44 ITEM 8. FINANCIAL ST A TEMENTS AND SUPPLEMENT AR Y DA T A   Page ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNT ANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE None. ITEM 9A. CONTROLS AND PROCEDURES Disclosur e Contr ols and Pr ocedur es The Company maintains disclosure controls and procedures that are designed to ensure that information required to be disclosed in the Company's reports under the Securities Exchange Act of 1934, as amended (the “Exchange Act”), is recorded, processed, summarized and reported within the time periods specified in the SEC's rules and forms, and that such information is accumulated and communicated to management, including the Company's Chief Executive Of ficer (“CEO”) and Chief Financial Of ficer (“CFO”) as appropriate to allow timely decisions regarding required disclosure. A control system, no matter how well conceived and operated, can provide only reasonable, not absolute, assurance that the objectives of the control system are met. Management, under the supervision and with the participation of our CEO and CFO, evaluated the ef fectiveness of the Company's disclosure controls and procedures (as defined in Rule 13a-15(e) and 15d-15(e) under the Exchange Act) as of the end of the period covered by this report (the “Evaluation Date”). Based on that evaluation, and as a result of management's identification of the material weaknesses described below under “Management's Annual Report on Internal Control over Financial Reporting,” the CEO and CFO concluded that the Company's disclosure controls and procedures were not ef fective as of the Evaluation Date. Notwithstanding the material weaknesses, each of the Company's CEO and CFO has concluded, based on his knowledge, that the consolidated financial statements included in this Annual Report on Form 10-K fairly present in all material respects the Company's financial condition, results of operations and cash flows of the Company as of, and for , the periods presented in this report, in conformity with accounting principles generally accepted in the United States. Management's Annual Report on Internal Contr ol over Financial Reporting Management, under the supervision of the CEO and CFO, is responsible for establishing and maintaining adequate internal control over financial reporting. Internal control over financial reporting, as defined in Rules 13a-15(f) and 15d-15(f) promulgated under the Exchange Act, is a process designed by , or under the supervision of, the CEO and CFO and is ef fected by the board of directors, management and other personnel to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external reporting purposes in accordance with generally accepted accounting principles (“GAAP”). Internal control over financial reporting includes those policies and procedures that: • Pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the Company; • Provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with GAAP , and that the receipts and expenditures of the Company are being made only in accordance with appropriate authorization of management and the board of directors; and • Provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of the Company's assets that could have a material ef fect on the financial statements. Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of ef fectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate. T able of Contents Report of Independent Registered Public Accounting Firm 57 Consolidated Statements of Operations and Comprehensive Income (Loss) for the Y ears Ended December 31, 2012, 201 1 and 20 10 58 Consolidated Balance Sheets at December 31, 2012 and 201 1 59 Consolidated Statements of Cash Flows for the Y ears Ended December 31, 2012, 201 1 and 2010 60 Consolidated Statements of Changes in T otal Equity for the Y ears Ended December 31, 2012, 201 1 and 2010 61 Notes to Consolidated Financial Statements 62