UNITED
STATES
Securities
and Exchange Commission
Washington,
D.C. 20549
Form 10-Q/A
þ
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QUARTERLY
REPORT PURUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF
1934
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For
the quarterly period ended June 30, 2009
o
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TRANSITION
REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF
1934
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For
the transition period from
to
Commission
file number: 333-91436
ECOLOGY
COATINGS, INC.
(Exact
Name of Registrant as Specified in Its Charter)
Nevada
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26-0014658
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|
(State
or other jurisdiction of incorporation or organization)
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(I.R.S.
Employer Identification No.)
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2701
Cambridge Court, Suite 100, Auburn Hills, MI 48326
(Address
of principal executive offices) (Zip Code)
(248) 370-9900
(Registrant’s
telephone number)
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 x No o
Indicate
by check mark whether the registrant has submitted electronically and posted on
its corporate Web site, if any, every Interactive Date File required to be
submitted and posted 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 and post such files).
Yes o
No x
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
definitions of “large accelerated filer,” “accelerated filer” and “smaller
reporting company” in Rule 12b-2 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 o No x
APPLICABLE
ONLY TO CORPORATE ISSUERS:
Indicate
the number of shares outstanding of each of the issuer’s classes of common
stock, as of the latest practicable date. The number of shares of common stock
of the issuer outstanding as of August 17, 2009 was 32,233,600.
1
EXPLANATORY
NOTE
In
connection with our quarterly report on Form 10-Q for the three
months ended June 30, 2009, we are filing this Amendment
No. 2 to include the following information:
1. We have amended Item 3A of Amendment No. 1 of our quarterly report
on Form 10-Q for the three months ended June 30, 2009 to correct a typographical
error in 5th paragraph of Item 3A to change the word "effective" to
"ineffective."
With the
exception of the foregoing changes, no other information in the report on Form
10-Q for the three months ended June 30, 2009 has been supplemented,
updated or amended.
2
ITEM 3A. CONTROLS AND PROCEDURES
Under the supervision and with the participation of our management,
including our Chief Executive Officer and Chief Financial Officer, we have
evaluated the effectiveness of the design and operation of our “disclosure
controls and procedures,” as such term is defined in Rules 13a-15e promulgated
under the Exchange Act as of this report. Based upon that evaluation, the Chief
Executive Officer and Chief Financial Officer have concluded that our disclosure
controls and procedures were ineffective as of the end of the period covered by
this report to provide reasonable assurance that material information required
to be disclosed by the Company in reports that it files or submits under the
Exchange Act is recorded, processed, summarized and reported within the time
periods specified in SEC rules and forms.
Management is aware that there is a lack of segregation of certain duties at the
Company due to the small number of employees with responsibility for general
administrative and financial matters. This constitutes a deficiency in financial
reporting. However, at this time, management has decided that considering the
employees involved and the control procedures in place, the risks associated
with such lack of segregation of duties are insignificant and the potential
benefits of adding additional employees to clearly segregate duties do not
justify the additional expenses associated with such increases. Management will
periodically reevaluate this situation. If the volume of business increases and
sufficient capital is secured, it is the Company’s intention to further increase
staffing to mitigate the current lack of segregation of duties within the
general, administrative and financial functions.
Management’s
Report on Internal Control over Financial Reporting
Management
assessed our internal control over financial reporting as of June30, 2009.
Management based its assessment on criteria established in Internal Control –
Integrated Framework issued by the Committee of Sponsoring Organizations of the
Treadway Commission (COSO). Management’s assessment included an evaluation of
the design of our internal control over financial reporting and testing of the
operational effectiveness of those controls.
Based on this assessment, management has concluded that as of June 30, 2009,
our internal control over financial reporting was ineffective to provide
reasonable assurance regarding the reliability of financial
reporting and the preparation of financial statements for external purposes in
accordance with U.S. generally accepted accounting principles. We
noted that we failed to disclose the impact on earnings per common share of the
beneficial conversion feature associated with the issuance of our convertible
preferred shares, which are effectively a preferred dividend to preferred
shareholders. We therefore conclude that our disclosure controls over financial
reporting were ineffective as of and for the three
months ended June 30, 2009. To address this weakness, we are considering
forming a disclosure committee to be included as part of our internal controls
over financial reporting.
Changes
in Internal Controls
Management has evaluated the effectiveness of the disclosure controls and
procedures as of June 30, 2008. Based on such evaluation, management has
concluded that the disclosure controls and procedures were ineffective for their
intended purpose described above. There were no changes to the internal controls
during the quarter ended June 30, 2008 that have materially affected or that are
reasonably likely to affect the internal controls.
Limitation
on the Effectiveness of Controls
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. Because of the inherent limitations in all control systems, no
evaluation of controls can provide absolute assurance that all control issues,
if any, within a company have been detected. Such limitations include the fact
that human judgment in decision-making can be faulty and that breakdowns in
internal control can occur because of human failures, such as simple errors or
mistakes or intentional circumvention of the established process.