Item 4. Controls and Procedures
ITEM
4. CONTROLS AND PROCEDURES
Evaluation
of Disclosure Controls and Procedures
As
of June 30, 2023, the Company’s chief executive officer and chief financial officer, conducted an evaluation (the “Evaluation”)
regarding the effectiveness of the Company’s disclosure controls and procedures (as defined in Rules 13a-15(e) or 15d-15(e) under
the Exchange Act). Based upon the Evaluation, as required by Rules 13a-15 or 15d-15, the Company’s chief executive officer and
chief financial officer concluded that, and pursuant to the Committee of Sponsoring Organizations of the Treadway Commission in Internal
Control-Integrated Framework (2013), the Company’s disclosure controls and procedures were not effective as of the end of June
30, 2023.
The
Company’s disclosure controls and procedures were determined to be not effective as of the end of June 30, 2023, as the assets
of the acquired businesses, Gix Media and Cortex, which were excluded from management’s assessment of internal control over financial
reporting, constitute substantially all the Company’s assets as of June 30, 2023.
General
guidance from the SEC staff provides that if a registrant consummates a material purchase business combination during its fiscal year
and it is not possible to conduct an assessment of the acquired business’s internal control over financial reporting during the
period between the consummation date and the date of management’s assessment, management may exclude the acquired business from
management’s report on internal control over financial reporting.
As
previously described in our financial statements for the fiscal year ended December 31, 2022, as the Reorganization Transaction was consummated
on September 19, 2022, Gix Media, and its subsidiary Cortex, are each determined to be an acquired business for financial reporting purposes.
In accordance with the SEC staff guidance, our management excluded Gix Media and Cortex, which each represent an acquired business, from
management’s report on internal control over financial reporting as of June 30, 2023.
The
financial statements of each of Gix Media and Cortex reflect total assets constituting approximately 99% of the assets of the Company
according to the related consolidated financial statements of the Company as of June 30, 2023. Because the assets of Gix Media and Cortex
have been excluded from management’s assessment of internal control over financial reporting, and such assets constitute substantially
all of the Company’s assets as of June 30, 2023, the Company’s management concluded that, pursuant to the Committee of Sponsoring
Organizations of the Treadway Commission in Internal Control-Integrated Framework (2013), the disclosure controls and procedures were
not effective as of the end of June 30, 2023.
Changes
in Internal Control Over Financial Reporting
There
were no changes in our internal control over financial reporting or in other factors identified in connection with the evaluation required
by paragraph (d) of Exchange Act Rules 13a-15 or 15d-15 that occurred during the quarter ended June 30, 2023, that have materially affected,
or are reasonably likely to materially affect, our internal control over financial reporting.
Management’s
Remediation Plan
During
the quarter ended June 30, 2023, our management continued to implement a compliance project designed to assist the Company with effectively
complying with the rules contemplated under the Sarbanes-Oxley Act of 2002. While we believe these measures will strengthen our internal
control over financial reporting, we are required to implement and enhance controls underlying the financial information of Gix Media
and Cortex as well as have these controls operate and perform for a sufficient period to demonstrate that the Company’s disclosure
controls and procedures are effective. We are committed to continuing to improve our internal control processes and will continue to
diligently review our financial reporting controls and procedures.
- 28 -
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.