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): August 3, 2023

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 August 3, 2023, Encision, Inc. issued a press release announcing its first quarter financial results for the quarter ended June 30, 2023. 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 August 3, 2023.
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: August 3, 2023
	/s/ Mala M Ray
	Mala M Ray
	Controller
	Principal Accounting Officer

Exhibit 99.1

August 3, 2023

Encision Reports First Quarter Fiscal Year 2024 Results

Boulder, Colorado, August 3, 2023 -- 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 first quarter that ended June 30, 2023.

The Company posted quarterly product net revenue of $1.61 million and service net revenue of $40 thousand, or total net revenue of $1.65 million for a quarterly net loss of $140 thousand, or $(0.01) per diluted share. These results compare to product net revenue of $1.70 million and service net revenue of $458 thousand, or total net revenue of $2.15 million for a quarterly net income of $265 thousand, or $0.02 per diluted share, in the year-ago quarter. Gross margin on product net revenue was 52% in the fiscal 2024 first quarter and 49% in the fiscal 2023 first quarter. Gross margin increased in the current year’s first quarter compared to last year’s first quarter due principally to higher operating efficiencies and increased selling prices.

“The fiscal 2024 first quarter presented significant challenges for Encision and for the medical device market in general,” said Gregory Trudel, President and CEO of Encision Inc. “The demand for surgical procedures was diminished during the pandemic period and its rebound has been a slow process. The market has seen a number of positive indicators for an increase in demand and Encision continues to drive toward them. The service revenue that we were able to drive in the previous year was very helpful and we are working to recreate that revenue stream with new partners and opportunities to collaborate on our foundational technologies.”

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, 2023 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
	June 30, 2023			June 30, 2022
Product revenue	$	1,613		$	1,696
Service revenue		40			458
Total revenue		1,653			2,154
					—
Product cost of revenue		770			870
Service cost of revenue		20
Total cost of revenue		790			870

Gross profit		863			1,284
Operating expenses:
Sales and marketing		433			503
General and administrative		389			344
Research and development		169			170
Total operating expenses		991			1,017
Operating (loss) income		(128	)		267
Interest expense, extinguishment of debt income and other income, net		(12	)		(2	)
(Loss) income before provision for income taxes		(140	)		265
Provision for income taxes		—			—
Net (loss) income	$	(140	)	$	265
Net (loss) income per share—basic and diluted	$	(0.01	)	$	0.02
Weighted average number of basic shares		11,770			11,720
Weighted average number of diluted shares		11,770			12,021

Encision Inc.

Unaudited Condensed Balance Sheets

(in thousands)

	June 30, 2023			March 31, 2023
ASSETS
Cash	$	131		$	189
Accounts receivable, net		912			921
Inventories, net		1,867			1,899
Prepaid expenses		86			116
Total current assets		2,996			3,125
Equipment, net		287			303
Right of use asset		421			496
Patents, net		157			163
Other assets		54			47
Total assets	$	3,915		$	4,134
LIABILITIES AND SHAREHOLDERS’ EQUITY
Accounts payable	$	277		$	253
Secured notes		45			44
Line of credit		179			177
Accrued compensation		219			218
Other accrued liabilities		66			85
Accrued lease liability		332			354
Total current liabilities		1,118			1,131
Secured notes		256			268
Accrued lease liability		174			240
Total liabilities		1,548			1,639
Common stock and additional paid-in capital		24,361			24,348
Accumulated (deficit)		(21,994	)		(21,853	)
Total shareholders’ equity		2,367			2,495
Total liabilities and shareholders’ equity	$	3,915		$	4,134

Encision Inc.

Unaudited Condensed Statements of Cash Flows

(in thousands)

	Three Months Ended
	June 30, 2023			June 30, 2022
Operating activities:
Net (loss) income	$	(140	)	$	265
Adjustments to reconcile net (loss) income to cash (used in) operating activities:
Depreciation and amortization		22			20
Share-based compensation expense		13			12
Provision for (recovery from) inventory obsolescence, net		9			(1	)
Changes in operating assets and liabilities:
Right of use asset, net		(12	)		(8	)
Accounts receivable		8			27
Inventories		23			(214	)
Prepaid expenses and other assets		24			11
Accounts payable		24			(188	)
Accrued compensation and other accrued liabilities		(17	)		20
Net cash (used in) provided by operating activities		(46	)		(56	)

Investing activities:
Acquisition of property and equipment		—			(58	)
Patent costs		(1	)		(5	)
Net cash (used in) investing activities		(1	)		(63	)

Financing activities:
(Paydown of) secured notes		(11	)		(3	)
Net cash provided by (used in) financing activities		(11	)		(3	)

Net (decrease) in cash		(58	)	$	(122	)
Cash, beginning of period		189		$	950
Cash, end of period	$	131		$	828

Cover	Aug. 03, 2023
Cover [Abstract]
Document Type	8-K
Amendment Flag	false
Document Period End Date	Aug. 03, 2023
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