Item 4. Controls and Procedures
ITEM
4. CONTROLS AND PROCEDURES
Evaluation
of Disclosure Controls and Procedures
Our
management, with the participation of our Chief Executive Officer (“CEO”) and Chief Financial Officer (“CFO”),
evaluated the effectiveness of our disclosure controls and procedures as defined in Rule 13a-15(e) and 15d-15(e) under the Securities
Exchange Act of 1934, as amended (the “Exchange Act”), as of September 30, 2023. Our disclosure controls and procedures are
designed to provide reasonable assurance that information we are required to disclose in the reports we file or submit under the Exchange
Act is accumulated and communicated to our management, including our CEO and CFO, as appropriate to allow timely decisions regarding
required disclosures, and is recorded, processed, summarized, and reported within the time periods specified in the SEC’s rules
and forms. Based on this evaluation, and as a result of the material weakness described below, our CEO and CFO have concluded that our
disclosure controls and procedures were not effective as of September 30, 2023. In light of this determination, our management has performed
additional analyses, reconciliations, and other post-closing procedures and has concluded that, notwithstanding the material weakness
in our internal control over financial reporting, the unaudited interim condensed consolidated financial statements for the periods covered
by and included in this Quarterly Report on Form 10-Q fairly state, in all material respects, our financial position, results of operations
and cash flows for the periods presented in conformity with U.S. GAAP.
Material
Weakness
As
of December 31, 2022, we identified a material weakness in our internal control over financial reporting due to not having the appropriate
controls in place over our revenue recognition process for nonroutine and complex revenue transactions in accordance with ASC 606, “Revenue
from Contracts with Customers”, which continued to exist as of September 30, 2023.
In
order to remediate this material weakness, management has expanded and improved our process for reviewing customer contracts and revenue
recognition inputs, including through the engagement of third-party accounting professionals with expertise in evaluating customer contracts
to obtain guidance on large and/or unique contracts in order to ensure that ASC 606 is accurately applied and documented.
Although
we began implementing the enhancements described above at the end of 2022 and have been continuing our remediation efforts through September
30, 2023, the material weakness will not be considered remediated until the applicable controls operate for a sufficient period of time
and management has concluded that these controls are operating effectively.
Changes
in Internal Control over Financial Reporting
Except
as described above, there were no changes in our internal control over financial reporting during the three months ended September 30,
2023 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.
21
PART
II – OTHER INFORMATION
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