing certain functions to third-party providers, specifically relating to servers and firewalls, and managed detection and response.
+Added: Our remediation plans related to entity level controls and business process controls over MENA locations include:
(i) addressing issues with control owners, including company leadership;
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and (iv) augmenting our internal audit function by hiring an additional resource to assist in overseeing the remediation process, including updating policies and procedures, and implementing internal controls;
−Removed: (v) engaging outside consultants to conduct training sessions.
+Added: and (v) engaging outside consultants to conduct training sessions.
The Company anticipates the actions described above and resulting improvements in controls will strengthen the Company's processes, procedures and will address the related material weaknesses described above.
−Removed: However, the material weaknesses cannot be considered fully remediated until the remediation processes have been in operation for a period of time and successfully tested.
+Added: However, the material weaknesses cannot be considered fully remediated until the necessary controls have been appropriately designed and implemented.
+Added: The remediation processes and procedures will also need to be in operation for a period of time and management conclude through testing, that these controls are operating effectively.
+Added: Accordingly, the material weaknesses are not remediated as of July 31, 2024.
Change in Internal Control over Financial Reporting .
−Removed: While the Company continues to implement design enhancements to our internal control procedures, we believe that, other than the changes described above regarding the ongoing remediation efforts, there were no changes to our internal control over financial reporting which were identified in connection with the evaluation required by Rules 13a-15(d) or 15d-15(d) under the Exchange Act during the fiscal quarter ended April 30, 2024, that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.
+Added: There were no changes to our internal control over financial reporting which were identified in connection with the evaluation required by Rules 13a-15(d) or 15d-15(d) under the Exchange Act during the fiscal quarter ended July 31, 2024, that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.
PART II OTHER INFORMATION
+Added: Certificate of Incorporation of Perma-Pipe International Holdings, Inc.
+Added: [Incorporated by reference to Exhibit 3.3 to Registration Statement No.
+Added: Certificate of Amendment to Certificate of Incorporation of Perma-Pipe International Holdings, Inc.
+Added: [Incorporated by reference to Exhibit 3.1 to the Company's Current Report on Form 8-K filed on March 20, 2017]
+Added: Fifth Amended and Restated By-Laws of Perma-Pipe International Holdings, Inc.
+Added: [Incorporated by reference to Exhibit 3.2 to the Company's Current Report on Form 8-K filed on May 6, 2019]
+Added: Perma-Pipe International Holdings, Inc.
+Added: 2024 Omnibus Stock Incentive Plan [Incorporated by reference to Appendix A to the Company's Definitive Proxy Statement on Schedule 14A filed on June 21, 2024]*
Rule 13a - 14(a)/15d - 14(a) Certifications
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Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101)
+Added: *Management contracts and compensatory plans or agreements
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.
Perma-Pipe International Holdings, Inc.
−Removed: June 13, 2024
+Added: September 11, 2024
President and Chief Executive Officer
(Principal Executive Officer)
−Removed: June 13, 2024
+Added: September 11, 2024
/s/ Matthew E.
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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.