Item 4. Controls and Procedures
ITEM
4. CONTROLS AND PROCEDURES
Disclosure
Controls and Procedures
We have evaluated, under the supervision and with the participation of our management,
including our principal executive officer and principal financial officer, the effectiveness of our disclosure controls and procedures
(as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act) as of the end of the period covered by this Quarterly Report. Our
disclosure controls and procedures are designed to provide reasonable assurance that the information required to be disclosed by us in
reports that we file under the Exchange Act is accumulated and communicated to our management, including our principal executive officer
and principal financial officer, as appropriate to allow timely decisions regarding required disclosure, and is recorded, processed,
summarized and reported within the time periods specified in the rules and forms of the SEC. Based upon that evaluation, our principal
executive officer and principal financial officer concluded that our disclosure controls and procedures were not effective as of the
end of the period covered by this Quarterly Report, at the reasonable assurance level.
The
material weaknesses identified, and the related remediation plan are more fully described in our 2025 Form 10-K. The material weaknesses, summarized in the bullet points below, relate to the
fact that we did not design and maintain accounting policies, procedures and controls to ensure complete, accurate and timely
financial reporting in accordance with accounting principles generally accepted in the United States of America (“U.S.
GAAP”). Specifically, the material weaknesses identified included the following:
●
We did not design and maintain
formal accounting policies, procedures and controls to achieve complete, accurate and timely financial accounting, reporting and
disclosures, including controls over the preparation and review of account reconciliations, journal entries and classification of
certain costs;
●
We had not developed and
effectively communicated to our employees our accounting policies and procedures, which resulted in inconsistent practices. Since
these entity level programs have a pervasive effect across the organization, management has determined that these circumstances constitute
a material weakness;
●
We do not have sufficient,
qualified finance and accounting staff with the appropriate U.S. GAAP technical accounting expertise to identify, evaluate and account
for accounting and financial reporting, and effectively design and implement systems and processes that allow for the timely production
of accurate financial information in accordance with internal financial reporting timelines. As a result, we did not design and maintain
formal accounting policies, processes and controls related to complex transactions necessary for an effective financial reporting
process; and
●
As a high-growth, smaller
reporting company that became responsible for listed financial reporting, we have a limited staff and budget available to adequately
test and monitor the effectiveness of certain internal controls.
Changes
in Internal Control over Financial Reporting
There
were no changes in our internal control over financial reporting during the three months ended December 31, 2025, that have materially
affected or are reasonably likely to materially affect, our internal control over financial reporting, including any corrective actions
regarding significant deficiencies and material weaknesses.
Limitations
on Effectiveness of Controls and Procedures
In
designing and evaluating the disclosure controls and procedures, management recognizes that any controls and procedures, no matter how
well designed and operated, can provide only reasonable assurance of achieving the desired control objectives. In addition, the design
of disclosure controls and procedures must reflect the fact that there are resource constraints, and that management is required to apply
its judgment in evaluating the benefits of possible controls and procedures relative to their costs.
25
PART
II
OTHER
INFORMATION
ITEM
1. LEGAL PROCEEDINGS
During the quarter ended December 31,
2025 and through the filing date of this Quarterly Report, there were no material developments to the legal proceedings as disclosed
in Part I, Item 3 of the 2025 Form 10-K.
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.