What changed in this filing

/stocks — the workspaceLOADING

Item 4. Controls and Procedures

2024-09-10 compared with 2023-11-14 · 71 added, 23 removed, 6 unchanged (94% of the section changed)

3 unchanged sentences

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

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.

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.

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.

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.

Exchange Act of 1934, as amended (the “Exchange Act”), as of March 31, 2024.

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 weaknesses described below, our CEO and CFO have concluded that our disclosure

controls and procedures were not effective as of March 31, 2024.

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.

Weaknesses in Internal Control over Financial Reporting

material weakness, as defined in the standards established by Sarbanes-Oxley, 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 our annual or interim consolidated

financial statements will not be prevented or detected on a timely basis.

control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting

and the preparation of financial statements in accordance with U.S.

The following material weaknesses in our internal control over

financial reporting were present as of December 31, 2023, and continued to exist as of March 31, 2024:

Company did not maintain effective controls over the revenue recognition of over-time contracts

and associated costs.

The Company’s underlying estimates of total labor hours required

to complete over-time contracts were materially different from the actual labor hours required,

which was determined to represent an error, and, as a result, the percentage of completion

used to recognize revenue was materially different from the percentage of completion using

actual labor hours incurred.

Additionally, the Company did not properly account for recognition

of costs incurred by contract.

This material weakness resulted in the restatement of the

Company’s consolidated financial statements for the year ended December 31, 2022, as

well as its interim consolidated financial statements for the three months ended March 31,

2022, and 2023, the three and six months ended June 30, 2022, and 2023 and the three and nine

months ended September 30, 2022, and 2023.

Company did not design and maintain effective controls over the accounting for inventory

and related cost of sales, primarily due to the lack of an automated tracking system and

the manual nature of its current processes and controls surrounding inventory.

Specifically,

we did not design and maintain effective controls over (1) complete and accurate inventory

costing, including recording inventoriable costs at the lower of cost and net realizable

value, (2) cycle count procedures and inventory system changes, which occur without proper

review and documentation and (3) proper segregation of duties.

Company has a lack of sufficient accounting personnel with the necessary skills, knowledge,

and expertise.

This deficiency impacts our ability to ensure appropriate segregation of duties,

and to accurately and timely close, consolidate and prepare financial statements as required

to maintain compliance with reporting deadlines under applicable SEC regulations.

Plan to Remediate the Material Weaknesses

Company is implementing enhancements to its internal controls to remediate the identified material weaknesses in its internal control

over financial reporting.

Specifically, the Company has:

external third parties for assistance as needed;

a review and update of significant accounting policies, procedures, and controls;

additional training for its accounting and financial reporting personnel.

Additionally,

the Company plans to hire additional accounting and finance personnel with the requisite skills, knowledge and expertise to address identified

control deficiencies.

Company is committed to maintaining a strong internal control environment and believes these remediation efforts will represent significant

improvements in its controls over the control environment.

These steps will take time to be fully implemented and confirmed to be effective

and sustainable.

Additional controls may also be required over time.

While the Company believes that these efforts will improve its internal

control over financial reporting, the Company will not be able to conclude whether the steps the Company is taking will remediate the

material weaknesses in internal control over financial reporting until a sufficient period of time has passed to allow management to

test the design and operational effectiveness of the new and enhanced controls.

Until the remediation steps set forth above are fully

implemented and tested, the material weaknesses described above will continue to exist.

in Internal Control over Financial Reporting

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.

than described above, there have been no changes in our internal control over financial reporting that occurred during the three

months ended March 31, 2024, that have materially affected, or that are reasonably likely to materially affect,

our internal control over financial reporting.

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