Company: LAAI
Filing Date: 2025-05-15
Form Type: 10-Q
Source: 0001683168-25-003680
Chunk: 51

Company: Loan Artificial Intelligence Corp.
Filing Date: 2025-05-15
Form: 10-Q
Item: Part I, Item 4
Chunk 51
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a) Evaluation of Disclosure Controls and Procedures

We conducted an evaluation, under the supervision
and with the participation of our management, of the effectiveness of the design and operation of our disclosure controls and procedures.
The term “disclosure controls and procedures,” as defined in Rules 13a-15(e) and 15d-15(e) under the Securities and Exchange
Act of 1934, as amended (“Exchange Act”), means controls and other procedures of a company that are designed to ensure that
information required to be disclosed by the company in the reports it files or submits under the Exchange Act is recorded, processed,
summarized and reported, within the time periods specified in the Securities and Exchange Commission’s rules and forms. Disclosure
controls and procedures also include, without limitation, controls and procedures designed to ensure that information required to be disclosed
by a company in the reports that it files or submits under the Exchange Act is accumulated and communicated to the company’s management,
including its principal executive and principal financial officers, or persons performing similar functions, as appropriate, to allow
timely decisions regarding required disclosure. Based on that evaluation, our Chief Executive Officer and Chief Financial Officer concluded
that, as of March 31, 2025, our disclosure controls and procedures were not effective at the reasonable assurance level due primarily
to a material weakness in the segregation of duties in the Company’s internal control of financial reporting as discussed below.

Management conducted an evaluation of the design
and operation of our internal control over financial reporting as of the end of the period covered by this report, based on the criteria
in a framework developed by the Company’s management pursuant to and in compliance with the criteria established. This evaluation
included review of the documentation of controls, evaluation of the design effectiveness of controls, walkthroughs of the operating effectiveness
of controls and a conclusion on this evaluation. Based on this evaluation, management has concluded that our internal control over financial
reporting was not effective, because management identified a material weakness in the Company’s internal control over financial
reporting related to the segregation of duties as described below.

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While the Company does adhere to internal controls
and processes that were designed, it is difficult with a very limited staff to maintain appropriate segregation of duties in the initiating
and recording of transactions, thereby creating a segregation of duties weakness. Due to: (i) the significance of segregation of duties
to the preparation of reliable financial statements; (ii) the significance of potential misstatement that could have resulted due to