Seems nuts, but sections like this can be a bit "out there" occasionally since risks not covered can technically be grounds for an eventual lawsuit. I wouldn't take this as an expectation, but if you do decide to allocate $ towards them I would definitely pay attention to the notes in every 10k/10q. But you should be doing that anyway, imo.

Relatively recent guidance on that section: https://corpgov.law.harvard.edu/2020/09/11/sec-changes-rules...

I have only read a handful of these in my life, but the material weakness does sound strange, but the rest of it just sounds crazier and crazier

That probably means they are cooking the books for the pre IPO investors and don't want to go jail after public listing.