What changed in this filing

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Item 4. Controls and Procedures

2021-08-16 compared with 2021-02-22 · 30 added, 44 removed, 4 unchanged (95% of the section changed)

CONTROLS AND PROCEDURES

Evaluation of Disclosure Controls and Procedures.

of the end of the period covered by this Quarterly Report, we conducted an evaluation as required by Rule 13a-15(b) and Rule 15d-15(b)

of the Exchange Act, under the supervision and with the participation of our Chief Executive Officer and Chief Financial Officer

of our disclosure controls and procedures (as defined in Rule 13a-15(e) and Rule 15d-15(e) of the Exchange Act).

Based upon this

evaluation, our Chief Executive Officer and Chief Financial Officer concluded that due to the material weakness described below,

our disclosure controls and procedures were not effective at a reasonable assurance level as of the end of the period covered

by this Report.

system of 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 for external purposes in accordance with generally accepted

accounting principles.

A material weakness is any deficiency, or combination of deficiencies, in internal control over financial

reporting, such that there is a reasonable possibility that a material misstatement of our company’s annual or interim financial

statements will not be prevented or detected on a timely basis.

upon this evaluation, our Chief Executive Officer and Chief Financial Officer concluded that our internal control over financial

reporting was not effective as of the period covered by this Quarterly Report.

the initial filing of our Form 10-K for the year ended March 31, 2020, our Forms 10-Q for the three months ended June 30, 2020

the six months ended September 30, 2020, management identified a material weakness in our internal controls over financial reporting

that existed as of the dates of those filings related to the design and implementation of control activities intended to mitigate

the risk that transactions be incorrectly accounted for in accordance with generally accepted accounting principles.

Specifically,

we did not maintain effective internal controls over the accounting for costs related to our co-op promotion allowances, pursuant

to ASC 606, Revenue from Contract with Customers, as we incorrectly recorded these allowances as selling expenses when they should

be recorded as a reduction in net sales.

This material weakness resulted in material misstatements to the consolidated statements

of operations for the aforementioned periods.

The consolidated balance sheets, statement of cash flows, statement of shareholders’

equity, net income or loss for the affected periods remained unaffected.

(a)Evaluation

of Disclosure Controls and Procedures.

As of the end of the period covered by this report, we conducted an evaluation, under

the supervision and with the participation of our chief executive officer and chief financial officer of our disclosure controls and

procedures (as defined in Rule 13a-15(e) and Rule 15d-15(e) of the Exchange Act).

Based upon this evaluation, our chief executive officer

and chief financial officer concluded that our disclosure controls and procedures are not effective to ensure that information required

to be disclosed by us in the reports that we file or submit under the Exchange Act is recorded, processed, summarized and reported, within

the time periods specified in the Commission’s rules and forms and is accumulated and communicated to the Company’s management,

including its Chief Executive Officer and Chief Financial Officer, as appropriate, to allow timely decisions regarding required disclosure.

connection with the filing of our Form 10-K for the year ended March 31, 2021, we identified a material weakness primarily related to

the consolidated financial statements close process that failed to detect errors which could have been material in the accounting for

inventory cutoff and the inventory valuation of estimated returns.

Specifically, the Company currently has a deficient process to close

the consolidated financial statements and prepare comprehensive and timely account analysis, due in part to a new accounting software

system, which resulted in certain adjusting journal entries.

for material Weakness in Internal Control over Financial Reporting

Company’s management has begun to design and implement certain remediation measures to address the above-described material

weakness and enhance the Company’s internal control in order to remediate this material weakness.

As part of our remediation

measures, the Company has identified and will implement plans to enhance the Company’s process and controls including ensuring

adequate resources and use of accounting experts for guidance in the application of new accounting standards.

Company’s management has begun to design and implement certain remediation measures to address the above-described material weakness

and enhance the Company’s internal control in order to remediate this material weakness.

As part of our remediation measures, the

Company has identified and will implement plans to enhance the Company’s process and controls including the following measures:

Company implemented a new Enterprise Resource Planning (“ERP”) system in Fiscal 2021 that contributed to the material

Management has identified system processing errors specifically related to when returned goods are recognized in inventory

and how they are costed.

Management is currently working with our third-party systems support group to correct these system errors.

plans on strengthening the ERP system training for both finance and warehouse personnel with regards to inventory cutoff and valuation

procedures to insure personnel working with inventory are thoroughly familiar with procedures for processing returns.

will also assess whether current resources are adequate to maintain proper inventory controls once the system errors have been remediated

and additional training is completed and will explore the possibility of additional third-party assistance if necessary.

Changes in Internal Controls

There was no change in our internal control over financial reporting identified in

connection with the evaluation required by paragraph (d) of Rules 13a-15 or 15d-15 under the Exchange Act that occurred during

the period covered by this report that has materially affected or is reasonably likely to materially affect our internal control

over financial reporting.

were no changes in the Company’s internal controls over financial reporting during the quarter ended June 30, 2021, that materially

affected, or were reasonably likely to materially affect the Company’s internal control over financial reporting.

II - OTHER INFORMATION

LEGAL PROCEEDINGS

is not aware of any legal proceedings other than matters that arise in the ordinary course of business.

applicable for smaller reporting companies

UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

DEFAULTS UPON SENIOR SECURITIES

are not currently in default upon any of our senior securities.

MINE SAFETY DISCLOSURES

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