Trump Media & Technology Group Corp. showed “material weakness” in internal financial reporting controls, which increases the risks of misconceptions, showing the latest quarterly results of the company.
The company conducted a review of its disclosure and control and found that the procedures were ineffective, the report said. It noted the “failure to design and maintain formal policies, processes, and controls to study, and account for complex transactions as well as the need for additional accounting personnel with the required SEC reporting regulation experience.”
The findings arrived after the company posted a net loss of $ 31.7 million for the first quarter, ending it in cash, equivalent to cash and short-term investments of $ 759 million.
“The TMTG management has determined that material weakness is primarily associated with its failure to design and maintain formal accounting policies, processes, and controls to study, account and properly disclose revenue recording as well as the need for additional accounting personnel with the necessary experience of reporting SEC regulation,” the company said in a statement.
The findings increase the risks of a “rational likelihood that a creature's financial misconception of financial statements is inevitable or noticed on a timely basis,” according to the statement.
The media team said it implemented remediation measures including renting additional accounting staff with the required background and knowledge to correct issues.
This story was originally featured on Fortune.com
