Trump Media & Technology Group Corp. Showed “material weakness” in internal controls over financial reporting, raising risks of misstatements, the firm’s latest quarterly result showed.
The company carried out an evaluation of its disclosures and controls and found that procedures were not effective, the report said. It cited “failure to design and maintain formal accounting policies, processes, and controls to analyze, and account for complex transactions as well as a need for additional accounting personnel who have the requisite experience in SEC reporting regulation.”
The findings come after the company posted a net loss of $31.7 million for the first quarter, which it ended with cash, cash equivalents and short-term investments of $759 million.
“TMTG’s management determined that the material weakness primarily related to its failure to design and maintain formal accounting policies, processes, and controls to analyze, account for and properly disclose income recordation as well as a need for additional accounting personnel who have the requisite experience in SEC reporting regulation,” the company said in a statement.
The findings raise the risks of a “reasonable possibility that a material misstatement of an entity’s financial statements will not be prevented or detected on a timely basis,” according to the statement.
The media group said it implemented remediation measures including hiring additional accounting staff with the required background and knowledge to rectify the issues.