Form 8-K - Current report

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 OR 15(d)

of The Securities Exchange Act of 1934

Date of Report (Date of earliest event reported): July 15, 2024

ENCISION, INC.

(Exact name of registrant as specified in its charter)

Colorado	001-11789	84-1162056
(State or other jurisdiction of incorporation)	(Commission File Number)	(I.R.S. Employer Identification No.)

6797 Winchester Circle, Boulder, Colorado

80301

(Address of principal executive offices)

(Zip Code)

(303) 444-2600

(Registrant’s telephone number, including area code)


(Former name or former address, if changed since last report.)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):
☐ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
☐ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
☐ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
☐ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

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

Title of each class

Trading

Symbol(s)

Name of each exchange

on which registered

Common Stock, no par value

ECIA

OTC Bulletin Board

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).

Emerging growth company ☐

If an emerging growth company, indicate by check mark if the registrant has elected not 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. ☐

Item 2.02 Results of Operations and Financial Condition.

On July 15, 2024, Encision, Inc. issued a press release announcing its fourth quarter financial results for the quarter ended March 31, 2024. The full text of the press release is furnished as Exhibit 99.1 to this Current Report on Form 8-K.

Item 9.01 Financial Statements and Exhibits.

(d) Exhibits.

Exhibit Number		Description
99.1		Press Release issued by Encision Inc. dated July 15, 2024.
104		Cover Page Interactive Data File (embedded within the Inline XBRL document).

SIGNATURES

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 hereunto duly authorized.

	ENCISION, INC.
	(Registrant)

Date: July 15, 2024
	/s/ Mala M Ray
	Mala M Ray
	Controller
	Principal Accounting Officer

Exhibit 99.1

July 15, 2024

Encision Reports Fourth Quarter Fiscal Year 2024 Results

Boulder, Colorado, July 15, 2024 -- Encision Inc. (PK:ECIA), a medical device company owning patented Active Electrode Monitoring (AEM®) Technology that prevents dangerous radiant energy burns in minimally invasive surgery, today announced financial results for its fiscal 2024 fourth quarter that ended March 31, 2024.

The Company posted quarterly net revenue of $1.53 million for a quarterly net loss of $409 thousand, or $(0.03) per diluted share. These results compare to net revenue of $1.81 million for a quarterly net loss of $93 thousand, or $(0.01) per diluted share, in the year-ago quarter. Gross margin on net revenue was 42% in the fiscal 2024 fourth quarter and 56% in the fiscal 2023 fourth quarter. Gross margin decreased in the current year’s fourth quarter compared to last year’s fourth quarter due principally to higher material costs and increased inventory reserves.

The Company posted twelve months net revenue of $6.59 million for a twelve month net loss of $692 thousand, or $(0.06) per diluted share. These results compare to twelve months net revenue of $7.35 million for a twelve months net loss of $324 thousand, or $(0.03) per diluted share. Gross margin on net revenue was 48% in the fiscal 2024 twelve months and 55% in the fiscal 2023 twelve months. Gross margin in the fiscal 2024 twelve months was lower due to higher material costs and increased inventory reserves.

“Fiscal 2024 presented significant challenges for us and for the medical device market in general,” said Gregory Trudel, President and CEO of Encision Inc. “The market has fundamentally changed because of COVID, and as a small medical device company, we constantly have to generate new ways to engage customers and to drive adoption of our technology. We have had success by offering value added programs that often convert into selling opportunities and we are targeting select customer segments to increase focus and close rates. We also are fighting the conversion of standard laparoscopic procedures to those that are using the robot for procedures. We look forward to fiscal 2025 with a strengthening sales channel, a growing sales pipeline, new collaborative relationships, and a new product introduction that will deliver AEM^™ Shield Technology to high growth surgical procedures.

Encision Inc. designs and markets a portfolio of high-performance surgical instrumentation that delivers advances in patient safety with AEM technology, surgical performance, and value to hospitals across a broad range of minimally invasive surgical procedures. Based in Boulder, Colorado, the company pioneered the development and deployment of Active Electrode Monitoring, AEM technology, to eliminate dangerous stray energy burns during minimally invasive procedures. For additional information about all our products, please visit www.encision.com.

In accordance with the safe harbor provisions of the Private Securities Litigation Reform Act of 1995, the Company notes that statements in this press release and elsewhere that look forward in time, which include everything other than historical information, involve risks and uncertainties that may cause actual results to differ materially from those indicated by the forward-looking statements. Factors that could cause the Company’s actual results to differ materially include, among others, its ability to develop new or enhanced products and have such products accepted in the market, its ability to increase net sales through the Company’s distribution channels, its ability to compete successfully against other manufacturers of surgical instruments, insufficient quantity of new account conversions, insufficient cash to fund operations, delay in developing new products and receiving FDA approval for such new products and other factors discussed in the Company’s filings with the Securities and Exchange Commission. Readers are encouraged to review the risk factors and other disclosures appearing in the Company’s Annual Report on Form 10-K for the year ended March 31, 2024 and subsequent filings with the Securities and Exchange Commission. We do not undertake any obligation to update publicly any forward-looking statements, whether as a result of the receipt of new information, future events, or otherwise.

CONTACT: Mala Ray, Encision Inc., 303-444-2600, mray@encision.com

Encision Inc.

Unaudited Condensed Statements of Operations

(in thousands, except per share information)

	Three Months Ended						Years Ended
	March 31, 2024			March 31, 2023			March 31, 2024			March 31, 2023
Product revenue	$	1,505		$	1,801		$	6,432		$	6,885
Service revenue		20			5			154			464
Total revenue		1,525			1,806			6,586			7,349

Product cost of revenue		868			786			3,371			3,314
Service cost of revenue		11			2			79			2
Total cost of revenue		879			788			3,450			3,316

Gross profit		646			1,018			3,136			4,033
Operating expenses:
Sales and marketing		400			539			1,634			2,033
General and administrative		426			384			1,521			1,487
Research and development		222			175			622			816
Total operating expenses		1,048			1,098			3,777			4,336
Operating (loss)		(402	)		(80	)		(641	)		(303	)
Interest expense and other income, net		(7	)		(13	)		(51	)		(21	)
(Loss)		(409	)		(93	)		(692	)		(324	)
Provision for income taxes		—			—			—			—
Net (loss)	$	(409	)	$	(93	)	$	(692	)	$	(324	)
Net (loss) per share—basic and diluted	$	(0.03	)	$	(0.01	)	$	(0.06	)	$	(0.03	)
Weighted average number of basic and diluted shares		11,770			11,770			11,770			11,763

Encision Inc.

Unaudited Condensed Balance Sheets

(in thousands)

	March 31, 2024			March 31, 2023
ASSETS
Cash	$	43		$	189
Accounts receivable		891			921
Inventories		1,402			1,899
Prepaid expenses and other assets		90			116
Total current assets		2,426			3,125
Equipment, net		254			303
Right of use asset		901			496
Patents, net		164			163
Other assets		66			47
Total assets	$	3,811		$	4,134
LIABILITIES AND SHAREHOLDERS’ EQUITY
Accounts payable	$	346		$	253
Secured notes		42			44
Line of credit		157			177
Accrued compensation		185			218
Other accrued liabilities		120			85
Accrued lease liability		370			354
Total current liabilities		1,220			1,131
Secured notes		67			268
Accrued lease liability		697			240
Unsecured promissory note		—			—
Total liabilities		1,984			1,639
Common stock and additional paid-in capital		24,372			24,348
Accumulated (deficit)		(22,545	)		(21,853	)
Total shareholders’ equity		1,827			2,495
Total liabilities and shareholders’ equity	$	3,811		$	4,134

Encision Inc.

Unaudited Condensed Statements of Cash Flows

(in thousands)

	Years Ended
	March 31, 2024			March 31, 2023
Operating activities:
Net (loss) income	$	(692	)	$	(324	)
Adjustments to reconcile net (loss) income to cash (used in) operating activities:
Depreciation and amortization		85			87
Share-based compensation expense		53			52
Provision for (recovery from) inventory obsolescence, net		12			15
Changes in operating assets and liabilities:
Right of use asset, net		69			(43	)
Accounts receivable		30			27
Inventories		485			(330	)
Prepaid expenses and other assets		8			(8	)
Accounts payable		93			(323	)
Accrued compensation and other accrued liabilities		2			(14	)
Net cash (used in) provided by operating activities		145			(861	)

Investing activities:
Acquisition of property and equipment		(12	)		(173	)
Patent costs		(25	)		(10	)
Net cash (used in) investing activities		(37	)		(183	)

Financing activities:
Borrowings from credit facility, net change		(21	)		240
Borrowings from (paydown of) secured notes		(203	)		23
Net proceeds (payments) from exercise of stock options		(30	)		21
Net cash provided by (used in) financing activities		(254	)		284

Net (decrease) in cash		(146	)		(761	)
Cash, beginning of period		189			950
Cash, end of period	$	43		$	189

Cover	Jul. 15, 2024
Cover [Abstract]
Document Type	8-K
Amendment Flag	false
Document Period End Date	Jul. 15, 2024
Entity File Number	001-11789
Entity Registrant Name	ENCISION, INC.
Entity Central Index Key	0000930775
Entity Tax Identification Number	84-1162056
Entity Incorporation, State or Country Code	CO
Entity Address, Address Line One	6797 Winchester Circle
Entity Address, City or Town	Boulder
Entity Address, State or Province	CO
Entity Address, Postal Zip Code	80301
City Area Code	303
Local Phone Number	444-2600
Written Communications	false
Soliciting Material	false
Pre-commencement Tender Offer	false
Pre-commencement Issuer Tender Offer	false
Title of 12(b) Security	Common Stock, no par value
Trading Symbol	ECIA
Entity Emerging Growth Company	false