Item 4. Controls and Procedures
Item 4. Controls and Procedures.
Evaluation
of Disclosure Controls and Procedures
As
of March 31, 2026, the Company carried out an evaluation under the supervision and with the participation of its Chief Executive Officer
(CEO) and Chief Financial Officer (CFO), of the effectiveness of the Company’s disclosure controls and procedures (as defined in
Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended (the “Exchange Act”). The Company has
designed these controls and procedures to ensure that information the Company is required to disclose in reports filed under the Exchange
Act is recorded, processed, summarized, and reported within the time periods specified in the SEC’s rules and forms, and is accumulated
and communicated to Company management, including the Company’s CEO and CFO, as appropriate, to allow timely decisions regarding
required disclosure.
The
executive officers have concluded that the Company’s disclosure controls and procedures were not effective as of March 31, 2026,
because of the material weakness in the Company’s internal control over financial reporting described below. This material weakness
was also identified during the fourth quarter of 2025 and is disclosed in the Company’s Annual Report on Form 10-K along with the
report of the Company’s registered public accounting firm.
The
Company identified a material weakness related to information technology general controls (“ITGCs”) because the Company did
not design and maintain effective ITGCs for information systems that are relevant to the preparation of the financial statements. Specifically,
deficiencies were identified related to user access controls and program change management controls for financial systems. These deficiencies
resulted in related control deficiencies with respect to information generated from the impacted systems and used in the performance
of controls relevant to the preparation of the financial statements. The material weakness related to the ITGCs did not result in adjustments
to the financial statements for the quarter ended March 31, 2026.
Changes
in Internal Control over Financial Reporting
The
Company is taking actions to remediate the material weakness relating to its internal control over financial reporting. Other than the
changes to the Company’s internal control over financial reporting described in “Remediation Plan and Status” below,
there were no changes to the Company’s internal control over financial reporting as defined by Rule 13a-15(f) under the Exchange
Act during the quarter ended March 31, 2026 that have materially affected, or are reasonably likely to materially affect, the Company’s
internal control over financial reporting.
Remediation
Plan and Status
The
Company is committed to remediating its material weaknesses as promptly as possible. Management is in the process of implementing its
remediation plan. Management will test the ongoing operating effectiveness of the new and existing controls in future periods. The material
weaknesses cannot be considered completely remediated until the applicable controls have operated for a sufficient period of time and
management has concluded, through testing, that these controls are operating effectively.
81
Part
II - Other Information
Item
1. Legal Proceedings .
The
Company is not a party to any material legal proceedings outside the ordinary course of business or to any other legal proceedings, which
if adversely determined, would be expected to have a material adverse effect on its financial condition or results of operations.
Item 1A. Risk Factors.
As
a smaller reporting company, the Company is not required to provide information typically disclosed under this item.
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.