What internal controls are Kidokinetics' management responsible for designing, implementing, and maintaining regarding the preparation of financial statements?

According to Kidokinetics's 2024 Franchise Disclosure Document, management is responsible for the design, implementation, and maintenance of internal controls relevant to the preparation and fair presentation of financial statements. These controls ensure that the financial statements are free from material misstatement, whether due to fraud or error. This responsibility is in accordance with accounting principles generally accepted in the United States of America.

Kidokinetics's management must evaluate whether conditions or events, considered in the aggregate, raise substantial doubt about the company's ability to continue as a going concern within one year after the date that the financial statements are available to be issued. This evaluation is a critical component of ensuring the accuracy and reliability of the financial statements.

An independent auditor assesses these internal controls as part of their audit. While the auditor gains an understanding of internal control to design appropriate audit procedures, they do not express an opinion on the effectiveness of Kidokinetics's internal control. The auditor's objective is to obtain reasonable assurance that the financial statements are free from material misstatement, whether due to fraud or error, and to issue an auditor's report that includes their opinion.