arcee-ai/sec-data-full · Datasets at Hugging Face

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value of our reporting units has fallen below their carrying value. This assessment is based on several factors, including industry and
market conditions, overall financial performance, including an assessment of cash flows in comparison to actual and projected results
of prior periods. If it is determined that it is more likely than not that the fair value of a reporting unit is less than its carrying
value based on our qualitative analysis, or if we elect to skip this step, we perform a Step 1 quantitative analysis to determine the
fair value of the reporting unit. At December 31, 2022 and 2021, there were no impairments of goodwill. Intangible
assets These
assets are reviewed for impairment when events or changes in circumstances indicate that the carrying amount may not be recoverable.
If impaired, intangible assets are written down to fair value based on discounted cash flows or other valuation techniques. We have no
intangibles with indefinite lives. At December 31, 2022 and 2021, there were no impairments of intangible assets. Long-Lived
Assets We
review our property and equipment and right-of-use assets for impairment whenever events or changes in circumstances indicate that the
carrying amount of an asset group may not be recoverable. The test for impairment is required to be performed by management upon triggering
events. Recoverability of assets to be held and used is measured by a comparison of the carrying amount of an asset to the future undiscounted
cash flow expected to be generated by the asset. If such assets are considered to be impaired, the impairment to be recognized is measured
by the amount by which the carrying amount of the asset exceeds the fair value of the asset. Long-lived assets to be disposed of are
reported at the lower of carrying amount or fair value less costs to sell. At December 31, 2022 and 2021, there were no impairments of
long-lived assets. Income
Taxes Income
taxes are accounted for under the asset and liability method. Under the asset and liability method, deferred tax assets and liabilities
are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing
assets and liabilities and their respective tax bases. Deferred
income tax assets and liabilities are recorded with respect to temporary differences in the accounting treatment of items for financial
reporting purposes and for income tax purposes. Where, based on the weight of available evidence, it is more likely than not that some
amount of recorded deferred tax assets will not be realized, a valuation allowance is established for the amount that, in management’s
judgment, is sufficient to reduce the deferred tax asset to an amount that is more likely than not to be realized. A tax position must
meet a minimum probability threshold before a financial statement benefit is recognized. The minimum threshold is defined as a tax position
that is more likely than not to be sustained upon examination by the applicable taxing authority, including resolution of any related
appeals or litigation processes, based on the technical merits of the position. The tax benefit to be recognized is measured as the largest
amount of benefit that is greater than fifty percent likely of being realized upon ultimate settlement. 106 ITEM
7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK. Not
applicable. ITEM
8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA. The
full text of our audited consolidated financial statements begins on page F-1 of this annual report. ITEM
9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE. None. ITEM
9A. CONTROLS AND PROCEDURES. Evaluation
of Disclosure Controls and Procedures We
maintain disclosure controls and procedures (as defined in Rule 13a-15(e) under the Exchange Act). Disclosure controls and procedures
refer to controls and other procedures designed to ensure that information required to be disclosed in the reports we file or submit
under 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 and chief financial
officer, as appropriate, to allow timely decisions regarding required disclosure. As
required by Rule 13a-15(e) of the Exchange Act, our management has carried out an evaluation, with the participation and under the supervision
of our chief executive officer and chief financial officer, of the effectiveness of the design and operation of our disclosure controls
and procedures, as of December 31, 2022. Based upon, and as of the date of this evaluation, our chief executive officer and chief financial
officer determined that, because of the material weaknesses described below, our disclosure controls and procedures were not effective. Management’s
Annual Report on Internal Control over Financial Reporting Our
management is responsible for establishing and maintaining adequate internal control over financial reporting for our company. Internal
control over financial reporting refers to the process designed by, or under the supervision of, our principal executive officer and
principal financial and accounting officer, and effected by our board of directors, management and other personnel, to provide reasonable
assurance regarding the reliability of our financial reporting and the preparation of financial statements for external purposes in accordance
with GAAP, and includes those policies and procedures tha (1) pertain
to the maintenance of records that in reasonable detail accurately and fairly reflect the
transactions and dispositions of our assets; (2) provide
reasonable assurance that transactions are recorded as necessary to permit preparation of
financial statements in accordance with GAAP, and that our receipts and expenditures are
being made only in accordance with the authorization of our management and directors; and (3) provide
reasonable assurance regarding prevention or timely detection of unauthorized acquisition,
use or disposition of our assets that could have a material effect on the financial statements. Our
management evaluated the effectiveness of our internal control over financial reporting as of December 31, 2022. In making this evaluation,
management used the framework established in Internal Control - Integrated Framework issued by the Committee of Sponsoring Organizations
of the Treadway Commission, or COSO. The COSO framework summarizes each of the components of a company’s internal control system,
including (i) the control environment, (ii) risk assessment, (iii) control activities, (iv) information and communication, and (v) monitoring.
Based on our evaluation, we determined that, as of December 31, 2022, our internal control over financial reporting was not effective
due to the following material weaknesses. ● We
did not have appropriate policies and procedures in place to evaluate the proper accounting
and disclosures of key documents and agreements. ● We
do not have adequate segregation of duties with our limited accounting personnel and rely
upon outsourced accounting services. 107 ● We
do not have sufficient and skilled accounting personnel with an appropriate level of technical
accounting knowledge and experience in the application of GAAP commensurate with our financial
reporting requirements. In
order to cure the foregoing material weakness, we have taken or plan to take the following remediation measu ● We
plan to make necessary changes by providing training to our financial team and our other
relevant personnel on the GAAP accounting guidelines applicable to financial reporting requirements. ● In
the first quarter of 2022, we engaged a financial reporting consultant to provide outsourced
accounting and financial reporting services. ● In
the first quarter of 2022, we also put in place new policies and procedures at the subsidiary
level to standardize accounting procedures across all business units. We also plan to hire
additional skilled accounting personnel at the subsidiary companies to implement the policies
and procedures. ● In
the third quarter of 2022, we hired a corporate controller. We
intend to complete the remediation of the material weaknesses discussed above as soon as practicable but we can give no assurance that
we will be able to do so. Designing and implementing an effective disclosure controls and procedures is a continuous effort that requires
us to anticipate and react to changes in our business and the economic and regulatory environments and to devote significant resources
to maintain a financial reporting system that adequately satisfies our reporting obligations. The remedial measures that we have taken
and intend to take may not fully address the material weaknesses that we have identified, and material weaknesses in our disclosure controls
and procedures may be identified in the future. Should we discover such conditions, we intend to remediate them as soon as practicable.
We are committed to taking appropriate steps for remediation, as needed. All
internal control systems, no matter how well designed, have inherent limitations. Therefore, even those systems determined to be effective
can provide only reasonable assurance with respect to financial statement preparation and presentation. Also, projections of any evaluation
of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that
the degree of compliance with the policies or procedures may deteriorate. Changes
in Internal Controls 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. Except
for the matters described above, there have been no changes in our internal control over financial reporting during the fourth quarter
of fiscal year 2022 that have materially affected, or are reasonably likely to materially affect, our internal control over financial
reporting. ITEM
9B. OTHER INFORMATION. None. ITEM

value of our reporting units has fallen below their carrying value. This assessment is based on several factors, including industry and

market conditions, overall financial performance, including an assessment of cash flows in comparison to actual and projected results

of prior periods. If it is determined that it is more likely than not that the fair value of a reporting unit is less than its carrying

value based on our qualitative analysis, or if we elect to skip this step, we perform a Step 1 quantitative analysis to determine the

fair value of the reporting unit. At December 31, 2022 and 2021, there were no impairments of goodwill. Intangible

assets These

assets are reviewed for impairment when events or changes in circumstances indicate that the carrying amount may not be recoverable.

If impaired, intangible assets are written down to fair value based on discounted cash flows or other valuation techniques. We have no

intangibles with indefinite lives. At December 31, 2022 and 2021, there were no impairments of intangible assets. Long-Lived

Assets We

review our property and equipment and right-of-use assets for impairment whenever events or changes in circumstances indicate that the

carrying amount of an asset group may not be recoverable. The test for impairment is required to be performed by management upon triggering

events. Recoverability of assets to be held and used is measured by a comparison of the carrying amount of an asset to the future undiscounted

cash flow expected to be generated by the asset. If such assets are considered to be impaired, the impairment to be recognized is measured

by the amount by which the carrying amount of the asset exceeds the fair value of the asset. Long-lived assets to be disposed of are

reported at the lower of carrying amount or fair value less costs to sell. At December 31, 2022 and 2021, there were no impairments of

long-lived assets. Income

Taxes Income

taxes are accounted for under the asset and liability method. Under the asset and liability method, deferred tax assets and liabilities

are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing

assets and liabilities and their respective tax bases. Deferred

income tax assets and liabilities are recorded with respect to temporary differences in the accounting treatment of items for financial

reporting purposes and for income tax purposes. Where, based on the weight of available evidence, it is more likely than not that some

amount of recorded deferred tax assets will not be realized, a valuation allowance is established for the amount that, in management’s

judgment, is sufficient to reduce the deferred tax asset to an amount that is more likely than not to be realized. A tax position must

meet a minimum probability threshold before a financial statement benefit is recognized. The minimum threshold is defined as a tax position

that is more likely than not to be sustained upon examination by the applicable taxing authority, including resolution of any related

appeals or litigation processes, based on the technical merits of the position. The tax benefit to be recognized is measured as the largest

amount of benefit that is greater than fifty percent likely of being realized upon ultimate settlement. 106 ITEM

7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK. Not

applicable. ITEM

8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA. The

full text of our audited consolidated financial statements begins on page F-1 of this annual report. ITEM

9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE. None. ITEM

9A. CONTROLS AND PROCEDURES. Evaluation

of Disclosure Controls and Procedures We

maintain disclosure controls and procedures (as defined in Rule 13a-15(e) under the Exchange Act). Disclosure controls and procedures

refer to controls and other procedures designed to ensure that information required to be disclosed in the reports we file or submit

under 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 and chief financial

officer, as appropriate, to allow timely decisions regarding required disclosure. As

required by Rule 13a-15(e) of the Exchange Act, our management has carried out an evaluation, with the participation and under the supervision

of our chief executive officer and chief financial officer, of the effectiveness of the design and operation of our disclosure controls

and procedures, as of December 31, 2022. Based upon, and as of the date of this evaluation, our chief executive officer and chief financial

officer determined that, because of the material weaknesses described below, our disclosure controls and procedures were not effective. Management’s

Annual Report on Internal Control over Financial Reporting Our

management is responsible for establishing and maintaining adequate internal control over financial reporting for our company. Internal

control over financial reporting refers to the process designed by, or under the supervision of, our principal executive officer and

principal financial and accounting officer, and effected by our board of directors, management and other personnel, to provide reasonable

assurance regarding the reliability of our financial reporting and the preparation of financial statements for external purposes in accordance

with GAAP, and includes those policies and procedures tha (1) pertain

to the maintenance of records that in reasonable detail accurately and fairly reflect the

transactions and dispositions of our assets; (2) provide

reasonable assurance that transactions are recorded as necessary to permit preparation of

financial statements in accordance with GAAP, and that our receipts and expenditures are

being made only in accordance with the authorization of our management and directors; and (3) provide

reasonable assurance regarding prevention or timely detection of unauthorized acquisition,

use or disposition of our assets that could have a material effect on the financial statements. Our

management evaluated the effectiveness of our internal control over financial reporting as of December 31, 2022. In making this evaluation,

management used the framework established in Internal Control - Integrated Framework issued by the Committee of Sponsoring Organizations

of the Treadway Commission, or COSO. The COSO framework summarizes each of the components of a company’s internal control system,

including (i) the control environment, (ii) risk assessment, (iii) control activities, (iv) information and communication, and (v) monitoring.

Based on our evaluation, we determined that, as of December 31, 2022, our internal control over financial reporting was not effective

due to the following material weaknesses. ● We

did not have appropriate policies and procedures in place to evaluate the proper accounting

and disclosures of key documents and agreements. ● We

do not have adequate segregation of duties with our limited accounting personnel and rely

upon outsourced accounting services. 107 ● We

do not have sufficient and skilled accounting personnel with an appropriate level of technical

accounting knowledge and experience in the application of GAAP commensurate with our financial

reporting requirements. In

order to cure the foregoing material weakness, we have taken or plan to take the following remediation measu ● We

plan to make necessary changes by providing training to our financial team and our other

relevant personnel on the GAAP accounting guidelines applicable to financial reporting requirements. ● In

the first quarter of 2022, we engaged a financial reporting consultant to provide outsourced

accounting and financial reporting services. ● In

the first quarter of 2022, we also put in place new policies and procedures at the subsidiary

level to standardize accounting procedures across all business units. We also plan to hire

additional skilled accounting personnel at the subsidiary companies to implement the policies

and procedures. ● In

the third quarter of 2022, we hired a corporate controller. We

intend to complete the remediation of the material weaknesses discussed above as soon as practicable but we can give no assurance that

we will be able to do so. Designing and implementing an effective disclosure controls and procedures is a continuous effort that requires

us to anticipate and react to changes in our business and the economic and regulatory environments and to devote significant resources

to maintain a financial reporting system that adequately satisfies our reporting obligations. The remedial measures that we have taken

and intend to take may not fully address the material weaknesses that we have identified, and material weaknesses in our disclosure controls

and procedures may be identified in the future. Should we discover such conditions, we intend to remediate them as soon as practicable.

We are committed to taking appropriate steps for remediation, as needed. All

internal control systems, no matter how well designed, have inherent limitations. Therefore, even those systems determined to be effective

can provide only reasonable assurance with respect to financial statement preparation and presentation. Also, projections of any evaluation

of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that

the degree of compliance with the policies or procedures may deteriorate. Changes

in Internal Controls 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. Except

for the matters described above, there have been no changes in our internal control over financial reporting during the fourth quarter

of fiscal year 2022 that have materially affected, or are reasonably likely to materially affect, our internal control over financial

reporting. ITEM

9B. OTHER INFORMATION. None. ITEM