Enzolytics Inc (ENZC)

[foxi]

It is curious, an audit perpetually delayed with no reason given...

...Paired with someone(s) unloading tons of shares during that whole time.

It could be speculated that the selling parties are being forced to drag out the selling to avoid selling too fast and cratering the price, and that the corresponding new and unexplained delays in the audit schedule confirm suspicions of such a conspiracy.

While I personally don't think that's what's happening, it's hard to rule that possibility out.




Now, I've generally thought of the audit being delayed due to share ownership disputes in the ongoing lawsuits. How can they finish the audit without knowing who owns which shares?

https://imkingofprussia.com/cases-im-following/

Peter Mergenthaler vs. Enzolytics, Inc. - Still ongoing, no recent updates.

Enzolytics, Inc. vs. Kona/Cimarron - Still ongoing, expecting Kona/Cimarron to file a new document by Today (March 1).

Enzolytics, Inc. vs. Dimitar Savov - Still ongoing, no recent updates.



Afaik audits in the OTC must adhere to GAAP standards.

By GAAP standards, a company must set up a "reserve" for possible losses due to a pending lawsuit, if a loss in the case is probable, the financial loss will have a material effect on the company and the company can estimate the amount of the financial loss. The amount of the reserve is not fixed, but the company must make a reasonable estimate and by SEC rules provide an explanation of the reason if it is unable to do so. (source)

Unpacking that paragraph, ENZC would need a risk assessment for each lawsuit and an estimate of the type and amount of financial loss for each, in the event they lose one. Sounds like a mountain of paperwork, and if the lawsuits themselves are still unfolding, perhaps not enough variables are known yet to estimate risk & value & set any reserve amount.

Another question is, does ENZC have enough assets to cover a reserve amount? The dispute with Savov for example involves 71,900,000 shares, not including damages he might claim if he somehow won that lawsuit. From my POV, Savov looks very unlikely to win that lawsuit -- but Savov also hasn't communicated through proper legal channels yet, so we don't actually know his legal arguments (or if he even has any). Is ENZC in a position to demonstrate that there's low/zero risk of losing that lawsuit, in a way that would adhere to GAAP standards? How could they possibly do that without even hearing the defendant's argument?

If instead they need to set a cash reserve, the value of 71,900,000 shares at current prices (.09) is $6,471,000, which exceeds the $1,583,154 of "total current assets" on ENZC's latest unaudited filing.

So, if they couldn't yet finish the audit according to GAAP standards, wouldn't that perpetually hold up the audit?

Audit and uplisting "remains our #1 priority". Brought in new accounting firm, and they "fulfilled all the requirements".

"We will be submitting an audit and hope to be uplisted very soon. And, when I say very soon, it could be a matter of days to weeks."

(source)

Btw uplisting usually took about 4 weeks following application submission for OTCQB, pre-covid. Not sure if ENZC would need to submit another quarterly or annual report first as well. Hiring a new audit firm doesn't necessarily imply progress, only that the contract with the first firm expired or the first firm was unacceptable for some reason. The infamous "days to weeks" timeline we were given actually also included uplisting. (!)