Item 4. Controls and Procedures
ITEM 4. CONTROLS AND PROCEDURES
Conclusions of Management Regarding Effectiveness of Disclosure Controls and Procedures
At the end of the period covered by this Quarterly Report on Form 10-Q, an evaluation was carried out under the supervision and with the participation of the Company’s management, including the Principal Executive Officer (“PEO”) and Principal Financial Officer (“PFO”), of the effectiveness of the design and operations of the Company’s disclosure controls and procedures (as defined in Rule 13a – 15(e) and Rule 15d – 15(e) under the Exchange Act). Based on that evaluation, the PEO and the PFO have concluded that our disclosure controls and procedures were not effective in ensuring that: (i) information required to be disclosed by the Company in reports that it files or submits to the SEC under the Exchange Act is recorded, processed, summarized, and reported within the time periods specified in applicable rules and forms, and (ii) material information required to be disclosed in our reports filed under the Exchange Act is accumulated and communicated to our management, including our PEO and PFO, as appropriate, to allow for accurate and timely decisions regarding required disclosure.
The conclusion that our disclosure controls and procedures were not effective as of June 30, 2026 is a result of the previously identified material weakness in internal control over financial reporting described in Part II, Item 9A of the Company’s Annual Report on Form 10-K for the year ended December 31, 2025, which relates to insufficient qualified accounting personnel and the related design and operation of controls over the financial statement close and reporting process. Notwithstanding the material weakness, management has concluded that the unaudited condensed consolidated financial statements included in this Quarterly Report present fairly, in all material respects, the Company’s financial position, results of operations and cash flows for the periods presented in conformity with U.S. GAAP.
Management of the Company has taken proactive steps to address this material weakness by hiring employees to lead Sarbanes-Oxley compliance, SEC reporting, accounts payable, payroll, finance and accounting in Mexico and at BRZ, information technology, and the
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joint venture. In addition, the Company hired a third-party firm in 2025 to assist with the implementation of new accounting software and to assist with gaining compliance with Sarbanes-Oxley, all of which is ongoing.
Changes in Internal Control over Financial Reporting
Other than the continued remediation efforts discussed above related to the design and implementation of sufficient controls and processes around internal controls over financial reporting, there have been no changes during the quarter ended June 30, 2026 in the Company’s internal controls over financial reporting that have materially affected, or are reasonably likely to materially affect, internal controls over financial reporting.
PART II - OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS.
Information regarding the Company’s legal proceedings is included in Note 16—COMMITMENTS AND CONTINGENCIES to the unaudited condensed consolidated financial statements included in this Quarterly Report.
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.