Item 4. Controls and Procedures
Item 4. Controls
and Procedures
Evaluation of Disclosure Controls and Procedures
We maintain disclosure
controls and procedures that are designed to ensure that material information required to be disclosed in our periodic reports
filed under the Securities Exchange Act of 1934, as amended, or 1934 Act, is recorded, processed, summarized, and reported within
the time periods specified in the SEC’s rules and forms and to ensure that such information is accumulated and communicated
to our management, including our chief executive officer and chief financial officer as appropriate, to allow timely decisions
regarding required disclosure. At the end of the quarter ended June 30, 2018, we carried out an evaluation, under the supervision
and with the participation of our management, including our principal executive officer and the principal financial officer, of
the effectiveness of the design and operation of our disclosure controls and procedures.
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We do not have an audit
committee: While we are not currently obligated to have an audit committee, including a member who is an “audit committee
financial expert,” as defined in Item 407 of Regulation S-K, under applicable regulations or listing standards; however,
it is management’s view that such a committee is an important internal control over financial reporting, the lack of which
may result in ineffective oversight in the establishment and monitoring of internal controls and procedures.
Based on this evaluation,
we determined that as of June 30, 2018, our disclosure controls and procedures were not effective due to the following:
· We do not have a majority of independent directors on our board of directors, which may result
in ineffective oversight in the establishment and monitoring of required internal controls and procedures.
· We have an inadequate number of personnel to properly implement control procedures.
· Due to the size and lack of resources of our Company, we have not fully developed formal accounting
policies and procedures.
· We have not properly complied with all aspects of the Internal Control-Integrated Framework issued
by the Committee of Sponsoring Organizations of the Treadway Commission (COSO) in 2013.
Limitations on Effectiveness of Controls
and Procedures
Our management, including
our Chief Executive Officer (Principal Executive Officer) and Chief Financial Officer (Principal Financial Officer), does not expect
that our disclosure controls and procedures will prevent all errors and all fraud. A control system, no matter how well conceived
and operated, can provide only reasonable, not absolute, assurance that the objectives of the control system are met. Further,
the design of a control system must reflect the fact that there are resource constraints and the benefits of controls must be considered
relative to their costs. Because of the inherent limitations in all control systems, no evaluation of controls can provide absolute
assurance that all control issues and instances of fraud, if any, within the Company have been detected. These inherent limitations
include, but are not limited to, the realities that judgments in decision-making can be faulty and that breakdowns can occur because
of simple error or mistake. Additionally, controls can be circumvented by the individual acts of some persons, by collusion of
two or more people, or by management override of the control. The design of any system of controls also is based in part upon certain
assumptions about the likelihood of future events and there can be no assurance that any design will succeed in achieving its stated
goals under all potential future conditions. Over time, controls may become inadequate because of changes in conditions, or the
degree of compliance with the policies or procedures may deteriorate. Because of the inherent limitations in a cost-effective control
system, misstatements due to error or fraud may occur and not be detected.
Changes in Internal Control Over Financial
Reporting
There were no changes in
our internal control over financial reporting during the three months ended June 30, 2018 that have materially affected or are
reasonably likely to materially affect our internal control over financial reporting.
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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.