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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 21549

 

Form 10-Q/A

 (Amendment No. 2)

 

  QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended December 31, 2021

OR

  TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from __________ to________

 

Commission file number: 001-11789

 

ENCISION INC.

(Exact name of registrant as specified in its charter)

 

Colorado 84-1162056

 (State or other jurisdiction of

incorporation or organization)

(I.R.S. Employer Identification No.)

 

6797 Winchester Circle

Boulder, Colorado 80301

(Address of principal executive offices)

 

(303) 444-2600

(Registrant’s telephone number)

 

Securities registered pursuant to Section 12(b) of the Securities Exchange Act of 1934:

 

Title of each class Trading Symbol(s) Name of each exchange on which registered
Common Stock, no par value ECIA OTC Bulletin Board

 

Securities registered under Section 12(g) of the Act: None

 

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.

Yes     No

 

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes     No

 

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.

 

Large accelerated filer     Accelerated filer  
Non-accelerated Filer     Smaller reporting company  
    Emerging growth company  

 

If an emerging growth company, indicate by check mark if the registrant has elected to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.

 

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes    No 

 

Indicate the number of shares outstanding of each of the issuer’s classes of common equity, as of the latest practicable date:

 

Title of each class Trading Symbol(s) Name of each exchange on which registered
Common Stock, no par value ECIA OTC Bulletin Board

 

Securities registered under Section 12(g) of the Act: None

 

Indicate the number of shares outstanding of each of the issuer’s classes of common equity, as of the latest practicable date:

 

Common Stock, no par value 11,719,543 Shares
(Class)  (outstanding at January 31, 2022)

 

 

 

 
 
 

 

Explanatory Note:

 

We are filing this Amendment No. 2 on Form 10-Q/A (“Amendment No. 2”) to our Quarterly Report on Form 10-Q filed with the Securities and Exchange Commission (“SEC”) on February 14, 2022 (“Original Form 10-Q) to revise Item 4 and Item 6. This Amendment No. 2 does not reflect events occurring after the filing of the Original Form 10-Q on February 14, 2022 and no attempt has been made is this Amendment No. 2 to modify or update other disclosures as presented in the Original Form 10-Q. Accordingly, this Amendment No. 2 should be read in conjunction with the Original Form 10-Q and our filings with the SEC subsequent to the filing of the Original Form 10-Q.

 

 
 
 

 

ITEM 4 -  Controls and procedures

 

Management’s Evaluation of Disclosures Controls and Procedures

 

Our management, comprised of our Chief Executive Officer (CEO) and Principal Financial and Accounting Officer (PFAO) evaluated the effectiveness of our disclosure controls and procedures as of December 31, 2021. The term “disclosure controls and procedures,” as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act, means controls and other procedures of a company that are designed to ensure that information required to be disclosed by a company in the reports that it files or submits under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms. Based on that evaluation, and taking the matters described below into account, the Company’s CEO and PFAO have concluded that our disclosure controls and procedures over financial reporting were not effective during reporting period ended December 31, 2021.

 

Remediation Activities Regarding Material Weakness

 

As disclosed in our Annual Report on Form 10-K for the March 31, 2021 fiscal year, management determined that (i) we had a material weakness over our entity level control environment as of March 31, 2021 and (ii) our internal control over financial reporting was not effective as of March 31, 2021. Our preventive and review controls failed to detect errors related to the valuation of inventory and cutoff of service revenue.

 

Management has been actively engaged in remediating the above described material weaknesses. The following remedial actions have been taken:

 

  • We have made changes in our policy regarding how contract revenue and related costs are booked. Under the revised policy, such revenue and costs are now booked in the same month as the related work is performed.

 

  • We have changed our policy regarding reserves for slow moving inventory. Under our revised, policy we now book additional inventory reserves for all inventory older than 18 months, even if management believes such inventory is still salable.

 

The Company will design and implement additional procedures during fiscal 2022 and fiscal 2023 in order to assure that audit/accounting personnel are more involved with the Company’s inventory activities and service revenue to monitor and earlier identify accounting issues that may be raised by the Company’s ongoing activities.

 

While progress has been made to enhance our internal control over financial reporting, we are still in the process of implementing these processes, procedures and controls. Additional time is required to complete implementation and to assess and ensure the sustainability of these procedures. We believe the above actions will be effective in remediating the material weaknesses described above and we will continue to devote significant time and attention to these remedial efforts. However, the material weaknesses cannot be considered remediated until the applicable remedial controls operate for a sufficient period of time and management has concluded that these controls are operating effectively.

 

Changes In Internal Control Over Financial Reporting

 

Other than the applicable remediation efforts described above, there were no significant changes in our internal control over financial reporting during the quarter ended December 31, 2021 that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

 

 

 

 
 
 

 

 

 

Item 6. Exhibits

 

The following exhibits are filed with this report on Form 10-Q or are incorporated by reference:

3.1 Articles of Incorporation of the Company, as amended. (Incorporated by reference from Registration Statement #333-4118-D dated June 25, 1996).
3.2 Bylaws of the Company. (Incorporated by reference from Current Report on Form 8-K filed on October 30, 2007).
3.3 First Amended and Restated Bylaws (incorporated by reference to Exhibit 3.2 to our Current Report on Form 8-K filed on May 31, 2017).
4.1 Form of certificate for shares of Common Stock. (Incorporated by reference from Registration Statement #333-4118-D dated June 25, 1996).
4.2 Description of Capital Stock. (Incorporated by reference from Annual Report on Form 10-K filed on June 14, 2019)
10.1 + Supply Agreement dated August 23, 2021 between Auris Health, Inc. and Encision Inc. (Incorporated by reference from the Form 10-Q filed on November 15, 2021)
31.1 Certification of President and CEO under Rule 13a-14(a) of the Exchange Act (filed herewith).
31.2 Certification of Principal Financial and Accounting Officer under Rule 13a-14(a) of the Exchange Act (filed herewith).
32.1 Certifications of President and CEO and Principal Financial and Accounting Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (filed herewith).
101 The following materials from Encision Inc.’s Quarterly Report on Form 10-Q for the quarter ended December 31, 2021, formatted in iXBRL (Extensible Business Reporting Language): (i) the unaudited Condensed Balance Sheets, (ii) the unaudited Condensed Statements of Income, (iii) the unaudited Condensed Statements of Cash Flows, and (iv) Notes to Condensed Financial Statements, tagged at Level I.

  

+   Certain portions of the exhibit have been omitted pursuant to Rule 601(b)(10) of Regulation S-K. The omitted information is (i) not material and (ii) would likely cause competitive harm to the Company if publicly disclosed.

 

 

 
 
 

 

 

SIGNATURE

 

 

 

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

 

 

  Encision Inc.
   
   
April 22, 2022  By: /s/ Mala Ray
Date   Mala Ray

Controller

Principal Accounting Officer &

Principal Financial Officer

 

 

 

 
 
 

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