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 March 31, 2025. 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 March 31, 2025. 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
condensed interim 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 in Internal Control over Financial
Reporting
A 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 unaudited condensed interim consolidated financial statements will
not be prevented or detected on a timely basis.
Internal 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. GAAP. In our assessment of the effectiveness of internal control over financial reporting as of March 31, 2025,
we determined that the Company’s internal control over financial reporting was not effective due to the lack of sufficient accounting
personnel and, as a result, the Company is unable to maintain proper segregation of duties. The material weakness in our internal control
over financial reporting was present as of December 31, 2024, and continued to exist as of March 31, 2025.
Management’s Plan to Remediate the Material Weakness
The Company is implementing enhancements to its internal controls to remediate
the identified material weakness in its internal control over financial reporting. Specifically, the Company:
●
has engaged external third parties for assistance as needed;
●
has contracted to implement a new ERP system allowing for systemic enforcement of segregation of duties rules; and
●
will be enhancing, designing and implementing process-level and general information technology controls relevant to the financial reporting process within the new ERP system.
Additionally, the Company plans to hire additional accounting and finance
personnel with the requisite skills, knowledge and expertise to address identified control deficiencies.
The 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 weakness 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 weakness described above
will continue to exist.
Changes in Internal Control
over Financial Reporting
Other than described above, there have been no changes
in our internal control over financial reporting that occurred during the three months ended Mach 31, 2025, that have materially affected,
or that are reasonably likely to materially affect, our internal control over financial reporting.
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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.