Item 4. Controls and Procedures
Item
4. Controls and Procedures
Evaluation
of Disclosure Controls and Procedures
As
of the end of the period covered by this report, our principal executive officer and principal financial officer evaluated the effectiveness
of our 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”)). Based on their evaluation of our disclosure controls and procedures, our principal executive
officer and principal financial officer concluded that our disclosure controls and procedures were not effective as of June 30, 2022
to ensure that information required to be disclosed by the Company in the reports that we file or submit under the Exchange Act is (a)
recorded, processed, summarized, and reported within the time periods specified in the SEC’s rules and forms, and (b) accumulated
and communicated to management, including our principal executive officer and principal financial officer, as appropriate to allow for
timely decisions regarding required disclosures.
Description
of Material Weakness
Management
has concluded that the Company’s disclosure controls and procedures were not effective as of June 30, 2022 due to the lack of segregation
of duties and the failure to report disclosures on a timely basis.
Remediation
of Material Weakness
Management
has developed a plan and related timeline for the Company to design a set of control procedures and the related required documentation
thereof in order to address this material weakness. However, its implementation was delayed as a decline in commodity prices caused the
Company to pursue aggressive cost cutting and de-staffing which has increasingly concentrated duties on the remaining staff. Until the
Company has the proper staff in place, it likely will not be able to remediate its material weaknesses.
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 required by paragraph
(d) of Rules 13a-15 or 15d-15 under the Exchange Act that occurred during the current fiscal quarter that have materially affected, or
are reasonably likely to materially affect, our internal control over financial reporting.
29
PART
II – OTHER INFORMATION
Item
1.Legal Proceedings
In
the opinion of management, we are not involved in any claims, legal actions or regulatory proceedings as of June 30, 2022, the ultimate
disposition of which would have a material adverse effect on our condensed consolidated financial position, results of operations, or
cash flows.
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.