What changed in this filing

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Item 4. Controls and Procedures

2023-11-15 compared with 2023-08-09 · 39 added, 23 removed, 11 unchanged (85% of the section changed)

CONTROLS AND PROCEDURES

Evaluation of Disclosure Controls and Procedures

of Disclosure Controls and Procedures

As of the end of the period

covered by this report, under the supervision and with the participation of our management, including our Chief Executive Officer (“CEO”)

and Interim Chief Financial Officer (“CFO” and together with the CEO, the “Certifying Officers”), we evaluated

the effectiveness of the design and operation of our disclosure controls and procedures (as such term is defined in Rule 13a-15(e) under

the Securities Exchange Act of 1934, as amended (the “Exchange Act”)).

Disclosure controls and procedures are controls

and other procedures designed to ensure that information required to be disclosed in our reports filed or submitted under the Exchange

Act is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms.

Disclosure controls

and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed in our

reports filed or submitted under the Exchange Act is accumulated and communicated to management, including our Certifying Officers, or

persons performing similar functions, as appropriate, to allow timely decisions regarding required disclosure.

We acquired Intellibed on August 31, 2022

and are currently in the process of integrating Intellibed into our assessment of internal control over financial reporting.

assessment and conclusions on the effectiveness of our internal control over financial reporting as of June 30, 2023 excludes an assessment

of the internal control over financial reporting of Intellibed.

We are in the process of implementing our internal control structure at

Intellibed and expect that this effort will be completed in fiscal 2023.

and Chief Financial Officer (“CFO” and together with the CEO, the “Certifying Officers”), we evaluated the effectiveness

of the design and operation of our disclosure controls and procedures (as such term is defined in Rule 13a-15(e) under the Securities

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

Disclosure controls and procedures are controls and other procedures

designed to ensure that information required to be disclosed in our reports filed or submitted under the Exchange Act is recorded, processed,

summarized and reported within the time periods specified in the SEC’s rules and forms.

Disclosure controls and procedures include,

without limitation, controls and procedures designed to ensure that information required to be disclosed in our reports filed or submitted

under the Exchange Act is accumulated and communicated to management, including our Certifying Officers, or persons performing similar

functions, as appropriate, to allow timely decisions regarding required disclosure.

Based upon this evaluation,

and the above criteria, our CEO and CFO concluded that the Company’s disclosure controls and procedures were effective as of June

30, 2023 at the reasonable assurance level.

Changes in Internal Controls Over Financial

There were no changes in our

internal control over financial reporting during the quarter ended June 30, 2023 that have materially affected, or are reasonably likely

to materially affect, our internal control over financial reporting.

and the above criteria, our Certifying Officers concluded that the Company’s disclosure controls and procedures were not effective

as of September 30, 2023, at the reasonable assurance level due to a material weakness in our internal control over financial reporting,

described below, relating to errors in our accounting for warranty reserves.

in Internal Controls Over Financial Reporting.

Our internal control over

financial reporting did not identify an error in the accounting of our warranty reserves, relating to wholesale contracts.

our CEO and CFO have concluded that we did not maintain effective internal control over financial reporting, due to a material weakness

in our internal control over financial reporting, described below, related to errors in our accounting for warranty reserves.

In October 2023, we determined that we had not properly accounted for

the warranty terms specified in contracts with our wholesale customers when estimating the liability for warranty related returns.

As a result, our warranty reserves relating to wholesale customers were understated.

We determined the impact of this error on our previously

issued financial statements was immaterial, but that the cumulative effect would be material, if left uncorrected, in the current period.

Therefore, we elected to correct these errors in our financial statements as of and for the three and nine months ending September 30,

2023 included in this Quarterly Report on Form 10-Q by adjusting prior period financial statements.

In response to this material

weakness in internal control over financial reporting related to the accounting of our warranty reserves, we will implement a new control

to assess all wholesale customer contracts to ensure the terms contained therein are accounted for properly.

Our plans include increased

training and communication among our personnel regarding the appropriate consideration and application of contractual terms, including

legal to review all significant contracts and implementing new processes over credit memo approvals.

Our remediation plan can only be

accomplished over time and will be continually reviewed to determine that it is achieving its objectives.

We can offer no assurance that

these initiatives will ultimately have the intended effects.

Other than as described above

relating to the material weakness we identified, there were no changes in our internal control over financial reporting during the quarter

ended September 30, 2023 that have materially affected, or are reasonably likely to materially affect, our internal control over financial

OTHER INFORMATION

6 unchanged sentences

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