Item 4. Controls and Procedures
ITEM 4. CONTROLS AND PROCEDURES.
Evaluation of Disclosure Controls and Procedures
We maintain “disclosure controls and procedures,”
as such term is defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act, that are designed to ensure information required to be
disclosed in our reports that we file or furnish pursuant to the Exchange Act is recorded, processed, summarized, and reported within
the time periods specified in the rules and forms of the SEC, and that such information is accumulated and communicated to our management,
including our Chief Executive Officer (our principal executive officer) and Chief Financial Officer (our principal financial officer),
as appropriate to allow for timely decisions regarding required disclosure.
Our management, with the participation of our
Chief Executive Officer and Chief Financial Officer, has evaluated the effectiveness of our disclosure controls and procedures as of March
31, 2026. Based on such evaluation, our Chief Executive Officer and Chief Financial Officer have concluded that, as of such date, our
disclosure controls and procedures were not effective at a reasonable assurance level due to the material weaknesses in internal control
over financial reporting described in Item 9A “Controls and Procedures” of the Form 10-K, which we are still in the process
of remediating as of March 31, 2026. Investors are directed to Item 9A of the Form 10-K for the description of these weaknesses. Notwithstanding
the identified material weaknesses, management, including our Chief Executive Officer and Chief Financial Officer, believes the unaudited
condensed consolidated financial statements included in this report fairly represent, in all material respects, our financial condition,
results of operations and cash flows as of and for the periods presented in accordance with United States generally accepted accounting
principles.
Changes in Internal Control over Financial
Reporting
We regularly review our system of internal control
over financial reporting and make changes to our processes and systems to improve controls and increase efficiency, while ensuring that
we maintain an effective internal control environment. Changes may include such activities as implementing new, more efficient systems,
consolidating activities, and migrating processes.
Other than in connection with the remedial measures
described below, there were no changes in our internal control over financial reporting (as defined in Rules 13a-15(f) and 15d-15(f) under
the Exchange Act) during the period covered by this report that have materially affected or are reasonably likely to materially affect
our internal control over financial reporting.
As disclosed in the Form 10-K, our management
has identified the steps necessary to address the material weaknesses, and in the third quarter of fiscal year 2026, we continued to implement
the following remedial procedures. We are planning on implementing measures designed to improve our internal control over financial reporting
to remediate these material weaknesses, including formalizing our processes and internal control documentation and strengthening supervisory
reviews by our financial management and hiring additional qualified accounting and finance personnel and engaging financial consultants
to enable the implementation of internal control over financial reporting and segregating duties amongst accounting and finance personnel.
While we are implementing these measures, we cannot
assure you that these efforts will remediate our material weaknesses and significant deficiencies in a timely manner, or at all, or prevent
restatements of our financial statements in the future. If we are unable to successfully remediate our material weaknesses, or identify
any future significant deficiencies or material weaknesses, the accuracy and timing of our financial reporting may be adversely affected,
we may be unable to maintain compliance with securities law requirements regarding timely filing of periodic reports, and the market price
of our class B common stock may decline as a result.
Our management, including our principal
executive officer and principal financial officer, do not expect that our disclosure controls and procedures or our internal control
over financial reporting will prevent all errors and all fraud. Our 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, and
management necessarily is required to apply its judgment in evaluating the cost-benefit relationship of possible controls and
procedures. Further, the design of a control system must reflect the fact that there are resource constraints, and the benefits of
controls must be considered relative to their costs. Because of the inherent limitations in all control systems, no evaluation of
controls can provide absolute assurance that all control issues and instances of fraud, if any, have been detected. These inherent
limitations include the realities that judgments in decision-making can be faulty, and that breakdowns can occur because of a simple
error or mistake. Additionally, controls can be circumvented by the individual acts of some persons, by collusion of two or more
people, or by management override of the controls. The design of any system of controls is also based in part upon certain
assumptions about the likelihood of future events, and there can be no assurance that any design will succeed in achieving its
stated goals under all potential future conditions; over time, controls may become inadequate because of changes in conditions, or
the degree of compliance with policies or procedures may deteriorate. Due to inherent limitations in a cost-effective control
system, misstatements due to error or fraud may occur and not be detected.
32
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.