Quote: For the fiscal year ended December 31, 2014 . . .
Our management and our independent auditors have identified internal control deficiencies, which our management and our independent auditor believe constitute material weaknesses
In connection with the preparation of our financial statements for the year ended December 31, 2014, and prior years, our management and our independent auditor identified certain internal control deficiencies that, in the aggregate, represent material weaknesses, including the following. However, these weaknesses did not result in any material unadjusted differences when preparing the December 31, 2014, financial statements.
· Insufficient segregation of duties, oversight of work performed and lack of compensating controls in our finance and accounting function due to limited personnel.
· Lack of controls in place, including those surrounding related party transactions, to ensure that all material transactions and developments impacting the financial statements are reflected and properly recorded.
· Lack of documentation to support occurrences of review and approval procedures.
· Design deficiencies that do not meet stated control objectives that elevate the level of risk of a material misstatement to our financial statements.
· Policies and procedures with respect to the review, supervision and monitoring of our accounting operations throughout the organization were either not designed and in place or not operating effectively.
· We did not maintain an adequate risk oversight function to evaluate and report on risks to financial reporting throughout the organization, including completion of a comprehensive risk assessment to identify all potential risk areas and evaluate the adequacy of controls to mitigate identified risk.
· We did not maintain an effective anti-fraud program designed to detect and prevent fraud relating to (i) an effective whistle- blower program or other comparable mechanism and (ii) an ongoing program to manage identified fraud risks.
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As part of our independent auditors’ communications with our audit committee with respect to audit procedures for the year ended December 31, 2014, our independent auditors informed the audit committee that these deficiencies constituted material weaknesses, as defined by Auditing Standard No. 5, “An Audit of Internal Control Over Financial Reporting that is Integrated with an Audit of Financial Statements and Related Independence Rule and Conforming Amendments,” established by the Public Company Accounting Oversight Board, or PCAOB. Accordingly, the report of Marcum LLP on the Company’s internal control over financial reporting as of December 31, 2014, as well as management’s report as of the same date, which were included in the Annual Report, contained an adverse opinion thereon. Since 2012, we have retained a third party firm to perform our financial reporting function on a contract services basis. This third party firm specializes in technical accounting and SEC reporting services, and performs this function for many other bio-pharma companies, both small and large. This third party firm is owned and managed by individuals with significant “Big 4” accounting firm experience. In addition, we hired a “Big 4” accounting firm in early 2015 to review the significant estimates surrounding our derivative financial instruments. Management intends to take additional steps in due course to make the necessary improvements to address these deficiencies, but the timing of such steps is uncertain and the availability of funding and resources for such steps are also uncertain. Our ability to retain or attract qualified individuals to serve on our Board and to take on key management or other roles within our Company is also uncertain. Our failure to successfully complete the remediation of the existing weaknesses could lead to heightened risk for financial reporting mistakes and irregularities, and/or lead to a loss of public confidence in our internal controls that could have a negative effect on the market price of our common stock.
That is a direct link to the 10K, where the relevant section that the report refers to in the newspaper.
I posted the later version, BECAUSE it was the amended one, to include the latest version. But there is no confusion here. Those audit points were made LONG BEFORE Phase Five existed.
This same report was refiled again when the 10K/A was "amended". You don't take out the other portions, you file the report with whatever amendments were made, when you refile the 10K later. It doesn't mean it wasn't addressed. It doesn't mean that it's updated to 2015 or 2016. You need to read it in the context that it was originally filed in March 2015.
As well as the amended one refiled later. That part was not substantially amended. And again, the 10KA did not include that portion.
I do know how to read financials, and I referenced both, and took the relevant language from the original 10K, to which the relevant report should have referred.
AI
