Evaluation of Disclosure Controls and Procedures
Management, with the participation of our Chief Executive Officer and Chief Financial Officer, evaluated the effectiveness of our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934) as of September 30, 2026.
Based on this evaluation, our Chief Executive Officer and Chief Financial Officer concluded that our disclosure controls and procedures were not effective as of September 30, 2026. This conclusion is due to the material weaknesses in our internal control over financial reporting that were previously disclosed in our Annual Report on Form 10-K for the year ended December 31, 2025, which have not yet been fully remediated.
Changes in Internal Control over Financial Reporting
As disclosed in Item 9A of our Annual Report on Form 10-K for the year ended December 31, 2025, management identified the following material weaknesses in our internal control over financial reporting:
| • | Related party transactions; |
| • | Financial statement disclosures; |
| • | Completeness and accuracy of information produced by the entity; |
| • | Information technology general controls; and |
| • | The control activities component of internal control. |
Management is committed to the remediation of these material weaknesses. During the quarter ended September 30, 2026, we continued to implement our remediation plan, and these ongoing efforts represent a change in our internal control over financial reporting. Specific remediation activities undertaken during the quarter include:
| • | Continued engagement of third-party consultants to assist in the implementation of our remediation plan and control testing. |
| • | Began management’s testing of the operating effectiveness of the redesigned controls over deposit operations, account reconciliations, related party transactions and the financial statement disclosure process. |
| • | Completed the implementation of enhancements to our information technology general controls, including processes related to access management and change management. |
| • | Performed user access reviews over key financial systems, including the core banking system, and refined user roles and system permissions to enforce appropriate segregation of duties within the accounting and finance functions. |
| • | Enhanced procedures to validate the completeness and accuracy of key reports and spreadsheets used in the operation of controls, including adding reconciliations and automated tie-out checks to key financial reporting schedules. |
| • | Continued to formalize documentation of control activities across the processes noted above, including defined control owners, frequency, and evidence of review, to address the control activities component of internal control. |
| • | Developed a plan to complete management’s testing of the operating effectiveness of the remediated controls, which we expect to complete in the fourth quarter of 2026, with the objective of concluding on the remediation of the material weaknesses as of December 31, 2026. |
The material weaknesses will not be considered fully remediated until the applicable controls operate for a sufficient period of time and management has concluded, through testing, that the controls are operating effectively. Other than these ongoing remediation efforts, there were no other changes in our internal control over financial reporting during the quarter ended September 30, 2026, that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.
PART II
