Company: SNBH
Filing Date: 2025-04-16
Form Type: 10-K
Source: 0001731122-25-000581
Chunk: 37

Company: SENTIENT BRANDS HOLDINGS INC.
Filing Date: 2025-04-16
Form: 10-K
Item: Item 1
Chunk 37
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es are due to the small size of the Company’s accounting staff and reliance on outside consultants for external reporting.
The small size of the Company’s accounting staff may prevent adequate controls in the future, such as segregation of duties, due
to the cost/benefit of such remediation.

To mitigate the current limited resources and limited
employees, we rely heavily on direct management oversight of transactions, along with the use of legal and outside accounting consultants.
As we grow, we expect to increase our number of employees, which will enable us to implement adequate segregation of duties within the
internal control framework.

27

These control deficiencies could result in a misstatement
of account balances that would result in a reasonable possibility that a material misstatement to our consolidated financial statements
may not be prevented or detected on a timely basis. Accordingly, we have determined that these control deficiencies as described above
together constitute a material weakness.

In light of this material weakness, we performed additional
analyses and procedures in order to conclude that our consolidated financial statements for the year ended December 31, 2024 included
in this Annual Report on Form 10-K were fairly stated in accordance with US GAAP. Accordingly, management believes that despite our material
weaknesses, our consolidated financial statements for the year ended December 31, 2024 are fairly stated, in all material respects, in
accordance with US GAAP.

This annual report does not include an attestation
report of our independent registered public accounting firm regarding internal control over financial reporting. Management’s report
was not subject to attestation by our independent registered public accounting firm pursuant to rules of the Securities and Exchange Commission
that permit us to provide only management’s report in this Annual Report on Form 10-K.

Limitations on Effectiveness of Controls and Procedures

Our management, including our Chief Executive Officer
and Chief Financial Officer (principal financial officer), does not expect that our disclosure controls and procedures or our internal
controls will prevent all errors and all fraud. A control system, no matter how well conceived and operated, can provide only reasonable,
not absolute, assurance that the objectives of the control system are met. Further, the design of a control system must reflect the fact
that there are resource constraints, and the benefits of controls must be considered relative to their costs. Because of the inherent
limitations in all control systems, no evaluation of controls can provide absolute assurance that all control issues and instances of
fraud, if any, within the Company have been detected. These inherent