What changed in this filing

/stocks — the workspaceLOADING

Item 4. Controls and Procedures

2022-05-09 compared with 2022-02-09 · 23 added, 46 removed, 3 unchanged (96% of the section changed)

Controls and Procedures.

of Disclosure Controls and Procedures

Company maintains disclosure controls and procedures, defined in Rule 13a-15(e) under the Exchange Act, that are designed to ensure that

the information required to be filed or submitted with the SEC under the Exchange Act is recorded, processed, summarized and reported,

within the time periods specified in the SEC’s rules and forms, and that such information is accumulated and communicated to management

of the company with the participation of its principal executive officer and principal financial officer, as appropriate to allow timely

decisions regarding required disclosure.

connection with the preparation of this Quarterly Report on Form 10-Q for the quarter ended December 31, 2021, an evaluation was performed

under the supervision and with the participation of management, including the chief executive officer and chief financial officer, of

the effectiveness of the design and operation of the Company’s disclosure controls and procedures.

Based on their evaluation, they

have concluded that our disclosure controls and procedures were not effective as of December 31, 2021.

This determination is based on

the previously reported material weakness management previously identified in our internal control over financial reporting, as described

We are in the process of remediating the material weakness in our internal control, as described below.

We believe the completion

of these processes should remedy our disclosure controls and procedures.

Evaluation of Disclosure Controls and Procedures

The Company maintains disclosure controls and procedures, defined in Rule 13a-15(e) under the Exchange Act, that are designed to ensure that the information required to be filed or submitted with the SEC under the Exchange Act is recorded, processed, summarized and reported, within the time periods specified in the SEC’s rules and forms, and that such information is accumulated and communicated to management of the company with the participation of its principal executive officer and principal financial officer, as appropriate to allow timely decisions regarding required disclosure.

In connection with the preparation of this Quarterly Report on Form 10-Q for the quarter ended March 31, 2022, an evaluation was performed under the supervision and with the participation of management, including the chief executive officer and chief financial officer, of the effectiveness of the design and operation of the Company’s disclosure controls and procedures.

Based on their evaluation, they have concluded that our disclosure controls and procedures were not effective as of March 31, 2022.

This determination is based on the previously reported material weakness management previously identified in our internal control over financial reporting, as described below.

We are in the process of

remediating the material weakness in our internal control, as described below.

We believe the completion of these processes should remedy our disclosure controls and procedures.

We will continue to monitor these issues.

Reported Material Weakness in Internal Control Over Financial Reporting

our Annual Report for the year ended September 30, 2021, filed with the SEC on December 14, 2021, management concluded

that our internal control over financial reporting was not effective as of September 30, 2021.

In the evaluation, management identified

a material weakness in internal control related to the proper design and implementation of controls over our estimates relating to

the impairment of goodwill, indefinite-lived intangibles and long-lived assets, specifically over the precision of management’s

review of certain assumptions.

Efforts to Address Material Weakness

is committed to the remediation of the material weakness described above, as well as the continued improvement of the Company’s

internal control over financial reporting.

As such, we are in the process of adding controls to increase the precision of the review

of all assumptions used in the impairment valuation model.

We will also conduct senior management reviews of any and all material estimates

that are applied in these instances.

is our belief that these actions will effectively remediate the existing material weakness.

in Internal Control Over Financial Reporting

On October 18, 2021, we completed our

acquisition of eleven gentlemen’s clubs, six related real estate properties, and associated intellectual property (see Note 4

to our unaudited condensed consolidated financial statements).

Management has considered this transaction material to the results of

operations, cash flows, and financial position from the date of acquisition through December 31, 2021, and believes that the

internal controls and procedures of the acquisition have a material effect on internal controls over financial reporting.

currently in the process of incorporating the internal controls of the acquired group into the internal controls over financial

reporting for our assessment of and report on internal controls over financial reporting for September 30, 2023.

than as described above, there were no changes in the Company’s internal control over financial reporting that occurred

during the quarter ended December 31, 2021 that have materially affected, or are reasonably likely to materially affect, the Company’s

internal control over financial reporting.

II—OTHER INFORMATION

Previously Reported Material Weakness in Internal Control Over Financial Reporting

In our Annual Report for the year ended September 30, 2021, filed with the SEC on December 14, 2021, management concluded that our internal control over financial reporting was not effective as of September 30, 2021.

In the evaluation, management identified a material weakness in internal control related to the proper design and implementation of controls over our estimates relating to the impairment of goodwill, indefinite-lived intangibles and long-lived assets, specifically over the precision of management’s review of certain assumptions.

Remediation Efforts to Address Material Weakness

Management is committed to the remediation of the material weakness described above, as well as the continued improvement of the Company’s internal control over financial reporting.

As such, we are in the process of adding controls to increase the precision of the review of all assumptions used in the impairment valuation model.

We will also conduct senior management reviews of any and all material estimates that are applied in these instances.

It is our belief that these actions will effectively remediate the existing material weakness.

Changes in Internal Control Over Financial Reporting

On October 18, 2021, we completed our acquisition of eleven gentlemen’s clubs, six related real estate properties, and associated intellectual property (see Note 4 to our unaudited condensed consolidated financial statements).

Management has considered this transaction material to the results of operations, cash flows, and financial position from the date of acquisition through March 31, 2022, and believes that the internal controls and procedures of the acquisition have a material effect on internal controls over financial reporting.

We are currently in the process of incorporating the internal controls of the acquired group into the internal controls over financial reporting for our assessment of and report on internal controls over financi al reporting for September 30, 2023.

Other than as described above, there were no changes in the Company’s internal control over financial reporting that occurred during the quarter ended March 31, 2022 that have materially affected, or are reasonably likely to materially affect, the Company’s internal control over financial reporting.

PART II—OTHER INFORMATION

Legal Proceedings.

the “Legal Matters” section within Note 10 of the unaudited condensed consolidated financial statements within this Quarterly

Report on Form 10-Q, which information is incorporated herein by reference.

See the “Legal Matters” section within Note 10 of the unaudited condensed consolidated financial statements within this Quarterly Report on Form 10-Q, which information is incorporated herein by reference.

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