QUANTUM X LABS INC. 10-Q

ITEM 4. CONTROLS AND PROCEDURES Evaluation of Disclosure Controls and Procedures As of September 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 September 30, 2023. The Company’s disclosure controls and procedures were determined to be not effective as of the end of September 30, 2023, as the assets of the acquired businesses, Gix Media and Cortex, which constitute substantially all of the Company’s assets as of September 30, 2023 and as of December 31, 2022, were excluded from management’s assessment of internal control over financial reporting as of December 31, 2022, as Gix Media and Cortex were determined, in accordance with the SEC staff guidance, to be an acquired business for financial reporting purposes as of December 31, 2022, following completion of the Reorganization Transaction on September 19, 2022. While the Company’s management continues to implement a compliance project, 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 September 30, 2023, as these controls have not operated and performed for a sufficient period of time to demonstrate that the Company’s disclosure controls and procedures are effective and as the Company has not completed the implementation of certain information technology controls underlying the financial information of Gix Media and Cortex. - 30 - Changes in Internal Control Over Financial Reporting Other than as described above, 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 September 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 September 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 have strengthened our internal control over financial reporting, we are required to have these controls operate and perform for a sufficient period, as well as to enhance certain information technology controls, 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. PART II - OTHER INFORMATION