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Item 4. Controls and Procedures

2025-05-12 compared with 2025-02-10 · 32 added, 13 removed, 38 unchanged (54% of the section changed)

2 unchanged sentences

We maintain disclosure controls and procedures that are designed to ensure that information required to be disclosed in our Exchange Act reports 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 our management, including our Chief Executive Officer (“CEO”) and Chief Financial Officer (“CFO”), as appropriate, to allow timely decisions regarding required disclosure.

An evaluation of the effectiveness of our “disclosure controls and procedures” (as such term is defined in Rules 13a-15(e) or 15d-15(e) of the Exchange Act) as of December 31, 2024 was carried out by our management under the supervision and with the participation of our CEO and CFO.

Based on this evaluation, our CEO and CFO concluded that our disclosure controls and procedures were ineffective as of December 31, 2024 due to the existence of the material weakness in internal control over financial reporting described below.

An evaluation of the effectiveness of our “disclosure controls and procedures” (as such term is defined in Rules 13a-15(e) or 15d-15(e) of the Exchange Act) as of March 31, 2025 was carried out by our management under the supervision and with the participation of our CEO and CFO.

Based on this evaluation, our CEO and CFO concluded that our disclosure controls and procedures were ineffective as of March 31, 2025 due to the existence of the material weakness in internal control over financial reporting described below.

Management believes that the condensed consolidated financial statements included in this Quarterly Report on Form 10-Q fairly present, in all material respects, our financial position, results of operations, and cash flows as of and for the periods presented, in accordance with U.S.

10 unchanged sentences

Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

As of December 31, 2024, we concluded that our internal control over financial reporting was not effective due to the material weakness discussed below.

As of March 31, 2025, we concluded that our internal control over financial reporting was not effective due to the material weakness discussed below.

A material weakness is a deficiency, or a combination of deficiencies in internal control over financial reporting, such that there is a reasonable possibility that a material misstatement of the Company’s annual or interim consolidated financial statements will not be prevented or detected on a timely basis.

1 unchanged sentence

As of June 30, 2023, we concluded that a material weakness existed in our internal controls over financial reporting related to the recording and processing of revenues.

As of December 31, 2024, remediation was ongoing.

As such, as of December 31, 2024, we concluded that a material weakness still existed in our internal controls over financial reporting related to the recording and processing of revenues.

As of March 31, 2025, remediation was ongoing.

As such, as of March 31, 2025, we concluded that a material weakness still existed in our internal controls over financial reporting related to the recording and processing of revenues.

Specifically, the controls as currently designed are not sufficient to prevent or detect a material misstatement in revenues as the design of the controls lack the level of precision necessary to ensure the completeness and accuracy of revenues.

During fiscal year 2024, management made significant progress designing and implementing a series of new, or enhanced existing controls aimed at mitigating risks associated with the accuracy, completeness, occurrence, and cut-off of reported revenue.

During fiscal year 2024 and 2025, management made significant progress designing and implementing a series of new, or enhanced existing controls aimed at mitigating risks associated with the accuracy, completeness, occurrence, and cut-off of reported revenue.

This included a series of controls operating at various frequencies and levels of precision to detect material misstatements, including, among others:

8 unchanged sentences

As management has evaluated, designed and implemented the processes needed to remediate its internal controls weakness, it has done so in light of, among others:

controls, the Company’s ultimate billing and collection processes continue to work on a commercially sound basis and the condensed consolidated financial statements included in this Quarterly Report on Form 10-Q continue to fairly present, in all material respects, our financial position, results of operations, and cash flows as of and for the periods presented, in accordance with U.S.

(a) the need to design and implement such processes in a manner that will not disrupt, to the best extent possible, the historic commercial processes that the Company has deployed across its network of Company-owned and strategic operating partner locations since its inception, and (b) management’s firm belief that, despite the material weakness in process and controls, the Company’s ultimate billing and collection processes continue to work on a commercially sound basis and the condensed consolidated financial statements included in this Quarterly Report on Form 10-Q continue to fairly present, in all material respects, our financial position, results of operations, and cash flows as of and for the periods presented, in accordance with U.S.

No further errors requiring restatement have been identified.

Management believes that the suite of controls it has implemented or enhanced during fiscal year 2024 and 2025, which operate at various frequencies and levels of precision, will provide reasonable assurance that a potential material misstatement in revenue would be prevented or detected in a timely manner.

Management has implemented targeted enhancements to refine control precision, which improvements have not yet been fully tested to confirm implementation and effectiveness.

We may also need to refine the underlying design and implementation as we continue to evaluate the manner in which they operate over a longer period before concluding that the material weakness has been resolved.

Nevertheless, in recognition of the progress made during fiscal year 2024, and management’s resolve to address the remaining weakness, it is our goal to resolve the material weakness in fiscal year 2025.

These controls are in the process of being fully tested for operating effectiveness.

Testing and monitoring will continue through year-end to obtain reasonable assurance that a potential material misstatement in revenue would be prevented or detected in a timely manner.

Nevertheless, in recognition of the progress made, and management’s resolve to address the remaining weakness, it is our goal to resolve the material weakness in fiscal year 2025.

Changes in Internal Control over Financial Reporting

Except for the remediation activities of the material weakness over the recording and processing of revenue transactions described above, there have not been any other changes in our internal control over financial reporting (as defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act) that occurred during the fiscal quarter ended December 31, 2024 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

Except for the remediation activities of the material weakness over the recording and processing of revenue transactions described above, there have not been any other changes in our internal control over financial reporting (as defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act) that occurred during the fiscal quarter ended March 31, 2025 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

OTHER INFORMATION

4 unchanged sentences

There have been no material changes in the risk factors disclosed by us under Part I, Item 1A.

Risk Factors contained in the Annual Report on Form 10-K for the fiscal year ended June 30, 2024.

Risk Factors contained in the Annual Report on Form 10-K for the fiscal year ended June 30, 2024, other than the new and revised risk factors below.

Changes in U.S.

trade policy and the impact of tariffs may have a material adverse effect on our business and results of operations.

Our business and results of operations may be adversely affected by uncertainty and changes in U.S.

trade policies, including tariffs, trade agreements or other trade restrictions imposed by the United States or other governments.

For example, on March 12, 2025, the U.S.

government imposed a 25% tariff on steel imports, and on April 2, 2025, the U.S.

government announced a 10% tariff on product imports from almost all countries and individualized higher tariffs on certain countries.

Several tariff announcements have been followed by announcements of limited exemptions and temporary pauses.

These actions are unprecedented, have caused substantial uncertainty and volatility in financial markets and may result in retaliatory measures on U.S.

Tariffs imposed to date have caused freight volumes to decline, which may have a material adverse effect on our business and results of operations.

The imposition of further tariffs by the U.S.

and retaliatory trade measures taken by other countries in response to tariffs imposed by the U.S.

could cause freight volumes to decline further and/or for greater lengths of time, which could adversely affect our results of operations.

The impact of these trade measures on our business operations and financial results remains uncertain and may be affected by various factors, including whether and when such trade measures are implemented, the timing when such measures may become effective, and the amount, scope, or nature of such trade measures, and our ability to execute strategies to mitigate the negative impacts.

Comparisons of our operating results from period to period are not necessarily meaningful and should not be relied upon as an indicator of future performance.

Our operating results have fluctuated in the past and likely will continue to fluctuate in the future because of a variety of factors, many of which are beyond our control including inflationary pressures and supply chain disruptions.

A substantial portion of our revenue is derived from customers in industries whose shipping patterns are tied closely to economic trends, such as inflation, supply chain irregularities, the impacts of tariffs on international trade, and consumer demand that can be difficult to predict or are based on just-in-time production schedules.

Because our quarterly revenues and operating results vary significantly, comparisons of our results from period to period are not necessarily meaningful and should not be relied upon as an indicator of future performance.

Additionally, the timing of acquisitions, as well as the revenue and expenses of the acquired operations, the transaction expenses, amortization of intangible assets, and interest expense associated with acquisitions can make our operating results from period to period difficult to compare.

Accordingly, there can be no assurance that our historical operating patterns will continue in future periods or that comparisons to prior periods will be meaningful.

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