Item 4. Controls and Procedures
Item 4. Controls and Procedures.
Evaluation of Disclosure Controls and Procedures
Under the supervision and with the participation of our management, including our principal executive officer and principal financial and accounting officer, we conducted an evaluation of the effectiveness of our disclosure controls and procedures as of September 30, 2025, as such term is defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act.
As a result of the material weakness in our internal controls over financial reporting, as described in Part II, “Item 9A, Controls and Procedures” in our Annual Report on Form 10-K for the year ended March 31, 2025 (the “Annual Report”), our principal executive officer and principal financial and accounting officer concluded that during the period covered by this Quarterly Report our disclosure controls and procedures were not effective as of September 30, 2025. Notwithstanding this material weakness, management has concluded that the condensed consolidated financial statements included in this Quarterly Report are fairly stated in all material respects in accordance with U.S. GAAP.
Remediation Plan and Status of Material Weaknesses
As disclosed in our Annual Report, we successfully remediated three of four material weaknesses related to (i) segregation of duties, (ii) lack of qualified personnel for complex accounting transactions, and (iii) ineffective risk assessment processes as of March 31, 2025. However, the material weakness related to the improper design of control activities to address certain risks of material misstatement, specifically related to our third-party Recorded Music royalty system, remains unremediated as of September 30, 2025.
We continue to take steps to remediate the material weakness described in our Annual Report. This includes, but is not limited to, providing training to process and control owners, enhancing relevant policies, procedures, guidelines and documentation templates, implementing new controls, and improving documentation supporting existing controls over the third-party Recorded Music royalty system, and other relevant areas. The evaluation over whether these improved control activities have been designed and are operating effectively, is ongoing.
We will not be able to fully remediate this material weakness until the applicable controls operate for a sufficient period of time, and we have concluded, through testing, that the newly implemented and enhanced controls are operating effectively. Our management will continue to monitor the effectiveness of our remediation plans in future periods and will make changes we determine to be appropriate.
Changes in Internal Control over Financial Reporting
Except as disclosed above, there have been no changes in our internal control over financial reporting (as such term is defined in Rules 13a-15(f) and 15d-15(f) of the Exchange Act) during the three months ended September 30, 2025 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.
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Table of Contents
PART II - OTHER INFORMATION
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