Company: KNRX
Filing Date: 2025-09-30
Form Type: 424B4
Source: 0001493152-25-016175
Chunk: 38

Company: KNOREX LTD.
Filing Date: 2025-09-30
Form: 424B4
Chunk 38
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 meet our reporting obligations or prevent fraud, and investor confidence and the market price of our shares may be materially and adversely affected.

Prior to this offering, we were a private company with limited accounting personnel and other resources with which to address our internal control over financial reporting. Our management has not completed an assessment of the effectiveness of our internal control over financial reporting and our independent registered public accounting firm has not conducted an audit of our internal control over financial reporting. In the course of auditing our consolidated financial statements as of and for each of the two years ended December 31, 2024 and 2023, we and our independent registered public accounting firm identified four 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) control limitation associated with the verification of impression data from third-party platforms, which these platforms do not provide independent assurance reports, such as SOC audits, and industry-wide, there is limited ability to verify such data independently. This reliance presents challenges in ensuring full transparency and control over certain service records, resulting in the inability to independently verify the accuracy of service records for revenue recognition; (ii) the lack of effective formal policies and procedures to establish risk assessment processes and ensure consistent control application in accordance with the COSO Framework; (iii) inadequate supervision and review over recordkeeping, leading to misstatements of some items in the income and balance sheet statements; and (iv) a lack of accounting personnel adequately trained in U.S. GAAP and SEC reporting.

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; (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; and
(vi) appointed our board members with the relevant experiences to govern and
oversee the audit and finance functions.

However, we cannot assure you that we will complete the