Zedge, Inc. 10-Q

Item 4. Controls and Procedures Evaluation of Disclosure Controls and Procedures . Our Chief Executive Officer and Chief Financial Officer have evaluated the effectiveness of our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) of the Securities Exchange Act of 1934, as amended), as of October 31, 2021. Based on this evaluation, our Chief Executive Officer and Chief Financial Officer have concluded that our disclosure controls and procedures were not effective as of October 31, 2021 due to the material weakness in our internal control over financial reporting described below. Previously Reported Material Weakness As disclosed in Item 9A. “Controls and Procedures” of our Form 10-K for the fiscal year ended July 31, 2021, we previously identified a material weakness in our internal control over financial reporting related to our disclosure controls and procedures over the evaluation of the valuation allowance against deferred tax assets, which has been outsourced to an outside accounting firm since fiscal 2018, which were not operating effectively. Remediation The outside accounting firm has agreed to appoint another tax partner to perform a final review of the tax provision work prepared by the engagement team. We will continue to monitor the effectiveness of this additional procedure and control and make any further changes management deems appropriate. Changes in Internal Control over Financial Reporting. Other than the remediation efforts described above, there were no changes in our internal control over financial reporting during the quarter ended October 31, 2021 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting. 24 PART II. OTHER INFORMATION Item 1. Legal Proceedings Legal proceedings in which we are involved are more fully described in Note 8 to the Consolidated Financial Statements included in Item 1 to Part I of this Quarterly Report on Form 10-Q. Item 1A. Risk Factors There are no other material changes from the risk factors previously disclosed in Item 1A to Part I of our Annual Report on Form 10-K for the fiscal year ended July 31, 2021. Item 2. Unregistered Sales of Equity Securities and Use of Proceeds None Item 3. Defaults Upon Senior Securities None Item 4. Mine Safety Disclosures Not applicable