What changed in this filing

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Item 4. Controls and Procedures

2026-06-09 compared with 2025-12-12 · 23 added, 25 removed, 18 unchanged (73% of the section changed)

1 unchanged sentence

Evaluation of Disclosure Controls and Procedures

The Chief Executive Officer and Chief Financial Officer have evaluated the effectiveness of the Company's disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended) as of October 31, 2025.

The Chief Executive Officer and Chief Financial Officer have evaluated the effectiveness of the Company’s disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended, the “Exchange Act”) as of April 30, 2026.

The Company’s disclosure controls and procedures are designed to provide reasonable assurance 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.

Based on this evaluation, the Chief Executive Officer and Chief Financial Officer have concluded that, as of October 31, 2025, our disclosure controls and procedures were not effective because of the material weaknesses in internal control over financial reporting, as described below.

Based on this evaluation, the Chief Executive Officer and Chief Financial Officer have concluded that, as of April 30, 2026, our disclosure controls and procedures were not effective because of the material weaknesses in internal control over financial reporting, as described below.

Material Weaknesses in Internal Control Over Financial Reporting

4 unchanged sentences

This contributed to the following material weaknesses;

We did not design and maintain effective controls over financial reporting relating to the review and approval of manual journal entries, review of the financial close process, including the statement of cash flows, and review of certain financial policies and procedures;

We did not design and maintain effective controls at operating locations in the Middle East and North Africa ("MENA"), including not maintaining sufficient documentation to support an evaluation that controls over business processes were designed and operating effectively.

We did not design and maintain effective controls over segregation of duties related to manual journal entries, account reconciliations and the purchases and payables process.

We did not design and maintain effective controls over review of the financial close process, including the statement of cash flows and to verify the financial statement disclosures agree to the Company’s accounting records;

We did not design and maintain effective controls at operating locations in the Middle East and North Africa (“MENA”), including not maintaining sufficient documentation to support an evaluation that controls over all business processes were designed and operating effectively.

These material weaknesses resulted in adjustments to property, plant, and equipment, net of accumulated depreciation, trade accounts payable, trade accounts receivable, and the statement of cash flows.

These adjustments resulted in a revision of the unaudited consolidated financial statements as of and for the period ended April 30, 2024, a restatement as of and for the period ended July 31, 2024 and material adjustments as of and for the period ended October 31, 2024.

In addition, we have the following additional material weaknesses:

We did not design and maintain effective information technology general controls ("ITGCs"), specifically controls over the timely review of user access and administrative access to adequately restrict access, program change management, computer operations, and program development;

We did not design and maintain effective controls over management's review of the completeness and accuracy of certain system-generated reports.

These material weaknesses did not result in a misstatement to the Company's annual or interim financial statements.

However, each of these material weaknesses could result in a material misstatement of substantially all accounts and disclosures in the Company's annual or interim financial statements that would not be prevented or detected on a timely basis.

These adjustments resulted in a revision of the unaudited Condensed Consolidated Financial Statements as of and for the period ended April 30, 2024, a restatement as of and for the period ended July 31, 2024 and material adjustments as of and for the period ended October 31, 2024.

These material weaknesses also resulted in immaterial corrected and uncorrected misstatements in the statement of cash flows and to stock based compensation expense, unbilled receivables, prepaid expenses and other current assets, operating lease liability short-term, other long-term assets, cost of sales, property, plant and equipment, net of accumulated depreciation, income taxes payable, deferred tax assets, income tax expense costs in excess of billings on uncompleted contracts, and billings in excess of costs and estimated earnings on uncompleted contracts as of and for the year ended January 31, 2026, and in the interim periods ended April 30, 2025, July 31, 2025, and October 31, 2025.

Additionally, each of these material weaknesses could result in a material misstatement of substantially all accounts and disclosures that would result in a material misstatement in the Company’s consolidated annual or interim financial statements that would not be prevented or detected on a timely basis.

Remediation Plan for the Material Weaknesses in Internal Control over Financial Reporting

To address these matters, the Company has initiated a plan to remediate these material weaknesses.

Our ongoing remediation plans include:

(i) performing an entity wide risk assessment to identify relevant risks and changes to those relevant risks to our financial reporting;

ii) designing and implementing controls to identify and evaluate changes in our business and the impact on our internal control over financial reporting;

(iii) engaging outside consultants with expertise relating to ITGCs to document processes, assist in addressing the design and operation of ITGCs, monitoring and testing reviews focusing on systems supporting our financial reporting process (iv) designing and maintaining controls and documentation evidencing those ITGCs for knowledge transfer and function changes, including access and program control and change management, computer operations, and program development, (v) designing and maintaining effective controls to review the completeness and accuracy of certain system-generated reports;

and (vi) outsourcing certain functions to third-party providers.

While management, under the leadership of our CEO, has improved our internal control over financial reporting throughout the three months ended April 30, 2026, additional time and effort is required to fully complete the remediation activities.

We continue to believe these actions will be effective in the remediation of the material weaknesses, but these activities currently remain ongoing.

During the fiscal quarter ended April 30, 2026, we continued an entity wide risk assessment over our financial reporting and our internal control over financial reporting, including identification of financially relevant systems and business processes at the financial statement assertion level, and to identify controls to address the identified risks.

We will continue to complete our risk assessment and enhance the design of existing controls, as well as implement new controls in future periods;

We continue to design and implement controls to identify and evaluate changes in our business and the impact on our internal control over financial reporting;

Our remediation plans related to entity level controls, financial reporting controls, and business process controls include:

(i) enhancing the design of controls for the review of and posting of journal entries, including manual journal entries;

(ii) evaluating and updating documented formal accounting policies, financial reporting, processes and procedures, and overall internal control procedures and (iii) updating the design of controls for the preparation and review of the financial close process, including the statement of cash flows.

In addition to the items noted above, our remediation plans related to our MENA locations include:

(i) evaluating and updating the Company's evidence of internal control policies and procedures;

(ii) enhancing the design of controls over business processes that are relevant to our MENA locations;

and (iii) formalizing our financial reporting processes and procedures.

During the fiscal quarter ended October 31, 2025, we have taken actions to improve our control over financial reporting relating to the review and approval of manual journal entries, review of the financial close process, and review of certain financial policies and procedures.

This also includes controls at our MENA operating locations, ITGCs, and controls over management's review of the completeness and accuracy of certain system-generated reports.

Further enhancements to our segregation of duties framework within the journal entry and account reconciliation processes and the purchases and payables cycle to ensure appropriate segregation of duties within these areas;

Ongoing updates in the design of controls for the preparation and review of the financial close process, including the statement of cash flows and to verify the financial statement disclosures agree to the Company’s accounting records;

Implemented a new consolidation and reporting software.

In connection with this implementation, we updated the processes that constitute our internal control over financial reporting, as necessary, to accommodate related changes in our business processes, including the statement of cash flows and segregation of duties for manual consolidating journal entries;

Providing continuing training, coaching, and reviews around our internal control over financial reporting.

In addition to the items noted above, our remediation plans related to our MENA locations include the following:

Further enhancements to the design and operation of controls over business processes that are relevant to our MENA locations;

Providing continuing training, coaching, and reviews around our internal control over financial reporting;

Continuing to formalize our financial reporting processes and procedures.

The Company anticipates the actions described above will strengthen the Company’s internal control over financial reporting and will address the related material weaknesses described above.

3 unchanged sentences

Changes in Internal Control over Financial Reporting

As described in the "Remediation Plan for the Material Weaknesses in Internal Control over Financial Reporting" above, there were 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 during the fiscal quarter ended October 31, 2025, that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

As described in the "Remediation Plan for the Material Weaknesses in Internal Control over Financial Reporting" above, there were 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 during the fiscal quarter ended April 30, 2026, that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

PART II OTHER INFORMATION

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.

What changed 10-Q

Item 4. Controls and Procedures