Item 4. Controls and Procedures
Item 4. Controls and Procedures
The term “disclosure controls and procedures,” as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act, refers to controls and procedures that are designed to ensure that information required to be disclosed by a company in the reports that it files or submits under the Exchange Act is recorded, processed, summarized and reported, within the time periods specified in the SEC’s rules and forms. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed by a company in the reports that it files or submits under the Exchange Act is accumulated and communicated to the company’s management, including its principal executive and principal financial officers, or persons performing similar functions, as appropriate to allow timely decisions regarding required disclosure. In designing and evaluating our 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 there are resource constraints and management is required to apply judgment in evaluating the benefits of possible controls and procedures relative to their costs.
27
Our management, with the participation of our Chief Executive Officer (Principal Executive Officer) and Chief Financial Officer (Principal Financial Officer and Principal Accounting Officer), evaluated the effectiveness of our disclosure controls and procedures pursuant to Rules 13a-15(e) and 15d-15(e) under the Exchange Act. 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.
Based on management’s evaluation, our Chief
Executive Officer and Chief Financial Officer concluded that, as a result of the material weaknesses described below, as of March 31,
2025, our disclosure controls and procedures are not designed at a reasonable assurance level and are ineffective to provide reasonable
assurance that information we are required to disclose in reports that we file or submit under the Exchange Act is recorded, processed,
summarized, and reported within the time periods specified in SEC rules and forms, and that such information is accumulated and communicated
to our management, including our Chief Financial Officer, as appropriate, to allow timely decisions regarding required disclosure. The
material weaknesses, which relate to internal control over financial reporting, that were identified are: (1) We did not have enough
personnel in our accounting and financial reporting functions. Due to insufficient personnel in our accounting department, we were not
able to achieve adequate segregation of duties, and, as a result, we did not have adequate review controls surrounding: (i) our technical
accounting matters in our financial reporting process, and (ii) the work of specialists involved in the estimation process. (2) Due to
certain relationships with a banking institution and consultants we were not able to achieve adequate controls surrounding the review
and dual authorization of certain treasury transactions and fixed assets. (3) We do not always follow certain review and authorization
procedures related to corporate governance and the release of information to the public. After failing to adhere to certain corporate
governance administrative procedures, we did not achieve adequate review at the executive or independent Board of Director level over
certain accounting and risk assessments or the timely reporting of material transactions. We also did not achieve adequate review of
certain public reports and disclosures prior to the public disclosure of the information. These control deficiencies, which are pervasive
in nature, result in a reasonable possibility that material misstatements of the financial statements will not be prevented or detected
on a timely basis. Management believes that the hiring of additional personnel who have the technical expertise and knowledge will result
in both proper drafting, review, authorization, recording and reporting of these transactions. Since our assessment as of March 31,
2025, we continue to seek to retain additional experienced personnel, and we are working to retain additional qualified valuation experts
that report on their internal controls. We have also implemented further review controls and processes surrounding treasury and fixed
assets, and the Audit Committee is reviewing the material weaknesses, and will be making recommendations to the Company on implementing
further internal controls to assist the Company to adhere to its corporate review, authorization, and reporting policies.
We will continue to monitor and evaluate the effectiveness of our disclosure controls and procedures and our internal controls over financial reporting on an ongoing basis and are committed to taking further action and implementing additional enhancements or improvements, as necessary and as funds allow.
Changes in Internal Control Over Financial Reporting
As noted above, we continue to contract with additional external accounting staff in order to attempt to remediate our material weaknesses. Such changes include multiple additional reviewers of financial information before it is submitted for filing with the SEC. There were no other changes in our internal controls identified in connection with the evaluation required by paragraph (d) of Rule 13a-15 or 15d-15 under the Exchange Act that occurred during the three months ended March 31, 2025 that have materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.
28
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.