Item 4. Controls and Procedures
ITEM 4. CONTROLS AND PROCEDURES
As of the end of the period covered by this Quarterly
Report on Form 10-Q, we carried out an evaluation, under the supervision and with the participation of the Company’s management,
including our Chief Executive Officer and Chief Financial Officer, of the effectiveness of the design and operation of our disclosure
controls and procedures pursuant to Exchange Act Rule 13a-15. Based upon this evaluation, the Chief Executive Officer and Chief Financial
Officer each concluded that our disclosure controls and procedures were not effective to provide reasonable assurance that information
required to be disclosed by us in the reports that we file or submit under the Exchange Act is recorded, processed, summarized and reported
within the time periods specified by the SEC’s rules and forms, and that such information has been accumulated and communicated
to our management, including our Chief Executive Officer and Chief Financial Officer, in a manner that allows timely decisions regarding
required disclosure.
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In
evaluating the effectiveness of our internal control over financial reporting, our management used the criteria set forth by the Committee
of Sponsoring Organizations of the Treadway Commission (COSO) in Internal Control - Integrated Framework 2013. Based on this evaluation,
our Chief Executive Officer and our Chief Financial Officer determined, based upon the existence of the material weakness described below,
that we did not maintain effective internal control over financial reporting as of September 30, 2021.
●
We
did not design or maintain an effective control environment commensurate with the financial reporting requirements. Specifically,
we lack a sufficient number of professionals with an appropriate level of accounting knowledge, training and experience to appropriately
analyze, record and disclose accounting matters timely and accurately while maintaining appropriate segregation of duties. Without
such professionals, 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
and journal entries.
The
lack of adequate staffing levels resulted in insufficient time spent on review and approval of certain information used to prepare our
financial statements and the maintenance of effective controls to adequately monitor and review significant transactions for financial
statement completeness and accuracy. These control deficiencies, although varying in severity, contributed to the material weakness in
the control environment. If one or more material weaknesses persist or if we fail to establish and maintain effective internal control
over financial reporting, our ability to accurately report our financial results could be adversely affected.
The
above material weakness did not result in a material misstatement of our previously issued financial statements, however, it could result
in a misstatement of our account balances or disclosures that would result in a material misstatement of our annual or interim financial
statements that would not be prevented or detected.
Management
is taking steps to remediate the material weakness in our internal control over financial reporting. To address the issues, we plan to
hire additional personnel. Specifically, management will:
●
Increase
the number of accounting personnel;
●
Begin
discussions with third party experts to assist management in completing a comprehensive risk assessment to identify, design and implement
control activities; and
●
Begin
reviewing and enhancing business policies, procedures and related internal controls to standardize business processes.
We
expect to complete the remediation by the end of 2022. We expect to incur additional costs to remediate this weakness, primarily personnel
costs.
Changes
in Internal Control Over Financial Reporting
There have been no changes in our internal control
over financial reporting identified in connection with the evaluation that occurred during the third quarter ended September 30, 2021
that have materially affected, or are reasonably likely to materially affect, the 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.