Company: NTCL
Filing Date: 2025-02-18
Form Type: 20-F
Source: 0001410578-25-000153
Chunk: 74

Company: NetClass Technology Inc
Filing Date: 2025-02-18
Form: 20-F
Item: Item 5
Chunk 74
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 may result in severe criminal or civil sanctions. We may be subject to other liabilities, which could negatively affect our business, operating results, and financial condition. In addition, the government may seek to hold our Company liable for successor liability FCPA violations committed by companies in which we invest or that we acquire.

We have identified material weaknesses in our internal control over financial reporting. If we fail to develop and maintain an effective system of internal control over financial reporting, we may be unable to accurately report our financial results or prevent fraud.

In connection with reviews of our interim financial statements for the six months ended March 31, 2024 and 2023 as well as the audits of our CFS for the years ended September 30, 2023 and 2022, our management identified below material weaknesses in the design and operation of our internal controls:

  The Company lacked the key monitoring mechanisms such as an internal control department to oversee and monitor the Company’s risk management, business strategies and financial reporting procedu...  

  The Company lacked sufficient resources and expertise with U. S GAAP and the SEC reporting experiences in the accounting department to provide accurate information in a timely manner; and  

  The Company lacked sufficient controls designed and implemented in IT environment and IT general control activities, mainly associated with areas of access logical security, system change manag...  

As defined under standards established by the PCAOB, a material weakness is a deficiency, or a combination of deficiencies, in internal control over financial reporting, such that there is a reasonable possibility that a material misstatement of the Company’s annual or interim CFS will not be prevented or detected on a timely basis.

In addition, in order to address the material weaknesses in internal control over financial reporting of the Company, we have: (a) hired an outside consultant with adequate experience with U. S GAAP and the SEC reporting and compliance requirements; (b) continued our efforts to provide ongoing training courses in U. S GAAP to existing personnel, including our Chief Financial Officer; (c) continued our efforts to setup the internal audit department, and enhance the effectiveness of the internal control system; (d) continued our efforts to implement necessary review and controls at related levels and the submission of all important documents and contracts to the office of our Chief Executive Officer for retention; and (e) continued our efforts to strengthen the supervision and controls on the IT functions, including the enhancement of IT security policies and procedures setup, logical security, data backup and cyber security training.

Table of Contents

All internal control