ENCISION INC 10-K

Item 9A . Controls and Procedures. Management’s Evaluation of Disclosures Controls and Procedures We carried out an evaluation under the supervision and with the participation of our management, including our Chief Executive Officer and Principal Financial and Accounting Officer, of the effectiveness of our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) of the Securities Exchange Act of 1934 (the "Exchange Act")) as of the end of the period covered by this report. Based upon that evaluation, the Chief Executive Officer and the Principal Accounting Officer concluded that our disclosure controls and procedures were not effective as of March 31, 2022. Management’s Annual Report on Internal Control Over Financial Reporting Our management is responsible for establishing and maintaining adequate internal control over financial reporting, as defined in Rules 13a-15(f) and 15d-15(f) of the Exchange Act. Our internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. Our internal control over financial reporting includes those policies and procedures that (i) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of our assets; (ii) provide reasonable assurance that transactions are recorded to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the Company are made only in accordance with authorizations of our management and directors; and (iii) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of our assets that could have a material effect on our financial statements. Management assessed the effectiveness of our internal control over financial reporting as of March 31, 2022. In making this assessment, management used the criteria set forth in Internal Control-Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO) in 2013. Based upon our evaluation of internal controls, our CEO and PFAO determined that (i) we have a material weakness over our entity level control environment as of March 31, 2022 and (ii) our internal control over financial reporting was not effective as of March 31, 2022. Our preventive and review controls failed to detect errors related to the valuation of inventory and cutoff of service revenue. Remediation Activities 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 in fiscal 2023 and 2024 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. The process of implementing an effective financial reporting system is a continuous effort that requires us to anticipate and react to changes in our business and the economic and regulatory environments and to expend significant resources to maintain a financial reporting system that is adequate to satisfy our reporting obligations. As we continue to evaluate and take actions to improve our internal control over financial reporting, we may take additional actions to address control deficiencies or modify certain of the remediation measures described above. 41 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. This Annual Report does not include an attestation report of the Company’s registered public accounting firm regarding internal control over financial reporting. Management’s report was not subject to attestation by the Company’s registered public accounting firm pursuant to temporary rules of the Securities and Exchange Commission that permit the Company to provide only management’s report in this Annual Report. 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 twelve months ended March 31, 2022 that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting. Item 9 B . Other Information None. 42 PART III Item 10 . Directors, Executive Officers and Corporate Governance. Information in response to this item is incorporated by reference from the registrant's definitive proxy statement for its 2021 Annual Meeting of Shareholders to be filed within 120 days after March 31, 2022. Item 11 . Executive Compensation . Information in response to this item is incorporated by reference from the registrant's definitive proxy statement for its 2021 Annual Meeting of Shareholders to be filed within 120 days after March 31, 2022. Item 12 . Security Ownership of Certain Beneficial Owners and Management and Related Shareholder Matters . Information in response to this item is incorporated by reference from the registrant's definitive proxy statement for its 2021 Annual Meeting of Shareholders to be filed within 120 days after March 31, 2022. The following table summarizes certain information regarding our equity compensation plan as of March 31, 2022: Plan Category Number of securities to be issued upon exercise of outstanding equity units Weighted-average exercise price of equity units Number of securities remaining available for future issuance under equity units plan Equity compensation plans approved by security holders 1,061,000 $0.65 39,000 Item 13 . Certain Relationships and Related Transactions, and Director Independence . Information in response to this item is incorporated by reference from the registrant's definitive proxy statement for its 2022 Annual Meeting of Shareholders to be filed within 120 days after March 31, 2022. Item 14 . Principal Accounting Fees and Services. Information in response to this item is incorporated by reference from the registrant's definitive proxy statement for its 2022 Annual Meeting of Shareholders to be filed within 120 days after March 31, 2022. PART IV Item 15 . Exhibits, Financial Statement Schedules . (b) Exhibits - The following exhibits are attached to this report on Form 10-K or are incorporated herein 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 3.1 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 Lease Agreement dated June 3, 2004 between Encision Inc. and DaPuzzo Investment Group, LLC (Incorporated by reference from Quarterly Report on Form 10-Q filed on August 12, 2004). 43 10.2 Encision Inc. 2007 Stock Option Plan (Incorporated by reference from Proxy Statement dated June 30, 2007). † 10.3 Encision Inc. First Amended and Restated 2014 Stock Option Plan (Incorporated by reference from Proxy Statement dated July 6, 2020). † 10.4 Employment Agreement, dated December 17, 2013, between Encision Inc. and Gregory J. Trudel (Incorporated by reference from Current Report on Form 8-K filed on December 23, 2013). † 10.5 Employment Agreement, dated November 14, 2016, between Encision Inc. and Gregory J. Trudel (Incorporated by reference to Exhibit 10-1 to our Current Report on Form 8-K filed on November 18, 2016). † 10.6 Fifth Amendment to Office Building Lease dated November 9, 2017 (Incorporated by reference to Exhibit 10.1 to Quarterly Report on Form 10-Q filed February 12, 2018). 10.7 PPP Promissory Note dated as of April 17, 2020 (incorporated by reference to Exhibit 10.1 to our Current Report on Form 8-K filed on April 23, 2020). 10.8 Economic Injury Disaster Loan dated as of August 1, 2020 (incorporated by reference to Exhibit 10.1 to our Quarterly Report on Form 10-Q filed on August 14, 2020). 10.9 US Bank Equipment Finance Note dated January 21, 2021 (incorporated by reference to Exhibit 4.3 to our Annual Report on Form 10-K filed on June 23, 2021) 10.10 PPP Promissory Note dated as of February 8, 2021 (incorporated by reference to Exhibit 10.1 to our Quarterly Report on Form 10-Q filed on February 12, 2021). 10.11 Supply Agreement dated August 23, 2021 between Auris Health, Inc. and Encision Inc. (incorporated by reference to Exhibit 10.1 to our Quarterly Report on Form 10-Q filed on November 15, 2021).+ 23.1 Consent of Independent Registered Public Accounting Firm, Gries and Associates. ** 23.2 Consent of Independent Registered Public Accounting Firm, Edie Bailly CPA. ** 31.1 Section 302 Certification of Principal Executive Officer ** 31.2 Section 302 Certification of Principal Financial and Accounting Officer ** 32.1 Section 906 Certifications ** 101 Inline interactive data files pursuant to Rule 405 of Regulation S-T: (i) the Balance Sheets, (ii) the Statements of Operations, (iii) Statements of Stockholders Equity, (iv) Statements of Cash Flows and (v) the Notes to the Consolidated Financial Statements ** 104 Cover Page Interactive Data File (formatted in Inline XBRL and contained in Exhibit 101).** † Denotes management contract or compensatory plan or arrangement. ** Filed herewith. Item 16 . Form 10-K Summary. None. 44 SIGNATURES Pursuant to the requirements of Section 13 or 15(d) of the Exchange Act, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized. Dated: July 13, 2022 ENCISION INC. By: /s/ Mala Ray Mala Ray Controller Principal Accounting Officer & Principal Financial Officer Pursuant to the requirements of the Exchange Act, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated. Signature Date /s/ Mala Ray July 13, 2022 Mala Ray Controller Principal Accounting Officer & Principal Financial Officer /s/ Patrick W. Pace July 13, 2022 Patrick W. Pace Director /s/ Robert H. Fries July 13, 2022 Robert H. Fries Director /s/ Vern D. Kornelsen July 13, 2022 Vern D. Kornelsen Director /s/ Gregory J. Trudel July 13, 2022 Gregory J. Trudel President and CEO Principal Executive Officer Director /s/ David W. Newton July 13, 2022 David W. Newton Vice President - Technology Director