Company: KNRX
Filing Date: 2025-01-15
Form Type: F-1/A
Source: 0001493152-25-002249
Chunk: 101

Company: KNOREX LTD.
Filing Date: 2025-01-15
Form: F-1/A
Chunk 101
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 of auditing our consolidated financial statements as of and for each of the two years ended December 31, 2023 and 2022, we and our independent registered public accounting firm identified three material weaknesses in our internal control over financial reporting. As defined in the standards established by the PCAOB, a “material weakness” is a deficiency, or combination of deficiencies, in internal control over financial reporting, such that there is a reasonable possibility that a material misstatement of the annual or interim financial statements will not be prevented or detected on a timely basis.

The material weaknesses identified relates to (i) inadequate supervision over recordkeeping which resulted in misstatements of some line items in the income statement; (ii) a lack of accounting personnel adequately trained in U.S. GAAP; and (iii) lack of formal policies and procedures to establish risk assessment processes and an internal control framework.

We have taken initiatives to improve our internal control over financial reporting to address the underlying causes of these material weaknesses, including (i) hiring more qualified accounting staff and strengthening our supervision of recordkeeping; (ii) providing our relevant finance staff with appropriate training regarding requirements of U.S. GAAP and hiring additional personnel who are equipped with relevant U.S. GAAP and SEC reporting experience; and (iii) set up an internal audit function as well as engaging an external consulting firm to assist us with assessing our Sarbanes-Oxley compliance readiness and improving overall internal controls.

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However, we cannot assure you that we will complete the implementation of these measures in a timely manner. See “Risk Factors – Risks Relating to Our Business and Industry – We have identified three material weaknesses in our internal control over financial reporting as of June 30, 2024 and December 31, 2023. If we fail to implement and maintain an effective system of internal control over financial reporting, we may be unable to accurately report our results of operations, meet our reporting obligations or prevent fraud, and investor confidence and the market price of our shares may be materially and adversely affected.” In addition, our shares may not be able to remain listed on the NYSE American Market if we are unable to meet the requirements of Section 404 such as that we include a report of management on our internal control over financial reporting in our annual report on Form 20-F beginning with our annual report beginning with our second annual report on Form 20-F. In addition, once we cease to be an “emerging growth company” as such term is defined under the JOBS Act